UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended March 31, 2012
		For the quarterly period ended June 30 2012
		Or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission file number 0-17541

PRESSTEK, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or other Jurisdiction of
Incorporation or Organization)

02-0415170
(I.R.S. Employer Identification No.)

10 Glenville Street

Greenwich, Connecticut
(Address of Principal Executive Offices)

06831
(Zip Code)

(203) 769-8056

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check One):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

(do not check if a smaller reporting company)

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

Yes o No þ

As of ~~May~~August 143, 2012, there were 37,~~395~~425,228 shares of the Registrant’s Common Stock, $0.01 par value, outstanding.

- 1 -

PRESSTEK, INC.

INDEX

		PAGE
PART I	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (Unaudited)	3
	Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011 (Unaudited)	3
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2012 and April 2, 2011 (Unaudited)	4
	Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and July 2, 2011 (Unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and April 2, 2011 (Unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and July 2, 2011 (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1912
Item 4.	Controls and Procedures	3218
PART II	OTHER INFORMATION
Item 1A.	Risk Factors	3320
Item 6.	Exhibits	3421
Signatures		3522

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. See “Information Regarding Forward-Looking Statements” under Part 1 – Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Quarterly Report on Form 10-Q.

DI is a registered trademark of Presstek, Inc.

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
PRESSTEK, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
	March 31,			December 31,
	2012			2011
ASSETS
Current assets
Cash and cash equivalents	$	2,512		$	2,539
Cash - restricted		528			512
Accounts receivable, net		14,738			15,904
Inventories		22,828			25,038
Other current assets		1,614			1,345
Total current assets		42,220			45,338
Property, plant and equipment, net		17,977			18,543
Intangible assets, net		4,740			5,001
Other noncurrent assets		870			931
Total assets	$	65,807		$	69,813
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Line of credit	$	11,283		$	13,757
Accounts payable		7,753			6,864
Accrued expenses		4,679			5,472
Deferred revenue		3,507			4,473
Total current liabilities		27,222			30,566
Other long-term liabilities		12			31
Total liabilities		27,234			30,597
Stockholders' equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued		-			-
Common stock, $0.01 par value, 75,000,000 shares authorized, 37,395,228 and
37,395,228 shares issued and outstanding at March 31, 2012 and
December 31, 2011, respectively		374			374
Additional paid-in capital		125,237			124,992
Accumulated other comprehensive loss		(3,048	)		(3,384	)
Accumulated deficit		(83,990	)		(82,766	)
Total stockholders' equity		38,573			39,216
Total liabilities and stockholders' equity	$	65,807		$	69,813
The accompanying notes are an integral part of these consolidated financial statements.

- 2 -


PRESSTEK, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
					June 30,	December 31,
					2012	2011

ASSETS
	Current assets
		Cash and cash equivalents			$ 2,901	$ 2,539
		Cash - restricted			516	512
		Accounts receivable, net			14,987	15,904
		Inventories			21,178	25,038
		Other current assets			1,580	1,345
				Total current assets	41,162	45,338

	Property, plant and equipment, net				17,363	18,543
	Intangible assets, net				4,496	5,001
	Other noncurrent assets				769	931

				Total assets	$ 63,790	$ 69,813

LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities
		Line of credit			$ 10,813	$ 13,757
		Accounts payable			7,260	6,864
		Accrued expenses			4,210	5,472
		Deferred revenue			3,752	4,473
				Total current liabilities	26,035	30,566

	Other long-term liabilities				-	31

				Total liabilities	26,035	30,597

	Stockholders' equity
		Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued			-	-
		Common stock, $0.01 par value, 75,000,000 shares authorized, 37,395,228
			outstanding at June 30, 2012 and December 31, 2011, respectively		374	374
		Additional paid-in capital			125,400	124,992
		Accumulated other comprehensive loss			(3,275)	(3,384)
		Accumulated deficit			(84,744)	(82,766)
				Total stockholders' equity	37,755	39,216

				Total liabilities and stockholders' equity	$ 63,790	$ 69,813

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

- 3 -

PRESSTEK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(LOSS)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share data)
(in thousands, except per share data)
(Unaudited)
		March 31,			April 2,
				Three months ended				Six months ended
		2012			2011
				June 30,	July 2,			June 30,	July 2,
Revenue
				2012	2011			2012	2011
Equipment		$	3,500		$	5,118
Revenue
Consumables			17,564			20,734
	Equipment			$ 6,386	$ 6,230			$ 9,886	$ 11,348
Service and parts			5,962			6,028
	Consumables			17,557	19,252			35,120	39,986
Total revenue			27,026			31,880
	Service and parts			5,718	5,913			11,681	11,941
Cost of revenue
		Total revenue		29,661	31,395			56,687	63,275
Equipment			4,213			5,564
Cost of revenue
Consumables			10,954			11,229
	Equipment			6,081	6,269			10,294	11,833
Service and parts			4,560			5,142
	Consumables			10,678	10,386			21,632	21,615
Total cost of revenue			19,727			21,935
	Service and parts			4,380	4,783			8,940	9,925
Gross profit			7,299			9,945
		Total cost of revenue		21,139	21,438			40,866	43,373
Operating expenses
Gross profit				8,522	9,957			15,821	19,902
Research and development			974			1,075
Operating expenses
Sales, marketing and customer support			3,943			5,264
	Research and development			770	1,110			1,744	2,185
General and administrative			2,827			4,317
	Sales, marketing and customer support			4,343	5,609			8,285	10,873
Amortization of intangible assets			246			201
	General and administrative			3,380	4,135			6,207	8,452
Restructuring and other charges			-			315
	Amortization of intangible assets			289	210			535	411
Total operating expenses			7,990			11,172
	Restructuring and other charges			-	48			-	363
Operating loss			(691	)		(1,227	)
		Total operating expenses		8,782	11,112			16,771	22,284
Interest and other income (expense), net			(496	)		(315	)
Operating loss				(260)	(1,155)			(950)	(2,382)
Loss before income taxes			(1,187	)		(1,542	)
Interest and other income (expense), net				(487)	(360)			(984)	(675)
Provision (benefit) for income taxes			37			(2	)
Loss before income taxes				(747)	(1,515)			(1,934)	(3,057)
Net loss		$	(1,224	)	$	(1,540	)
Provision (benefit) for income taxes				8	183			45	181
Unrealized foreign currency translation adjustments			336			527
Net loss				(755)	(1,698)			(1,979)	(3,238)
Comprehensive loss		$	(888	)	$	(1,013	)
Unrealized foreign currency translation adjustment				(227)	26			109	553
Net loss per share - basic and diluted		$	(0.03	)	$	(0.04	)
Comprehensive loss				$ (982)	$ (1,672)			$ (1,870)	$ (2,685)
Weighed average shares outstanding - basic and diluted			37,395			37,246
Loss per share (basic and diluted)				$ (0.02)	$ (0.05)			$ (0.05)	$ (0.09)
The accompanying notes are an integral part of these consolidated financial statements.
Weighted average shares outstanding - basic and diluted				37,395	37,213			37,395	37,259

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

- 4 -

PRESSTEK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
		Three months ended
							Six months ended
		March 31,			April 2,
							June 30,	July 2,
		~~2012~~			~~2011~~		2012	2011
Operating activities
~~Net loss~~	Net loss	$	~~(1,224~~	)	$	~~(1,540~~	$ (1,979)	$ (3,238)
Adjustments to reconcile net loss to net cash used in operating activities:
	Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
~~Depreciation~~		Depreciation	~~855~~			~~959~~	1,680	1,715
~~Amortization of intangible assets~~		Amortization of intangible assets	~~246~~			~~201~~	535	411
~~Provision for warranty costs~~		Provision for warranty costs	-			~~121~~	60	16
~~Provision for accounts receivable allowances~~		Provision for accounts receivable allowances	-			20	-	143
Stock compensation expense			245			448
		Amortization of loan origination fees					180	180
Accrual for non-cash bonus plan			-			178
		Stock compensation expense					409	920
Restructuring and other charges			-			315
		Accrual for non-cash bonus plan					-	80
~~Loss on disposal of long-lived assets~~		Loss on disposal of long-lived assets	50			42	-	42
~~Changes in operating assets and liabilities:~~		Changes in operating assets and liabilities:
Restricted cash			(16	)		(18	)
			Accounts receivable				917	(340)
Accounts receivable			905			(2,087	)
			Inventories				3,472	42
Inventories			1,977			322
			Other current assets				(235)	(1,551)
Other current assets			(264	)		(1,544	)
			Other noncurrent assets				(10)	11
Other noncurrent assets			312			(172	)
			Accounts payable				396	330
Accounts payable			787			529
			Accrued expenses				(1,376)	(1,636)
Accrued expenses			(706	)		(1,259	)
			Restructuring and other charges				-	363
~~Deferred revenue~~			~~(965~~Deferred revenue	)		~~333~~	(721)	111
Net cash (used in) provided by operating activities			2,202			(3,152	)
				Net cash provided by (used in) operating activities			3,328	(2,401)
Investing activities
~~Purchase of property, plant and equipment~~	Purchase of property, plant and equipment		~~(50~~	)		~~(81~~	(101)	(176)
~~Investment in patents and other intangible assets~~	Investment in patents and other intangible assets		~~(35~~	)		~~(716~~	(30)	(1,116)
~~Net cash used in investing activities~~			~~(85~~	)Net cash used in investing activities		~~(797~~	(131)	(1,292)
Financing activities
~~Net proceeds from issuance of common stock~~	Net proceeds from issuance of common stock		-			~~754~~	-	64
~~Net borrowings (repayments) under line of credit agreement~~	Net borrowings (repayments) under line of credit agreement		~~(2,474~~	)		~~1,698~~	(2,944)	2,645
~~Net cash provided by (used in) financing activities~~			~~(2,474~~	Net cash provided by (used in) financing activities		~~2,452~~	(2,944)	2,709
Effect of exchange rate changes on cash and cash equivalents			~~330~~			~~501~~	109	539
Net decrease in cash and cash equivalents			(27	)		(996	)
Net increase (decrease) in cash and cash equivalents							362	(445)
Cash and cash equivalents, beginning of period			~~2,539~~			~~4,165~~	2,539	4,165
Cash and cash equivalents, end of period		$	~~2,512~~		$	~~3,169~~	$ 2,901	$ 3,720
Supplemental disclosure of cash flow information
~~Cash paid for interest~~	Cash paid for interest	$	~~280~~		$	~~174~~	$ 590	$ 356
Cash (refunded) paid for income taxes		$	(4	)	$	9
	Cash paid for income taxes						$ 29	$ 22
The accompanying notes are an integral part of these consolidated financial statements.

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

- 5 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~March~~June 3130, 2012

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In the opinion of management, the accompanying consolidated financial statements of Presstek, Inc. and its subsidiaries (“Presstek,” the “Company,” “we” or “us”) contain all adjustments, including normal recurring adjustments, necessary to present fairly Presstek’s financial position as of ~~March~~June 3130, 2012 and December 31, 2011, its results of operations for the three and six months ended ~~March~~June 3130, 2012 and ~~April~~July 2, 2011 and its cash flows for the ~~three~~six months ended ~~March~~June 3130, 2012 and ~~April~~July 2, 2011, in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the interim reporting requirements of Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Certain reclassifications were made to prior years' amounts to conform to the 2012 presentation.

The results of the three and six months ended ~~March~~June 3130, 2012 are not necessarily indicative of the results to be expected for the fiscal year ending December 29, 2012. The information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 27, 2012.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated.

The Company operates and reports on a 52- or 53-week, fiscal year ending on the Saturday closest to December 31. Accordingly, the accompanying consolidated financial statements include the ~~thirteen~~26 week periods ended ~~March~~June 3130, 2012 (the “~~first~~second quarter and first ~~three~~six months of fiscal 2012” or “the ~~three~~six months ended ~~March~~June 3130 , 2012”) and ~~April~~July 2, 2011 (the “~~first~~second quarter and first ~~three~~six months of fiscal 2011” or “the ~~three~~six months ended ~~April 2~~July, 2011”).

Use of Estimates

The Company prepares its financial statements in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect reported amounts and related disclosures. Management believes the most judgmental estimates include those related to product returns; allowance for doubtful accounts; slow-moving and obsolete inventories; income taxes; the valuation of intangible assets, long-lived assets and deferred tax assets and stock-based compensation. The Company bases its estimates and judgments on historical experience and various other appropriate factors, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.

-For 6a complete discussion of our critical accounting policies and estimates, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the SEC on March 27, 2012. There were no significant changes to the Company’s critical accounting policies during the six months ended June 30, 2012.

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2012

(Unaudited)

For a complete discussion of our critical accounting policies and estimates, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the SEC on March 27, 2012. There were no significant changes to the Company’s critical accounting policies during the three months ended March 31, 2012.

Recently Issued Accounting Standards

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (Topic 220). This guidance, effective retrospectively for the interim and annual periods beginning on or after December 15, 2011, requires presentation of total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The adoption of this guidance did not have a material impact upon our financial position and results of operations.

- 7 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

March 31, 2012

(Unaudited)

2. ACCOUNTS RECEIVABLE, NET

The components of accounts receivable, net of allowances, are as follows (in thousands):

		March 31, 2012			December 31, 2011
	June 30, 2012		December 31, 2011
Accounts receivable	$ 21,835	$	21$ 23,~~721~~119		$	~~23,119~~
Less allowances	(6,849)		(67,~~983~~215)	)		~~(7,215~~	)
		$	14,738		$	15,904
	$ 14,987		$ 15,904

3. INVENTORIES

The components of inventories are as follows (in thousands):

		March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Raw materials	$ 4,343	$	$ 4,~~208~~251	$	~~4,251~~
Work in process	1,236		~~961~~1,056		~~1,056~~
Finished goods	15,599		1719,~~659~~731		~~19,731~~
		$	22,828	$	25,038
	$ 21,178		$ 25,038

- 86 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~March~~June 3130, 2012

(Unaudited)

4. PROPERTY, PLANT AND EQUIPMENT, NET

The components of property, plant and equipment, net, are as follows (in thousands):

		March 31, 2012			December 31, 2011
	June 30, 2012		December 31, 2011
Land and improvements	$ 1,302	$	$ 1,301		$	~~1,301~~
Buildings and leasehold improvements	22,640		22~~.637~~,619			~~22,619~~
Production and other equipment	44,070		44,~~095~~070			~~44,070~~
Office furniture and equipment	11,090		11,~~071~~025			~~11,025~~
Construction in process	346		~~378~~353			~~353~~
Total property, plant and equipment, at cost	79,448		79,~~482~~368			~~79,368~~
Accumulated depreciation and amortization	(62,085)		(6160,~~505~~825)	)		~~(60,825~~	)
Net property, plant and equipment	$ 17,363	$	17$ 18,~~977~~543		$	~~18,543~~

Construction in process is generally related to production equipment not yet placed into service.

The Company recorded depreciation expense of $0.98 million inand ~~the~~$1.7 ~~first~~million ~~quarter~~for ofthree ~~fiscal~~and six months ended June 30, 2012, respectively, and $0.9 million and $1.07 million infor the ~~first~~three ~~quarter~~and ofsix ~~fiscal~~months ended July 2, 2011, respectively. Under the Company’s financing arrangements (see Note 5), all property, plant and equipment is pledged as security.

- 9 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

March 31, 2012

(Unaudited)

5. FINANCING ARRANGEMENTS

The components of the Company’s outstanding borrowings are as follows (in thousands):

		March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Line of credit	$ 10,813	$	11$ 13,~~283~~757	$	~~13,757~~

On March 5, 2010, the Company entered into a Revolving Credit and Security Agreement (“Credit Agreement”) among the Company and PNC Bank, National Association (“PNC”), as Lender and as administrative agent for Lenders (PNC, in such agency capacity, the “Agent”).

The Credit Agreement, which has a term expiring on March 5, 2013, provides for funding of up to $25.0 million through a revolving credit facility (the “Revolver”). Borrowing availability under the Revolver is determined based on a percentage of eligible accounts receivable and inventory of the Company and certain of its subsidiaries. The Company may terminate the Credit Agreement at any time prior to the maturity date upon thirty (30) days’ prior written notice and upon payment in full of all outstanding obligations under the Credit Agreement. If the Company terminates the Credit Agreement within the first 35 months the Company must pay an early termination fee as specified in the Credit Agreement. The Credit Agreement requires the Company to prepay a portion of borrowings under the Credit Agreement out of the proceeds of certain dispositions of property.

Borrowings under the Credit Agreement bear interest at the Revolving Interest Rate. The Revolving Interest Rate is calculated differently for domestic rate loans and for Eurodollar rate loans. For domestic rate loans the interest rate per annum is equal to the sum of the Alternate Base Rate plus two and one half percent (2.50%). The Alternate Base Rate is defined as a rate per annum, for any day, equal to the higher of (i) PNC’s published reference rate, (ii) the Federal Funds Open rate in effect on such day plus one half of one percent (0.50%) or (iii) the Daily LIBOR Rate in effect on such day plus one percent (1.0%). For Eurodollar rate loans the interest rate per annum is equal to the sum of three and one-half percent (3.50%) plus the greater of (a) the Eurodollar rate, or (b) one percent (1.0%). The Credit Agreement requires monthly interest payments with respect to domestic rate loans and a payment at the end of each interest period with respect to Eurodollar rate loans.

Borrowings under the Credit Agreement are secured by all of the assets of Presstek, Inc. and certain of its domestic and foreign subsidiaries that guaranty the obligations of Presstek, Inc., including all receivables, equipment, general intangibles, inventory, investment property, subsidiary stock, owned real property and leasehold interests of the Company.

Under the Credit Agreement the Company is required to provide monthly Borrowing Base Certificates to the Agent that become the basis for calculating the Credit Agreement’s Formula Amount. The Formula Amount, capped at $25 million, represents the maximum amount of advances available to the Company at a given point in time. The Formula Amount is normally calculated 20 days subsequent to the close of each fiscal month. Because of the timing delay, the Agent utilizes a process that estimates the maximum amount available daily during each fiscal period. As of ~~March~~June 3130, 2012 the Formula Amount (net of the availability block of $1.25 million) was $1215.41 million and the Company had outstanding balances on its line of credit of $1110.38 million. The amount available under the credit line, based on the Formula Amount, was $14.13 million as of ~~March~~June 3130, 2012.

Under the terms of the Credit Agreement, the Company is required to comply with certain financial and non-financial covenants. Among other restrictions, the Company is restricted in its ability to pay dividends, incur additional debt and make acquisitions and divestitures, with certain exceptions. The key financial covenants include a requirement for the Company to maintain a certain fixed charge coverage ratio and a limit on capital expenditures for the Company’s first, second, third and fourth fiscal quarters in 2010 of $385,000, $1,238,000, $1,139,000 and $614,000, respectively, and $4,000,000 in each fiscal year thereafter. As of December 31, 2011, the Credit Agreement required the Company to maintain a rolling four quarter cumulative fixed charge coverage ratio of 1.0 to 1.0. Pursuant to an amendment to the Credit Agreement dated February 7, 2012, the fixed charge coverage ratio has been changed. The Company is required to maintain a fixed charge coverage ratio of 1.25 to 1.0 for the following periods: with respect to the fiscal quarter ending on or about March 31, 2012, for the fiscal quarter then ending; with respect to the fiscal quarter ending on or about June 30, 2012, for the two fiscal quarters then ending; with respect to the fiscal quarter ending on or about September 30, 2012, for the three fiscal quarters then ending; with respect to the fiscal quarter ending on or about December 31, 2012 and for each fiscal quarter ending thereafter, in each case for the four fiscal quarters then ending. In addition, pursuant to the amendment dated February 7, 2012, the Availability Block (as defined in the Loan Agreement) of $2 million, which was to be re-established on January 31, 2012, will be re-established on the following schedule: (i) for the period commencing on January 31, 2012 and ending on the last day of the fiscal quarter ending on or about March 31, 2012, $1.0 million, (ii) for the period commencing on the first day of the fiscal quarter commencing on or about April 1, 2012 and ending on the last day of such fiscal quarter, $1.25 million, (iii) for the period commencing on the first day of the fiscal quarter commencing on or about July 1, 2012 and ending on the last day of such fiscal quarter, $1.5 million, (iv) for the period commencing on the first day of the fiscal quarter commencing on or about October 1, 2012 and ending on the last day of such fiscal quarter, $1.75 million and (v) for the period commencing on the first day of the fiscal year commencing on or about January 1, 2013 and through the expiration of the Loan Agreement, $2.0 million.

-As 10of -June 30, 2012, the Company was fully in compliance with all financial covenants. The fixed charge ratio for the quarter ended June 30, 2012 was 6.72 to 1.0, in excess of the 1.25 to 1.0 minimum required ratio. Additionally, since the inception of the Credit Agreement, the Company’s quarterly capital expenditures have been well below the maximum levels allowed. The Company’s current credit agreement expires in March 2013. The Company intends to seek an extension of the current credit agreement or a replacement of the current financing arrangement with another lender. However, there can be no assurance that the Company will be able to obtain an extension of the current credit agreement or obtain adequate financing from another source.

The weighted average interest rate on the Company’s short-term borrowings was 4.71% at June 30, 2012.

- 7 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~March~~June 3130, 2012

(Unaudited)

additional debt and make acquisitions and divestitures, with certain exceptions. The key financial covenants include a requirement for the Company to maintain a certain fixed charge coverage ratio and a limit on capital expenditures for the Company’s first, second, third and fourth fiscal quarters in 2010 of $385,000, $1,238,000, $1,139,000 and $614,000, respectively, and $4,000,000 in each fiscal year thereafter. As of December 31, 2011, the Credit Agreement required the Company to maintain a rolling four quarter cumulative fixed charge coverage ratio of 1.0 to 1.0. Pursuant to an amendment to the Credit Agreement dated February 7, 2012, the fixed charge coverage ratio has been changed. The Company is required to maintain a fixed charge coverage ratio of 1.25 to 1.0 for the following periods: with respect to the fiscal quarter ending on or about March 31, 2012, for the fiscal quarter then ending; with respect to the fiscal quarter ending on or about June 30, 2012, for the two fiscal quarters then ending; with respect to the fiscal quarter ending on or about September 30, 2012, for the three fiscal quarters then ending; with respect to the fiscal quarter ending on or about December 31, 2012 and for each fiscal quarter ending thereafter, in each case for the four fiscal quarters then ending. In addition, pursuant to the amendment dated February 7, 2012, the Availability Block (as defined in the Loan Agreement) of $2 million, which was to be re-established on January 31, 2012, will be re-established on the following schedule: (i) for the period commencing on January 31, 2012 and ending on the last day of the fiscal quarter ending on or about March 31, 2012, $1.0 million, (ii) for the period commencing on the first day of the fiscal quarter commencing on or about April 1, 2012 and ending on the last day of such fiscal quarter, $1.25 million, (iii) for the period commencing on the first day of the fiscal quarter commencing on or about July 1, 2012 and ending on the last day of such fiscal quarter, $1.5 million, (iv) for the period commencing on the first day of the fiscal quarter commencing on or about October 1, 2012 and ending on the last day of such fiscal quarter, $1.75 million and (v) for the period commencing on the first day of the fiscal year commencing on or about January 1, 2013 and through the expiration of the Loan Agreement, $2.0 million.

As of March 31, 2012, the Company was fully in compliance with all financial covenants. The fixed charge ratio for the quarter ended March 31, 2012 was 3.03 to 1.0, in excess of the 1.25 to 1.0 minimum required ratio. Additionally, since the inception of the Credit Agreement, the Company’s quarterly capital expenditures have been well below the maximum levels allowed. The Company’s current credit agreement expires in March 2013. The Company intends to seek an extension of the current credit agreement of a replacement of the current financing arrangement with another lender. However, there can be no assurance that the Company will be able to obtain an extension of the current credit agreement or obtain adequate financing from another source.

The weighted average interest rate on the Company’s short-term borrowings was 4.99% at March 31, 2012.

6. ACCRUED EXPENSES

The components of accrued expenses are as follows (in thousands):

		March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Accrued payroll and employee benefits	$ 1,107	$	$ 1,~~376~~286	$	~~1,286~~
Accrued warranty	724		~~738~~911		~~911~~
Accrued restructuring and other charges	180		~~264~~809		~~809~~
Accrued professional fees	564		~~705~~689		~~689~~
Other	1,635		1,~~596~~777		~~1,777~~
		$	4,679	$	5,472
	$ 4,210		$ 5,472

- 11 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

March 31, 2012

(Unaudited)

7. ACCRUED WARRANTY

Product warranty activity in the first ~~three~~six months of fiscal 2012 is as follows (in thousands):

Balance at December 31, 2011	$ 911	$	~~911~~
Utilization of accrual for warranty costs			(173	)
Additions to warranty reserve	190
Balance at March 31, 2012		$	738
Utilization of accrual for warranty costs	(377)
Balance at June 30, 2012	$ 724

8. DEFERRED REVENUE

The components of deferred revenue are as follows (in thousands):

		March 31, 2012		December 31, 2011
	June 30, 2012		December 31, 2011
Deferred service revenue	$ 3,595	$	$ 3,~~324~~651	$	~~3,651~~
Deferred equipment revenue	157		~~183~~822		~~822~~
		$	3,507	$	4,473
	$ 3,752		$ 4,473

9. RESTRUCTURING AND OTHER CHARGES

The activity for the first ~~three~~six months of fiscal 2012 related to the Company’s restructuring and other charges accruals is as follows (in thousands):

	Balance December 31, 2011	~~Balance~~Charged ~~December~~to ~~31, 2011~~expense	Utilization	Balance June 30, 2012		~~Charged to expense~~				~~Utilization~~				~~Balance March 31, 2012~~
Severance and fringe benefits	$ 809	$ -	~~809~~$ (629)	$ 180		$	-			$	~~(545~~	)		$	~~264~~

The remaining accrual of $~~264~~180,000 is expected to be fully utilized by the fourth quarter of fiscal 2012.

10. STOCK-BASED COMPENSATION

The Company has equity incentive plans that are administered by the Compensation Committee of the Board of Directors (the “Committee”). The Committee oversees and approves which employees receive grants, the number of shares or options granted and the exercise prices and other terms of the awards.

The 2003 Stock Option and Incentive Plan

The 2003 Stock Option and Incentive Plan (the “2003 Plan”) provides for the award of stock options, stock issuances and other equity interests in the Company to employees, officers, directors (including those directors who are not an employee or officer of the Company, such directors being referred to as Non-Employee Directors), consultants and advisors of the Company and its subsidiaries. A total of 2,000,000 shares of common stock, subject to anti-dilution adjustments, have been reserved under this plan. Any future options granted under the 2003 Plan will become exercisable at such times and subject to such terms and conditions as the Board of Directors or Committee may specify at the time of each grant. At June 30, 2012, there were 1,410,567 options outstanding under the 2003 Plan, and 504,033 shares available for future grants under this plan. The options will expire at various dates prescribed by the individual option grants.

- 12 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

March 31, 2012

(Unaudited)

to anti-dilution adjustments, have been reserved under this plan. Any future options granted under the 2003 Plan will become exercisable at such times and subject to such terms and conditions as the Board of Directors or Committee may specify at the time of each grant. At March 31, 2012, there were 1,435,567 options outstanding under the 2003 Plan, and 479,033 shares available for future grants under this plan. The options will expire at various dates prescribed by the individual option grants.

With respect to all stock options previously granted to the Company’s current executive officers and other current employees and Non-Employee Directors under the 2003 Stock Plan, the Compensation Committee approved on September 30, 2010 an amendment to the exercise prices of such options so that each such option outstanding shall have an exercise price equal to the per share closing price of the Company’s common stock on that date of $2.19 per share. The amendment did not change the vesting schedules or any of the other terms of the respective stock options. This modification affected 331 employees who held 724,300 stock options on September 30, 2010. For purposes of stock activity disclosure the amended options are treated as option cancellations and new option grants with the only change from the original grant being the revised option price.

2008 Omnibus Incentive Plan

On June 2, 2011 the Company’s stockholders approved the 2008 Omnibus Incentive Plan (As Amended and Restated) (the “2008 Plan”). The 2008 Plan provides for the award of stock options, stock issuances and other equity interests in the Company to employees, officers, directors (including Non-Employee Directors), consultants and advisors of the Company and its subsidiaries.

A total of 5,500,000 shares of common stock, subject to anti-dilution adjustments, have been reserved under this plan. Awards granted under this plan may have varying vesting and termination provisions and can have no longer than a ten-year contractual life. There were a total of 75,000 and 1,~~313~~388,885 options granted under this plan ~~for~~during the three and six months ended ~~March~~June 3130, 2012, and 147,306 and 734,501 during the three and six months ended July 2, 2011, respectively. AtAs ~~March~~of June 3130, 2012, there were 2,~~522~~387,~~070~~171 options outstanding ~~and~~ 2,~~542~~677,~~260~~159 shares available for future grants under this plan.

Employee Stock Purchase Plan

The Company’s 2002 Employee Stock Purchase Plan (“ESPP”) was designed to provide eligible employees of the Company and its participating U.S. subsidiaries an opportunity to purchase common stock of the Company through accumulated payroll deductions. The plan expired by its terms on December 31, 2011. The Company issued 19,577 shares of common stock under the ESPP for the three months ended April 2, 2011. The purchase price of the stock under this plan was equal to 85% of the fair market value of a share of common stock on the first day or last day of each three-~~month~~ ~~offering~~8 period, whichever is lower. All employees of the Company or participating subsidiaries who customarily work at least 20 hours per week and do not own five percent or more of the Company’s common stock were eligible to participate in the ESPP.-

- 13 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~March~~June 3130, 2012

(Unaudited)

The Company’s 2002 Employee Stock Purchase Plan (“ESPP”) was designed to provide eligible employees of the Company and its participating U.S. subsidiaries an opportunity to purchase common stock of the Company through accumulated payroll deductions. The plan expired by its terms on December 31, 2011. The Company issued 19,577 shares of common stock under the ESPP for the three months ended April 2, 2011. The purchase price of the stock under this plan was equal to 85% of the fair market value of a share of common stock on the first day or last day of each three-month offering period, whichever is lower. All employees of the Company or participating subsidiaries who customarily work at least 20 hours per week and do not own five percent or more of the Company’s common stock were eligible to participate in the ESPP.

Stock-Based Compensation

Stock-based compensation associated with stock option grants to all officers, directors, and employees is included as a component of “General and administrative expense” in the Company’s Consolidated Statements of Operations.

Stock based compensation expense for the three and six months ended ~~March~~June 3130, 2012 and ~~April~~July 2, 2011 is as follows (in thousands):

	Three months ended	~~Three months ended~~		Six months ended
Stock option plan	June 30, 2012	~~March 31, 2012~~	July 2, 2011	June 30, 2012	~~April 2, 2011~~	July 2, 2011
2003 Plan*	$ 5	$	5$ 93	$ 10	$	~~116~~$ 209
2008 Plan	154		~~237~~368	391		~~322~~690
1998 Plan	-		-1	-		12
ESPP	-		-10	-		919
Restricted Stock	5		30	8		-0
Total	$ 164	$	~~245~~$ 472	$ 409	$	~~448~~$ 920

* includes $119,000 ~~thousand~~and $20,000 of stock compensation expense related to repriced options for the ~~first~~three ~~quarter~~and six months of fiscal 2011.

As of ~~March~~June 3130, 2012, there was $~~0.7~~679,000 ~~million~~ of unrecognized compensation expense related to stock option grants, most of which vest inover the next ~~year~~twelve months.

Valuation Assumptions

Plan Options

The fair value of the options to purchase common stock granted in the ~~first~~second quarter of fiscal 2012 and fiscal 2011 under the 2008 Plan ~~and~~was ~~were~~ estimated on the respective grant dates using the Black-Scholes valuation model with the following assumptions:

	Three months ended	~~Three months ended~~		Six months ended
		March 31, 2012				April 2, 2011
	June 30, 2012	July 2, 2011		June 30, 2012	July 2, 2011
Risk-free interest rate	0.7%	1.6%	~~0.96~~	0.9%	2%		~~2.26~~	%
Volatility	87.6%	81.1%	~~79.42~~	79.9%	79.5%		~~78.67~~	%
Expected life (in years)	5.4	5.4	~~5.42~~	5.0	5.7		~~5.83~~
Dividend yield	0	0	-	0	0		-
Estimated fair value of an option grant	$ 0.41	$ 1.08		$ 0.43	$ 1.36

-Expected 14volatilities are based on historical price ranges of Presstek’s common stock. The expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s historical exercise patterns. The risk-free rate is based on the 5 year U.S. Treasury rate which corresponds to the expected life of the options.

- 9 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~March~~June 3130, 2012

(Unaudited)

Based on the above assumptions, the weighted average fair value of each option to purchase a share of the Company’s common stock granted in the first quarter of fiscal 2012 and fiscal 2011 under the 2008 Plan was $0.43 and $1.50, respectively.

Expected volatilities are based on historical volatilities of Presstek’s common stock. The expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules, the Company’s historical exercise patterns and the ESPP purchase period. The risk-free rate is based on a U.S. Treasury securities rate for the period corresponding to the expected life of the options or ESPP purchase period.

Stock Option Activity

Stock option activity for the ~~three~~six months ended ~~March~~June 3130, 2012 is summarized as follows:

	Shares	~~Shares~~	Weighted average exercise price	Weighted average remaining contractual life	~~Weighted average exercise price~~	Aggregate intrinsic value	~~Weighted average remaining contractual life~~	~~Aggregate intrinsic value~~
Outstanding at December 31, 2011	5,492,031		~~5,492,031~~$ 4.66	5.47 years	$	~~4.66~~$ -	~~5.47 years~~	$	-
Granted	1,388,885		~~1,313,885~~0.57			~~0.57~~
Exercised	0		-			-
Canceled/expired	2,957,078		~~2,722,179~~3.92			~~4.02~~
Outstanding at March 31, 2012			4,083,737		$	3.77	6.49 years	$ 4 thousand
Outstanding at June 30, 2012	3,923,838		$ 3.76	6.6 years		$ 43,000
Exercisable at March 31, 2012			2,672,268		$	5.31	4.87 years	$	-
Exercisable at June 30, 2012	2,492,101		$ 5.45	5.0 years		$ 43,000

~~There~~As ~~were~~of noJuly ~~options~~30, ~~exercised~~2012, ~~during~~all of the ~~three~~Company’s ~~months~~option ~~ended~~grants ~~March~~were ~~31,~~“out ~~2012~~of orthe ~~April~~money”. 2At June 30, ~~2011~~2012, ~~respectively~~there were no potential shares included in our diluted EPS calculation because the effect would have been anti-dilutive.

11. INTEREST AND OTHER INCOME (EXPENSE)

The components of Interest and other income (expense), net, are as follows (in thousands):

	Three months ended	~~Three months ended~~			Six months ended
		March 31, 2012				April 2, 2011
	June 30, 2012		July 2, 2011		June 30, 2012		July 2, 2011
Interest expense, net	$ (296)	$	$ (~~363~~281)	)	$ (659)	$	$ (~~261~~542)	)
Foreign currency losses	(213)		(~~154~~151)	)	(368)		(~~131~~282)	)
Other income (expense), net	22		2172		43		77149
		$	(496	)		$	(315	)
	$ (487)		$ (360)		$ (984)		$ (675)

- 15 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

March 31, 2012

(Unaudited)

12. INCOME TAXES

The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Cumulative adjustments to the tax provision are recorded in the interim period in which a change in the estimated annual effective rate is determined. Our effective tax rate differs from the statutory rate due to valuation allowances placed on tax benefits derived from operating losses.

~~The~~At ~~Company’s~~June ~~tax~~30, ~~provision/(~~2012, our deferred tax ~~benefit)~~assets, ~~was~~net ~~$37~~of valuation allowance,~~000~~ ~~and~~were ~~($2~~zero. However,~~000)~~ ~~for~~if future events differ from expectations, changes in the ~~three~~valuation ~~months~~allowance ~~ended~~may ~~March~~be ~~31,~~required. A ~~2012~~change ~~and~~in ~~April~~the 2,valuation ~~2011,~~allowance ~~respectively,~~occurs onif ~~pre-tax~~there ~~losses~~is a change in management’s assessment of ~~$1.2~~the ~~million~~amount ~~and~~of ~~$1.5~~net ~~million~~deferred ~~for~~tax ~~the~~assets ~~respective~~that ~~periods~~is expected to be realized in the future.

At March 31, 2012, our deferred tax assets, net of valuation allowance, were zero. However, if future events differ from expectations, changes in the valuation allowance may be required. A change in the valuation allowance occurs if there is a change in management’s assessment of the amount of net deferred tax assets that is expected to be realized in the future.

13. SEGMENT AND GEOGRAPHIC INFORMATION

Presstek is a market-focused high technology company that designs, manufactures and distributes proprietary and non-proprietary solutions to the printing and communications industries, primarily serving short-run, full-color customers.

The Company’s classification of revenue by geographic area is determined by the location of the Company’s customer. The following table summarizes revenue information by geographic area (in thousands):

	Three months ended	~~Three months ended~~		Six months ended
		March 31, 2012			April 2, 2011
	June 30, 2012		July 2, 2011	June 30, 2012		July 2, 2011
United States	$ 20,897	$	18$ 20,~~308~~840	$ 39,205	$	19$ 40,~~925~~764
United Kingdom	3,293		2,~~177~~535	5,470		35,~~235~~771
All other	5,471		68,~~541~~020	12,012		816,~~720~~740
		$	27,026		$	31,880
	$ 29,661		$ 31,395	$ 56,687		$ 63,275

-The 16Company’s long-lived assets by geographic area are as follows (in thousands):


	June 30, 2012	December 31, 2012

United States	$ 22,116	$ 23,818
United Kingdom	258	351
Canada	254	306
	$ 22,628	$ 24,475

- 10 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~March~~June 3130, 2012

(Unaudited)

The Company’s long-lived assets by geographic area are as follows (in thousands):

	March 31, 2012		December 31, 2011
United States	$	22,992	$	23,818
United Kingdom		312		351
Canada		283		306
	$	23,587	$	24,475

14. RELATED PARTIES

The Company engages the services of Amster, Rothstein & Ebenstein, a law firm of which Board member Daniel S. Ebenstein is a partner. Expenses incurred for services rendered by this law firm were $211,~~200~~500 ~~(including $200 of pass-through expenses),~~ and $132,~~900~~000 ~~(including $700 of pass-through expenses)~~ for the ~~three~~six months ended ~~March~~June 3130, 2012 and ~~April~~July 2, 2011, respectively.

15. COMMITMENTS AND CONTINGENCIES

Commitments & Contingencies

The Company has change-in-control agreements with certain of its employees that provide them with benefits should their employment with the Company be terminated other than for cause or their disability or death, or if they resign for good reason, as defined in these agreements, in connection with or within a certain period of time after the date of any change-in-control of the Company.

From time to time the Company engages in sales of equipment that is leased by or intended to be leased by a third-party purchaser to another party. In certain situations, the Company may retain recourse obligations to a financing institution involved in providing financing to the ultimate lessee in the event the lessee of the equipment defaults on its lease obligations. In certain such instances, the Company may refurbish and remarket the equipment on behalf of the financing company, should the ultimate lessee default on payment of the lease. In certain circumstances, should the resale price of such equipment fall below certain predetermined levels, the Company would, under these arrangements, reimburse the financing company for any such shortfall in sale price (a “shortfall payment”). Generally, the Company’s liability for these recourse agreements is limited to 9.5% of the amount outstanding. The maximum amount for which the Company was liable to the financial institutions for the shortfall payments was approximately $0.5 million at ~~March~~June 3130, 2012 and $0.7 million at ~~April~~July 2, 2011.

- 17 -

PRESSTEK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

March 31, 2012

(Unaudited)

Litigation

The Company is involved in litigation that it considers routine and incidental to its business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The potential liability is assessed by analyzing the litigation using available information. The Company develops its views on estimated losses in consultation with outside counsel handling its defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies.

Presstek is a party to litigation that it considers routine and incidental to its business; however, it does not expect the results of any of these actions to have a material adverse effect on its business, results of operation or financial condition.

16. ~~SUBSEQUENT~~ OTHER EVENTS

~~Subsequent~~During to the ~~quarter~~second ~~end~~quarter, the Company ~~announced~~transferred ~~that its application to transfer~~ the listing of its common stock from The NASDAQ Global Market® to The NASDAQ Capital Market® ~~has been approved by NASDAQ~~. This transfer became effective at the opening of business on April 20, 2012, and the Company's common stock continues to trade under the symbol "PRST." The NASDAQ Capital Market is a continuous trading market that operates in substantially the same manner as The NASDAQ Global Market and listed companies must meet certain financial requirements and comply with NASDAQ's corporate governance requirements.

The Company’s ~~also~~shareholders ~~announced~~approved ~~that it will seek stockholder approval of~~ an amendment to its Certificate of Incorporation to effect a reverse stock split in the range of 1-for-2 to 1-for-15 shares of common stock. The Board of Directors ~~would~~retains ~~retain~~ discretion over whether to implement the reverse stock split and over the exact ratio of the reverse stock split. The reverse stock split would provide the Company with a possible means to cure its minimum bid price deficiency for continued listing on The NASDAQ Capital Market, if such action becomes necessary. ~~The proposed reverse stock split will be voted upon at the annual meeting of stockholders to be held June 12, 2012.~~

- 1811 -

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks described below in the section entitled “Information Regarding Forward-Looking Statements”, in “Part II, Item IA Risk Factors” of this Quarterly Report on Form 10-Q and in “Part I, Item 1A, Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as filed with the SEC on March 27, 2012.

Overview of the Company

The Company is a provider of high-technology, digital-based printing solutions to the commercial print segment of the graphic communications industry. The Company designs, manufactures and distributes proprietary and non-proprietary solutions aimed at serving the needs of a wide range of print service providers worldwide. Our proprietary digital imaging and advanced technology consumables offer superior business solutions for commercial printing focusing on the growing need for short-run, high quality color applications. We have helped to lead the industry’s transformation from analog print production methods to digital imaging technology. We are a leader in the development of advanced printing systems using digital imaging equipment, workflow and consumables-based solutions that economically benefit the user through streamlined operations and chemistry-free, environmentally responsible solutions. We are also a leading sales and service channel across the entire commercial and in-plant printing segments.

Presstek’s business model is a capital equipment and consumables model. In this model, approximately two-thirds of our revenue is recurring revenue. Our model is designed so that each placement of either a DI^® press or a computer-to-plate (“CTP”) system generally results in recurring aftermarket revenue for consumables and service. We also provide consumables for use on equipment purchased by end users from other manufacturers and suppliers.

Through our various operations, we:

· provide advanced digital print solutions through the development, manufacture, and sourcing of digital laser imaging equipment and advanced technology chemistry-free and chemistry-based printing plates, which we call consumables, for commercial and in-plant print providers targeting the growing market for high quality, fast turnaround short-run color printing; and

·provide ~~are~~advanced adigital ~~leading~~print ~~sales~~solutions ~~and~~through ~~services~~the ~~company~~development, ~~delivering~~manufacture, ~~Presstek~~and sourcing of digital ~~solutions~~laser imaging equipment and ~~solutions~~advanced ~~from~~technology ~~other~~chemistry-free ~~manufacturing~~and ~~partners~~chemistry-based ~~through~~printing ~~our~~plates, ~~direct~~which ~~sales~~we ~~and~~call ~~service~~consumables, ~~force~~for commercial and ~~through~~in-plant ~~distribution~~print ~~partners~~providers ~~worldwide.~~targeting the growing market for high quality, fast turnaround short-run color printing; and

We have developed the enabling technology for DI® digital offset presses. DI® presses are Presstek’s proprietary system by which digital images are transferred directly onto printing plates that are already mounted on press. Our advanced DI® presses are a waterless, easy to use, high quality printing press that is fully automated and provides our users with competitive advantages over alternative print technologies. We believe that our DI® digital offset presses, in combination with our proprietary printing plates and streamlined workflow, produces a superior offset printing solution. By combining advanced digital technology with the reliability and economic advantages of offset printing, we believe our customers are better able to grow their businesses, generate higher profits and better serve the needs of their customers.·

-are 19a -leading sales and services company delivering Presstek digital solutions and solutions from other manufacturing partners through our direct sales and service force and through distribution partners worldwide.

~~Similar~~We ~~digital~~have ~~imaging~~developed ~~technologies~~the ~~are~~enabling ~~used~~technology infor ~~our~~DI® ~~CTP~~digital ~~systems~~offset presses. WeDI® ~~have~~presses ~~designed~~are ~~and~~Presstek’s ~~manufacture~~proprietary ~~CTP~~system ~~systems~~by ~~that~~which ~~incorporate~~digital ~~our~~images ~~technology~~are totransferred ~~image~~directly ~~our~~onto ~~chemistry-free~~ printing plates that are already mounted on press. Our ~~chemistry-free~~advanced ~~digital~~DI® ~~imaging~~presses ~~systems~~are ~~enable~~a ~~customers~~waterless, easy to ~~produce~~use, high quality, ~~full~~printing ~~color~~press ~~lithographic~~that ~~printed~~is ~~materials~~fully ~~more~~automated ~~quickly~~ and ~~cost~~provides ~~effectively~~our ~~than~~users ~~conventional~~with ~~methods~~competitive ~~that~~advantages ~~employ~~over ~~more~~alternative ~~complicated~~print ~~workflows~~technologies. ~~and~~We ~~toxic~~believe ~~chemical~~that ~~processing.~~our ~~This~~DI® ~~results~~digital offset presses, in ~~reduced~~combination ~~printing~~with ~~cycle~~our ~~time~~proprietary ~~and~~printing ~~lowers~~plates ~~the~~and ~~effective~~streamlined ~~cost~~workflow, ofproduces ~~production~~a ~~for~~superior ~~commercial~~offset ~~printers~~printing solution. ~~Our~~By ~~solutions~~combining ~~make~~advanced itdigital ~~more~~technology ~~cost~~with ~~effective~~the ~~for~~reliability ~~printers~~and toeconomic ~~meet~~advantages ~~the~~of ~~increasing~~offset ~~demand~~printing, ~~for~~we ~~shorter~~believe ~~print~~our ~~runs~~customers are better able to grow their businesses, generate higher ~~quality~~profits ~~color~~ and ~~faster~~better ~~turn-around~~serve ~~times~~the needs of their customers.

InSimilar ~~addition~~digital toimaging ~~marketing,~~technologies ~~selling~~are used in our CTP systems. We have designed and ~~servicing~~manufactured CTP systems that incorporate our ~~proprietary~~technology to image our chemistry-free printing plates. Our chemistry-free digital ~~products,~~imaging wesystems ~~also~~enable ~~market~~customers to produce high quality, ~~sell~~full color lithographic printed materials more quickly and ~~service~~cost ~~traditional~~effectively ~~(or~~than ~~analog)~~conventional ~~products~~methods ~~for~~that ~~the~~employ ~~commercial~~more ~~print~~complicated ~~market~~workflows and toxic chemical processing. This ~~analog~~results ~~equipment~~in isreduced ~~manufactured~~printing bycycle ~~third~~time ~~party~~and ~~strategic~~lowers ~~partners~~the ~~and~~effective cost of production for commercial printers. Our solutions make it more cost effective for printers to meet the ~~analog~~increasing ~~consumables~~demand ~~are~~for ~~manufactured~~shorter byprint ~~either~~runs, ushigher orquality ~~our~~color ~~strategic~~and ~~partners~~faster turn-around times.

WeIn ~~currently~~addition ~~operate~~to inmarketing, ~~only~~selling ~~one~~and ~~industry~~servicing ~~segment.~~our Weproprietary ~~are~~digital ~~primarily~~products, ~~engaged~~we inalso ~~the development~~market, ~~manufacture,~~sell ~~sourcing, selling~~ and ~~servicing~~service oftraditional ~~our~~(or ~~business~~analog) ~~solutions~~products ~~using~~for ~~patented~~the ~~digital~~commercial ~~imaging~~print ~~systems~~market. ~~and~~This ~~patented~~analog ~~printing~~equipment ~~plate~~is ~~technologies.~~manufactured Weby ~~also~~third ~~provide~~party ~~traditional~~strategic ~~analog~~partners ~~systems~~ and ~~related~~the ~~equipment~~analog ~~and~~consumables ~~supplies~~are ~~for~~manufactured ~~the~~by ~~graphic~~either ~~arts~~us ~~and~~or ~~printing~~our ~~industries~~strategic partners.

We ~~generate~~currently ~~revenue~~operate ~~through~~in ~~three~~only ~~main~~one ~~sources:~~industry ~~(i)~~segment. ~~the~~We ~~sale~~are ofprimarily ~~our~~engaged ~~equipment~~in ~~and~~the ~~related~~development, ~~workflow~~manufacture, ~~software~~sourcing, ~~including~~selling ~~DI® presses~~ and ~~CTP~~servicing ~~devices;~~of ~~(ii)~~our ~~the~~business ~~sale~~solutions ofusing ~~our~~patented ~~proprietary~~digital ~~and~~imaging ~~non-proprietary~~systems ~~consumables~~ and ~~supplies;~~patented ~~and~~printing ~~(iii)~~plate ~~the~~technologies. ~~servicing~~We ofalso ~~offset~~provide ~~printing~~traditional analog systems and ~~analog~~related equipment and ~~CTP~~supplies ~~systems~~for the graphic arts and ~~related~~printing ~~equipment~~industries.

~~Strategy~~We generate revenue through three main sources: (i) the sale of our equipment and related workflow software, including DI® presses and CTP devices; (ii) the sale of our proprietary and non-proprietary consumables and supplies; and (iii) the servicing of offset printing systems and analog and CTP systems and related equipment.

Our business strategy is centered on maximizing the sale of consumable products, such as printing plates, and therefore our business efforts focus on the sale of “consumable burning engines” such as our DI® presses and CTP devices, as well as the servicing of customers using our business solutions.Strategy

ToOur ~~complement~~business ~~our~~strategy ~~direct~~is ~~sales~~centered ~~efforts,~~on inmaximizing ~~certain~~the ~~territories,~~sale weof ~~maintain~~consumable ~~OEM~~products, ~~reseller~~such ~~agreements~~as ~~with~~printing ~~Heidelberg~~plates, and ~~Ryobi~~therefore ~~around~~our DIbusiness ~~consumables~~efforts ~~which~~focus ~~they~~on ~~resell~~the tosale ~~their~~of ~~legacy~~“consumable ~~installed~~burning ~~base~~engines” ofsuch DIas ~~equipped~~our DI® presses. ~~Presstek~~and ~~continues~~CTP todevices, ~~sell~~as DIwell ~~consumables~~as to the ~~legacy~~servicing ~~installed base~~ of ~~KBA~~customers ~~Karat~~using ~~(“KBA”)~~our ~~presses~~business solutions.

~~Another~~To ~~method~~complement ofour ~~growing~~direct ~~the~~sales ~~market~~efforts, ~~for~~in ~~consumables~~certain ~~is to develop and distribute consumables that can be imaged by non-Presstek devices (i.e.~~territories, ~~“open~~we ~~platform”~~maintain ~~plates).~~OEM Inreseller ~~addition~~agreements towith ~~expanding~~Heidelberg ~~the~~and ~~base~~Ryobi ofaround ~~our~~ DI® ~~and~~consumables ~~CTP~~which ~~units,~~they anresell ~~element of our focus is~~ to ~~reach~~their ~~beyond~~legacy ~~our proprietary systems and penetrate the~~ installed base of ~~CTP~~DI ~~devices~~equipped ~~in all market segments with our thermal plate offerings~~presses. ~~The~~Presstek ~~first~~continues ~~step in executing this strategy was the launch of our Aurora Pro chemistry-free printing plate designed~~ to besell ~~used~~DI ~~with~~consumables ~~CTP units manufactured by other thermal CTP device manufacturers. In December 2009 we introduced Aeon, a no preheat thermal CTP plate that offers run lengths~~ to ~~200,000~~the ~~without~~legacy ~~baking.~~installed Webase ~~continue~~of toKBA ~~work~~Karat ~~with~~(“KBA”) ~~other CTP manufacturers to qualify our consumables on their systems~~presses. ~~We believe this shift in strategy fundamentally enhances our ability to expand and control our business.~~

~~During~~Another ~~fiscal~~method ~~2010~~of wegrowing ~~took~~the amarket ~~major~~for ~~step~~consumables ~~forward~~is into ~~our~~develop upand distribute consumables that can be imaged by non-~~market~~Presstek ~~growth~~devices ~~strategy~~(i.e., ~~with~~“open platform” plates). In addition to expanding the ~~introduction~~base of our DI® and CTP units, an element of our focus is to reach beyond our proprietary systems and penetrate the ~~new~~installed ~~Presstek~~base ~~75DI®~~of ~~digital~~CTP ~~offset~~devices ~~press~~in all market segments with our thermal plate offerings. The ~~75DI®~~first ~~incorporates~~step ~~Presstek’s~~in ~~next~~executing this strategy was the launch of our Aurora Pro chemistry-~~generation~~free ~~imaging~~printing ~~technology~~plate ~~and~~designed ~~DI®~~to be used with CTP units manufactured by other thermal ~~plates~~CTP ~~into~~device manufacturers. In December 2009 we introduced Aeon, a ~~larger~~no ~~six-page~~preheat ~~format. This~~thermal ~~new~~CTP ~~larger~~plate ~~format~~that ~~press~~offers run lengths to 200,000 ~~which~~without ~~can~~baking. ~~also~~We becontinue ~~purchased~~to work with ~~integrated~~other ~~aqueous~~CTP ~~coating~~manufacturers ~~capability,~~to ~~provides~~qualify usour ~~greater~~consumables ~~access~~on their systems. We believe this shift in strategy fundamentally enhances our ability to ~~the~~expand ~~up-market,~~and ~~larger~~control ~~customers~~our business.

During fiscal 2010 we took a major step forward in our up-market 20growth strategy with the introduction of the new Presstek 75DI® digital offset press. The 75DI® incorporates Presstek’s next-generation imaging technology and DI® thermal plates into a larger six-page format. This new larger format press, which can also be purchased with integrated aqueous coating capability, provides us greater access to the up-market, larger customers.

Since 2007, management has been taking steps to improve the Company’s cost structure and strengthen its balance sheet in order to enable Presstek to improve profitability and strengthen its overall financial position. Our reduced cost levels and balance sheet improvements to date are, in large part, the result of our cost reduction initiatives as described in more detail below, as well as a continuing focused effort to review and manage working capital.

General

We report on a 52- or 53-week, fiscal year ending on the Saturday closest to December 31. Accordingly, the accompanying consolidated financial statements include the ~~thirteen~~26 week periods ended ~~March~~June 3130, 2012 (the “~~first~~second quarter and first ~~three~~six months of fiscal 2012” or “the three months ended ~~March~~June 3130, 2012”) and ~~April~~July 2, 2011 (the “~~first~~second quarter and first ~~three~~six months of fiscal 2011” or “the three months ended ~~April~~July 2, 2011”).

We intend the discussion of our financial condition and results of operations that follows to provide information that will assist in understanding our consolidated financial statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles, policies and estimates affect our consolidated financial statements.

-RESULTS 21OF -OPERATIONS

~~RESULTS~~- OF12 ~~OPERATIONS~~-

Results of operations ~~in dollars and as a percentage of revenue~~ were as follows (in thousands of dollars and unaudited):

		Three months ended
PRESSTEK, INC. AND SUBSIDIARIES
		March 31, 2012							April 2, 2011
CONSOLIDATED STATEMENTS OF OPERATIONS
					% of revenue								% of revenue
(in thousands)
Revenue:
(Unaudited)
Equipment		$	3,500			13.0			$	5,118				16.1
				Three months ended						Six months ended
Consumables			17,564			65.0				20,734				65.1
				June 30,	July 2,		Change			June 30,		July 2,		Change
Service and parts			5,962			22.0				6,028				18.9
				2012	2011		Incr/(Decr)	%		2012		2011		Incr/(Decr)	%
Total revenue			27,026			100.0				31,880				100.0
Revenue
Cost of revenue:
	Equipment			$ 6,386	$ 6,230		$ 156	2.5%		$ 9,886		$ 11,348		$ (1,462)	-12.9%
Equipment			4,213			15.6				5,564				17.5
	Consumables			17,557	19,252		(1,695)	-8.8%		35,120		39,986		(4,866)	-12.2%
Consumables			10,954			40.5				11,229				35.2
	Service and parts			5,718	5,913		(195)	-3.3%		11,681		11,941		(260)	-2.2%
Service and parts			4,560			16.9				5,142				16.1
		Total revenue		29,661	31,395		(1,734)	-5.5%		56,687		63,275		(6,588)	-10.4%
Total cost of revenue			19,727			73.0				21,935				68.8
Cost of revenue
Gross profit			7,299			27.0				9,945				31.2
	Equipment			6,081	6,269		(188)	-3.0%		10,294		11,833		(1,539)	-13.0%
Operating expenses:
	Consumables			10,678	10,386		292	2.8%		21,632		21,615		17	0.1%
Research and development			974			3.6				1,075				3.4
	Service and parts			4,380	4,783		(403)	-8.4%		8,940		9,925		(985)	-9.9%
Sales, marketing and customer support			3,943			14.6				5,264				16.5
		Total cost of revenue		21,139	21,438		(299)	-1.4%		40,866		43,373		(2,507)	-5.8%
General and administrative			2,827			10.5				4,317				13.5
Gross profit				8,522	9,957		(1,435)	-14.4%		15,821		19,902		(4,081)	-20.5%
Amortization of intangible assets			246			0.9				201				0.6
Operating expenses
Restructuring and other charges			-			-				315				1.0
	Research and development			770	1,110		(340)	-30.6%		1,744		2,185		(441)	-20.2%
Total operating expenses			7,990			29.6				11,172				35.0
	Sales, marketing and customer support			4,343	5,609		(1,266)	-22.6%		8,285		10,873		(2,588)	-23.8%
Operating loss			(691	)		(2.6	)			(1,227	)			(3.8	)
	General and administrative			3,380	4,135		(755)	-18.3%		6,207		8,452		(2,245)	-26.6%
Interest and other income (expense), net			(496	)		(1.8	)			(315	)			1.0
	Amortization of intangible assets			289	210		79	37.6%		535		411		124	30.2%
L Loss before income taxes			(1,187	)		(4.4	)			(1, 542	)			(4.8	)
	Restructuring and other charges			-	48		(48)	-100.0%		-		363		(363)	-100.0%
Provision(benefit) for income taxes			37			0.1				( 2	)			0.0
		Total operating expenses		8,782	11,112		(2,330)	-21.0%		16,771		22,284		(5,513)	-24.7%
Net loss		$	(1,224	)		(4.5	)		$	(1,540	)			(4.8	)
Operating loss				(260)	(1,155)		895	77.5%		(950)		(2,382)		1,432	60.1%
Interest and other income (expense), net				(487)	(360)		(127)	-35.3%		(984)		(675)		(309)	-45.6%
Loss before income taxes				(747)	(1,515)		768	50.7%		(1,934)		(3,057)		1,123	36.7%
Provision (benefit) for income taxes				8	183		(175)	99.6%		45		181		(136)	75.1%
Net loss				$ (755)	$ (1,698)		$ 943	55.5%		$ (1,979)		$ (3,238)		$ 1,259	38.9%
Loss per share (basic and diluted)				$ (0.02)	$ (0.05)					$ (0.05)		$ (0.09)

- 2213 -

~~Quarter ending March 31, 2012 Compared to Quarter ending April 2, 2011~~Revenue

~~Revenue~~Consolidated revenue declines in both periods were caused by decreases in consumables and service revenues. Equipment revenue also declined for the first six months of 2012 as compared to 2011.

~~Consolidated~~Equipment ~~revenues~~sales ~~were~~continue ~~$27.0~~to ~~million~~be inimpacted ~~the~~by ~~first~~unfavorable ~~quarter~~economic ofconditions ~~fiscal~~resulting ~~2012 compared to $31.9 million~~ in ~~the~~some ~~prior~~reluctance ~~year~~by ~~quarter,~~small ato ~~decrease~~mid-size ofcustomers ~~15%. The decline~~ in ~~revenues resulted primarily from lower sales of~~ our ~~consumables~~North ~~product~~American ~~lines~~market asto ~~well~~make ascapital anequipment ~~unfavorable~~purchases, ~~mix~~and infinancing ~~sales~~remains ofdifficult ~~our~~to ~~DI equipment units~~obtain.

Net equipment revenues were $3.5 million in the first quarter of 2012 compared to $5.1 million in the comparable prior year quarter, a decrease of 32%. Customers are continuing to delay capital equipment purchases during this weak economy and financing remains difficult to obtain. Gross revenue of DI® presses decreased by $1.7 million, or 40%, to $2.5 million in the first quarter of 2012. Gross revenue of our CTP portfolio of equipment, defined as Dimension Excel, Dimension Pro, Compass, and Vector platesetters, was flat to the prior year quarter at $0.6 million. Gross revenue of our traditional line of equipment, defined as polyester CTP platesetters and conventional equipment and peripherals, was also flat to the prior year quarter at $0.5 million.


	Three months ended				Six months ended
	June 30, 2012	July 2 2011	Change Incr/(Decr)	%	June 30 2012	July 2 2011	Change Incr/(Decr)	%

Consumable Revenue details
Growth Di	$ 3,753	$ 4,088	$ (335)	-8.2%	$ 7,389	$ 8,213	$ (824)	-10.0%
Thermal CTP plates	3,522	3,740	(218)	-5.8%	7,068	7,297	(229)	-3.1%
Traditional (QM DI, other Di, polyester)	5,611	6,564	(953)	-14.5%	11,134	14,254	(3,121)	-21.9%
Traditional other	4,672	4,861	(189)	-3.9%	9,529	10,221	(692)	-6.8%
Total consumable revenue	$ 17,557	$ 19,252	$ (1,695)	-8.8%	$ 35,120	$ 39,986	$ (4,866)	-12.2%

~~Consumables~~Consumable ~~product~~ revenues declined ~~15%,~~for ~~from~~both ~~$20.7~~periods ~~million in the first quarter of 2011 to $17.6 million in the current year quarter, due primarily to the impact of the weak economy~~ and ~~the~~across ~~continuing~~all ~~erosion of our traditional plate and consumables~~ product lines~~. Total~~ ~~sales~~resulting ofprimarily ~~our 34, 52, and 75 DI® plates declined~~ from ~~$4.1~~a ~~million~~declining ininstalled ~~the~~equipment ~~first quarter of fiscal 2011 to $3~~base.6 million in the first quarter of fiscal 2012. Sales of Presstek’s line of CTP plates was $3.5 million in the first quarter of fiscal 2012 and was flat to the comparable prior year quarter. Sales of the remaining lines of traditional plates and consumables decreased from $12.9 million in the prior year first quarter to $10.4 million in the first quarter of fiscal 2012.

Service and ~~parts~~Parts ~~revenues~~Revenue ~~of $6.0 million in the first quarter of 2012 were flat compared to the prior year quarter.~~

~~Cost~~Service and Parts revenue reductions in both periods are due to a declining analog equipment base and a general trend by customers to opt out of ~~Revenue~~service contracts to save money in a difficult economy.

~~Consolidated~~Cost ~~cost~~ of product, consisting of costs of material, labor and overhead, shipping and handling costs and warranty expenses, was $15.2 million in the first quarter of fiscal 2012 compared to $16.8 million in the comparable prior year quarter. The reduction in cost was due primarily to lower sales of both equipment and consumables.Revenue

Consolidated cost of ~~service~~revenue ~~and~~was ~~parts declined from~~ $521.1 million in the ~~first~~second quarter of fiscal ~~2011~~year to2012 and $440.69 million in the first ~~quarter~~six months of ~~fiscal~~ 2012, acompared ~~reduction~~to ~~of 11%~~$21. ~~These~~4 ~~amounts~~million ~~represent the cost of spare parts~~ and ~~labor~~$43.4 ~~and~~million, ~~overhead~~respectively, ~~expense~~in ~~associated with the ongoing service of products~~2011. The ~~reduction~~year-to-date indecrease ~~overall cost~~ is ~~due~~ primarily due to lower ~~field~~revenues ~~service~~and ~~expenses~~cost ~~resulting~~reduction ~~from~~actions ~~cost~~taken ~~reduction~~in ~~initiatives~~the second half of 2011.

-Gross ~~23 -~~Profit

~~Gross~~Consolidated ~~Profit~~gross profit as a percentage of total revenue was 28.7% in the second quarter of fiscal 2012 compared to 31.7% in the second quarter of fiscal 2011; and 27.9% in the first six months of 2012 compared to 31.5% for the first six months of 2011.

~~Gross~~The ~~profit~~margin asdecrease afor ~~percentage~~both ofthe ~~product~~three ~~revenues~~months ~~was~~and ~~28.0%~~six inmonth ~~the~~periods ~~first~~ended ~~quarter~~June of20, ~~fiscal~~ 2012 ~~compared~~is toprimarily ~~35.0%~~due into ~~the~~an ~~first~~unfavorable ~~quarter~~mix of ~~fiscal~~consumable ~~2011~~products. ~~Lower~~ ~~margins~~Additionally, ~~were~~our ~~primarily~~per ~~the~~unit ~~result~~production ofcosts ~~unfavorable~~have ~~equipment~~also ~~and~~risen ~~consumables~~as ~~product mix,~~ a ~~stronger~~result ~~Yen,~~of ~~and unabsorbed manufacturing overhead in our factories resulting from~~ lower overall production.

~~Gross~~Research ~~profit~~and as a percentage of service revenues was 23.5% in the first quarter of fiscal 2012 compared to 14.7% in the comparable prior year quarter. The increase is primarily due to cost reduction efforts implemented in the fourth quarter of fiscal 2011.Development

Research and ~~Development~~development expenses primarily consist of payroll and related expenses for personnel, parts and supplies, and contracted services required to conduct our equipment and consumables development efforts.

~~Research and development expenses primarily consist of payroll and related expenses for personnel~~Sales, ~~parts~~Marketing and ~~supplies,~~Customer and contracted services required to conduct our equipment and consumables development efforts. Research and development expenses decreased to $1.0 million in the first quarter of fiscal 2012 compared to $1.1 million in the first quarter of fiscal 2011.Support

Sales, ~~Marketing~~marketing and ~~Customer~~customer ~~Support~~support expenses primarily consist of payroll and related expenses for personnel, advertising, trade shows, promotional expenses, and travel costs associated with sales, marketing and customer support activities.

Sales, marketing and customer support expenses ~~primarily~~decreased ~~consist~~to of$4.3 ~~payroll~~million ~~and~~in ~~related~~the ~~expenses~~second ~~for~~quarter ~~personnel,~~of ~~advertising,~~fiscal ~~trade~~2012 ~~shows,~~from ~~promotional~~$5.6 ~~expenses,~~million ~~and~~in ~~travel~~the ~~costs~~second ~~associated~~quarter ~~with~~of ~~sales~~fiscal year 2011. Year-to-date selling, marketing and customer support ~~activities~~expenses declined from $10.9 million in the first six months of 2011 to $8.3 million in the comparable current year period. The reductions in expense in both periods resulted primarily from our cost reduction initiatives implemented in the second half of 2011.

~~Sales,~~- ~~marketing~~14 and customer support expenses decreased from $5.3 million in the first quarter of fiscal 2011 to $3.9 million in the first quarter of fiscal 2012. This decrease was primarily due to lower payroll related costs resulting from cost reduction actions as well as lower trade show expense.-

General and Administrative

General and administrative expenses are primarily comprised of payroll and related expenses, including stock compensation, for personnel, and contracted professional services necessary to conduct our general management, finance, information systems, human resources, ~~legal~~ and administrative activities. Favorability in expenses in both periods resulted from our cost reduction initiatives implemented in the second half of 2011, lower stock compensations, and a drop in bad debt ~~reserves~~expenses.

~~General~~Amortization ~~and administrative expenses declined from $4.3 million in the first quarter~~ of ~~fiscal~~Intangible 2011 to $2.8 million in the first quarter of fiscal 2012, a reduction of $1.5 million, or 35%. This decrease was due in large part to cost reduction initiatives undertaken throughout fiscal 2011 in response to the ongoing difficult economic environment, as well as collection of bad debts, and lower non-cash stock compensation.Assets

Amortization ofexpenses ~~Intangible~~relate ~~Assets~~to intangible assets recorded in connection with the Company’s 2004 ABDick acquisition, patents and other purchased intangible assets.

~~Amortization~~Restructuring expense was $0.2 million in the first quarter of fiscal 2012 as well as the comparable prior year quarter. This expense relates to intangible assets recorded in connection with the Company’s 2004 acquisition of assets from A.B. Dick, 75DI development costs, patents, and ~~other~~Other ~~purchased intangible assets.~~Charges

~~Restructuring~~The ~~and~~Company ~~Other~~had ~~Charges~~no restructuring charges during the first six months of 2012. Expenses incurred in 2011 relate to cost reduction initiatives.

~~There~~Interest ~~were~~and noOther ~~restructuring~~Expense, ~~charges in the first quarter of fiscal 2012. Expenses of $0.3 million incurred during the first quarter of fiscal 2011 include restructuring costs related to various cost reduction activities.~~Net

-The 24increase -in expense is driven primarily by additional foreign currency translation losses as well fees incurred to amend our loan with PNC Bank in the first quarter of 2012.

~~Interest~~Provision ~~and~~for ~~Other~~ Income ~~(Expense), Net~~Taxes

~~Interest~~The ~~and~~Company ~~other~~provides for income ~~(expense),~~taxes ~~net,~~at ~~was~~the anend ~~expense~~ of ~~$0.5~~each ~~million~~interim inperiod based on the ~~first~~estimated ~~quarter~~effective oftax rate for the full fiscal ~~2012~~year. Cumulative ~~compared~~adjustments to ~~expense~~the oftax ~~$0.3~~provision ~~million~~are recorded in the ~~comparable~~interim ~~prior~~period ~~year~~in ~~quarter.~~which ~~The~~a ~~increase~~change in ~~expense~~the ~~results~~estimated ~~primarily~~annual ~~from~~effective ~~fees~~rate ~~incurred~~is todetermined. ~~amend~~Our ~~our~~effective ~~loan~~tax ~~agreement~~rate ~~with~~differs ~~PNC~~from ~~Bank in~~ the ~~first~~statutory ~~quarter~~rate ofdue ~~fiscal~~to ~~2012~~valuation ~~and~~allowances anplaced ~~increase~~on intax ~~foreign~~benefits ~~currency~~derived ~~translation~~from ~~expense~~operating losses.

~~Provision~~At ~~for~~June ~~Income~~30, ~~Taxes~~2012, our deferred tax assets, net of valuation allowance, were zero. However, if future events differ from expectations, changes in the valuation allowance may be required. A change in the valuation allowance occurs if there is a change in management’s assessment of the amount of net deferred tax assets that is expected to be realized in the future.

~~The~~Liquidity ~~Company~~and ~~provides~~Capital for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year. Cumulative adjustments to the tax provision are recorded in the interim period in which a change in the estimated annual effective rate is determined. Our effective tax rate differs from the statutory rate due to valuation allowances placed on tax benefits derived from operating losses.Resources

~~The~~We ~~company’s~~finance ~~tax~~our ~~provision/(tax~~operating ~~benefit)~~and ~~was~~capital ~~$37,000~~investment ~~and~~requirements ~~($2,000)~~primarily ~~for~~through ~~the~~cash ~~three~~flows ~~months~~from ~~ended~~operations ~~March~~and 31borrowings. At June 30, 2012, ~~and~~we ~~April~~had $2,.9 ~~2011,~~million ~~respectively,~~of oncash ~~pre-tax~~and ~~losses~~cash ofequivalents and $15.1 million of working capital, compared to $3.27 million of cash and cash equivalents and $121.59 million ~~for~~of ~~the~~working ~~respective~~capital ~~periods~~at July 2, 2011.

AtOperating March 31, 2012, our deferred tax assets, net of valuation allowance, were zero. However, if future events differ from expectations, changes in the valuation allowance may be required. A change in the valuation allowance occurs if there is a change in management’s assessment of the amount of net deferred tax assets that is expected to be realized in the future.Activities

-Our 25operating activities generated $3.3 million of cash during the first six months of fiscal 2012. Cash provided by operating activities came primarily from a positive operating margin after adding back non-cash charges for depreciation, amortization and stock based compensation expense. Improved collections on outstanding receivables and utilization of inventory stocks also contributed to increased cash generation during the quarter.

~~Liquidity~~Our ~~and~~investing ~~Capital~~activities ~~Resources~~during the first six months of fiscal 2012 were not significant.

WeOur ~~finance~~financing ~~our~~activities ~~operating~~used ~~and capital investment requirements primarily through cash flows from operations and borrowings. At March 31, 2012, we had~~ $2.59 million of cash ~~and~~during ~~cash~~the ~~equivalents~~first ~~and~~six ~~$15.0~~months ~~million~~for ofdebt ~~working~~repayments ~~capital,~~under ~~compared~~our toline ~~$3.2 million~~ of ~~cash and cash equivalents and $22~~credit.~~7 million of working capital at April 2, 2011.~~

~~Operating Activities~~Liquidity

~~Our~~On ~~operating~~March ~~activities~~5, ~~provided~~2010, ~~$2.4 million of cash generation during~~ the ~~first~~Company ~~three~~entered ~~months~~into ~~of fiscal 2012. Cash provided by operating activities came primarily from~~ a ~~positive~~Revolving ~~operating~~Credit ~~margin~~and ~~after~~Security ~~adding~~Agreement ~~back~~(“Credit ~~non-cash~~Agreement”) ~~charges~~among ~~for~~the ~~depreciation,~~Company ~~amortization~~ and ~~stock~~PNC ~~based~~Bank, ~~compensation~~National ~~expense.~~Association ~~Improved~~(“PNC”), ~~collections~~as onLender ~~outstanding receivables~~ and ~~utilization~~as ofadministrative ~~inventory~~agent ~~stocks~~for ~~also~~Lenders ~~contributed~~(PNC, toin ~~increased~~such ~~cash~~agency ~~generation~~capacity, ~~during~~ the ~~quarter~~“Agent”).

~~Our~~The ~~investing~~Credit ~~activities~~Agreement, ~~used~~which has a term expiring on March 5, 2013, provides for funding of up to $025.10 million through a revolving credit facility (the “Revolver”). Borrowing availability under the Revolver is determined based on a percentage of ~~net~~eligible ~~cash~~accounts ~~during~~receivable and inventory of the ~~first~~Company ~~three~~and ~~months~~certain of ~~fiscal~~its ~~2012~~subsidiaries. The ~~primarily~~Company ~~for~~may ~~additions~~terminate the Credit Agreement at any time prior to ~~property,~~the ~~plant~~maturity ~~and~~date ~~equipment~~upon thirty (30) days’ prior written notice and ~~patent~~upon ~~applications~~payment in full of all outstanding obligations under the Credit Agreement. If the Company terminates the Credit Agreement within the first 35 months the Company must pay an early termination fee as specified in the Credit Agreement. The Credit Agreement requires the Company to prepay a portion of borrowings under the Credit Agreement out of the proceeds of certain dispositions of property.

~~Our~~Borrowings ~~financing~~under ~~activities~~the ~~used~~Credit $Agreement bear interest at the Revolving Interest Rate. The Revolving Interest Rate is calculated differently for domestic rate loans and for Eurodollar rate loans. For domestic rate loans the interest rate per annum is equal to the sum of the Alternate Base Rate plus two and one half percent (2.650%). The ~~million~~Alternate Base Rate is defined as a rate per annum, for any day, equal to the higher of ~~cash~~(i) ~~during~~PNC’s published reference rate, (ii) the ~~first~~Federal ~~three~~Funds ~~months~~Open rate in effect on such day plus one half of ~~fiscal~~one ~~2012,~~percent ~~consisting~~(0.50%) ~~primarily~~or (iii) the Daily LIBOR Rate in effect on such day plus one percent (1.0%). For Eurodollar rate loans the interest rate per annum is equal to the sum of $2three and one-half percent (3.550%) ~~million~~plus the greater of ~~repayments~~(a) the ~~under~~Eurodollar ~~our~~rate, ~~line~~or (b) one percent (1.0%). The Credit Agreement requires monthly interest payments with respect to domestic rate loans and a payment at the end of ~~credit~~each interest period with respect to Eurodollar rate loans.

-Borrowings 26under -the Credit Agreement are secured by all of the assets of Presstek, Inc. and certain of its domestic and foreign subsidiaries that guaranty the obligations of Presstek, Inc., including all receivables, equipment, general intangibles, inventory, investment property, subsidiary stock, owned real property and leasehold interests of the Company.

~~Liquidity~~Under the Credit Agreement the Company is required to provide monthly Borrowing Base Certificates to the Agent that become the basis for calculating the Credit Agreement’s Formula Amount. The Formula Amount, capped at $25 million, represents the maximum amount of advances available to the Company at a given point in time. The Formula Amount is normally calculated 20 days subsequent to the close of each fiscal month. Because of the timing delay, the Agent utilizes a process that estimates the maximum amount available daily during each fiscal period. As of June 30, 2012 the Formula Amount (net of the availability block of $1.25 million) was $15.1 million and the Company had outstanding balances on its line of credit of $10.8 million. The amount available under the credit line, based on the Formula Amount, was $4.3 million as of June 30, 2012.

OnUnder ~~March~~the 5terms of the Credit Agreement, ~~2010~~the Company is required to comply with certain financial and non-financial covenants. Among other restrictions, the Company ~~entered~~is ~~into~~restricted in its ability to pay dividends, incur additional debt and make acquisitions and divestitures, with certain exceptions. The key financial covenants include a ~~Revolving~~requirement ~~Credit~~for the Company to maintain a certain fixed charge coverage ratio and ~~Security~~a limit on capital expenditures for the Company’s first, second, third and fourth fiscal quarters in 2010 of $385,000, $1,238,000, $1,139,000 and $614,000, respectively, and $4,000,000 in each fiscal year thereafter. As of December 31, 2011 the Credit Agreement (“required the Company to maintain a rolling four quarter cumulative fixed charge coverage ratio of 1.0 to 1.0. Pursuant to an amendment to the Credit Agreement”) ~~among~~dated February 7, 2012, the fixed charge coverage ratio has been changed. The Company is required to maintain a fixed charge coverage ratio of 1.25 to 1.0 for the following periods: with respect to the fiscal quarter ending on or about June 30, 2012, for the fiscal quarter then ending; with respect to the fiscal quarter ending on or about June 30, 2012, for the two fiscal quarters then ending; with respect to the fiscal quarter ending on or about September 30, 2012, for the three fiscal quarters then ending; with respect to the fiscal quarter ending on or about December 31, 2012 and ~~PNC~~for ~~Bank~~each fiscal quarter ending thereafter, ~~National~~in ~~Association~~each case for the four fiscal quarters then ending. In addition, pursuant to the amendment dated February 7, 2012, the Availability Block (~~“PNC”~~as defined in the Loan Agreement) of $2 million, aswhich ~~Lender~~was to be re-established on January 31, 2012, will be re-established on the following schedule: (i) for the period commencing on January 31, 2012 and asending ~~administrative~~on ~~agent~~the last day of the fiscal quarter ending on or about June 30, 2012, $1.0 million, (ii) for ~~Lenders~~the period commencing on the first day of the fiscal quarter commencing on or about April 1, 2012 and ending on the last day of such fiscal quarter, $1.25 million, (~~PNC~~iii) for the period commencing on the first day of the fiscal quarter commencing on or about July 1, in2012 and ending on the last day of such ~~agency~~fiscal ~~capacity~~quarter, $1.5 million, (iv) for the ~~“Agent”~~period commencing on the first day of the fiscal quarter commencing on or about October 1, 2012 and ending on the last day of such fiscal quarter, $1.75 million and (v) for the period commencing on the first day of the fiscal year commencing on or about January 1, 2013 and through the expiration of the Loan Agreement, $2.0 million.

~~The~~- ~~Credit~~15 Agreement, which has a term expiring on March 5, 2013, provides for funding of up to $25.0 million through a revolving credit facility (the “Revolver”). Borrowing availability under the Revolver is determined based on a percentage of eligible accounts receivable and inventory of the Company and certain of its subsidiaries. The Company may terminate the Credit Agreement at any time prior to the maturity date upon thirty (30) days’ prior written notice and upon payment in full of all outstanding obligations under the Credit Agreement. If the Company terminates the Credit Agreement within the first 35 months the Company must pay an early termination fee as specified in the Credit Agreement. The Credit Agreement requires the Company to prepay a portion of borrowings under the Credit Agreement out of the proceeds of certain dispositions of property.-

~~Borrowings~~As ~~under~~of ~~the~~June ~~Credit~~30, ~~Agreement~~2012, ~~bear interest at~~ the ~~Revolving~~Company ~~Interest~~was ~~Rate.~~fully ~~The~~in ~~Revolving~~compliance ~~Interest~~with ~~Rate~~all isfinancial ~~calculated differently for domestic rate loans and for Eurodollar rate loans~~covenants. ~~For~~The ~~domestic~~fixed ~~rate~~charge ~~loans~~ratio for the ~~interest~~quarter ~~rate~~ended ~~per~~June ~~annum~~30, is2012 ~~equal~~was 6.72 to ~~the~~1.0, ~~sum~~in excess of the ~~Alternate~~1.25 ~~Base~~to ~~Rate~~1.0 ~~plus~~minimum ~~two~~required ~~and one half percent (2~~ratio.~~50%).~~ ~~The Alternate Base Rate is defined as a rate per annum~~Additionally, ~~for~~since ~~any day, equal to~~ the ~~higher~~inception of ~~(i)~~the ~~PNC’s~~Credit ~~published reference rate~~Agreement, ~~(ii)~~ the ~~Federal~~Company’s ~~Funds~~quarterly ~~Open~~capital ~~rate~~expenditures inhave ~~effect~~been onwell ~~such~~below ~~day~~the ~~plus~~maximum ~~one~~levels ~~half of one percent (0~~allowed.~~50%)~~ orThe ~~(iii)~~Company’s ~~the~~current ~~Daily~~credit ~~LIBOR~~agreement ~~Rate~~expires in ~~effect~~March on2013. The ~~such~~Company ~~day~~intends ~~plus~~to ~~one~~seek ~~percent~~an ~~(1.0%).~~extension ~~For~~of ~~Eurodollar rate loans~~ the ~~interest~~current ~~rate~~credit ~~per~~agreement ~~annum~~or isa ~~equal~~replacement toof the ~~sum~~current offinancing ~~three~~arrangement ~~and~~with ~~one-half~~another ~~percent (3~~lender.~~50%)~~ ~~plus the greater of (a) the Eurodollar rate~~However, orthere ~~(b) one~~can ~~percent~~be ~~(1.0%). The~~no ~~Credit~~assurance ~~Agreement~~that ~~requires~~the ~~monthly~~Company ~~interest~~will ~~payments~~be ~~with~~able ~~respect~~ to ~~domestic~~obtain ~~rate~~an ~~loans~~extension ~~and~~of ~~a payment at~~ the ~~end~~current ofcredit ~~each~~agreement ~~interest~~or ~~period~~obtain ~~with~~adequate ~~respect~~financing tofrom ~~Eurodollar~~another ~~rate loans~~source.

~~Borrowings~~The ~~under~~weighted ~~the~~average ~~Credit~~interest ~~Agreement~~rate ~~are~~on ~~secured by all of~~ the ~~assets~~Company’s ofshort-term ~~Presstek,~~borrowings ~~Inc.~~was ~~and certain of its domestic and foreign subsidiaries that guaranty the obligations of Presstek, Inc~~4.,71% ~~including~~at ~~all~~June ~~receivables~~30, ~~equipment, general intangibles, inventory, investment property, subsidiary stock, owned real property and leasehold interests of the Company~~2012.

~~Under~~Commitments the Credit Agreement the Company is required to provide monthly Borrowing Base Certificates to the Agent that become the basis for calculating the Credit Agreement’s Formula Amount. The Formula Amount, capped at $25 million, represents the maximum amount of advances available to the Company at a given point in time. The Formula Amount is normally calculated 20 days subsequent to the close of each fiscal month. Because of the timing delay, the Agent utilizes a process that estimates the maximum amount available daily during each fiscal period. As of March 31, 2012 the Formula Amount was $12.4 million and ~~the Company had outstanding balances on its line of credit of $11.3 million. The amount available under the credit line, based on the Formula Amount, was $1.1 million as of March 31, 2012.~~ Contingencies

~~Under~~The ~~the terms of the Credit Agreement, the~~ Company ishas ~~required to comply with certain financial and non~~change-~~financial covenants. Among other restrictions, the Company is restricted~~ in-control ~~its~~agreements ~~ability to pay dividends, incur additional debt and make acquisitions and divestitures,~~ with certain exceptions. The key financial covenants include a requirement for the Company to maintain a certain fixed charge coverage ratio and a limit on capital expenditures for the Company’s first, second, third and fourth fiscal quarters in 2010 of ~~$385,000,~~its ~~$1,238,000,~~employees ~~$1,139,000~~that ~~and~~provide ~~$614,000,~~them ~~respectively,~~with ~~and~~benefits ~~$4,000,000~~should intheir ~~each~~employment ~~fiscal~~with ~~year thereafter. As of December 31, 2011~~ the ~~Credit Agreement required the~~ Company tobe ~~maintain~~terminated aother ~~rolling~~than four quarter cumulative fixed charge coverage ratio of 1.0 to 1.0. Pursuant to an amendment to the Credit Agreement dated February 7, 2012, the fixed charge coverage ratio has been changed. The Company is required to maintain a fixed charge coverage ratio of 1.25 to 1.0 for ~~the~~cause ~~following periods: with respect to the fiscal quarter ending on~~ or ~~about~~their ~~March~~disability ~~31, 2012, for the fiscal quarter then ending; with respect to the fiscal quarter ending on~~ or ~~about June 30~~death, ~~2012, for the two fiscal quarters then ending; with respect to the fiscal quarter ending on~~ or ~~about~~if ~~September~~they ~~30,~~resign ~~2012,~~ for ~~the~~good ~~three fiscal quarters then ending; with respect to the fiscal quarter ending on or about December 31~~reason, ~~2012~~as ~~and~~defined ~~for~~in ~~each~~these ~~fiscal quarter ending thereafter~~agreements, in ~~each~~connection ~~case~~with ~~for~~or ~~the~~within ~~four~~a ~~fiscal~~certain ~~quarters~~period ~~then~~of ~~ending. In~~time ~~addition,~~after ~~pursuant to~~ the ~~amendment~~date ~~dated~~of ~~February~~any ~~7, 2012, the Availability Block (as defined~~ change-in-control ~~the Loan Agreement)~~ of $2the ~~million, which was to be re-established on January 31,~~Company.

-From 27time to time the Company engages in sales of equipment that is leased by or intended to be leased by a third-party purchaser to another party. In certain situations, the Company may retain recourse obligations to a financing institution involved in providing financing to the ultimate lessee in the event the lessee of the equipment defaults on its lease obligations. In certain such instances, the Company may refurbish and remarket the equipment on behalf of the financing company, should the ultimate lessee default on payment of the lease. In certain circumstances, should the resale price of such equipment fall below certain predetermined levels, the Company would, under these arrangements, reimburse the financing company for any such shortfall in sale price (a “shortfall payment”). Generally, the Company’s liability for these recourse agreements is limited to 9.5% of the amount outstanding. The maximum amount for which the Company was liable to the financial institutions for the shortfall payments was approximately $0.5 million at June 30, 2012 and $0.7 million at July 2, 2011.

~~2012,~~Effect ~~will be re-established on the following schedule: (i) for the period commencing on January 31, 2012 and ending on the last day~~ of the fiscal quarter ending on or about March 31, 2012, $1.0 million, (ii) for the period commencing on the first day of the fiscal quarter commencing on or about April 1, 2012 and ending on the last day of such fiscal quarter, $1.25 million, (iii) for the period commencing on the first day of the fiscal quarter commencing on or about July 1, 2012 and ending on the last day of such fiscal quarter, $1.5 million, (iv) for the period commencing on the first day of the fiscal quarter commencing on or about October 1, 2012 and ending on the last day of such fiscal quarter, $1.75 million and (v) for the period commencing on the first day of the fiscal year commencing on or about January 1, 2013 and through the expiration of the Loan Agreement, $2.0 million.Inflation

AsInflation ofhas ~~March~~not ~~31,~~had ~~2012,~~a ~~the~~material ~~Company~~impact ~~was~~on ~~fully~~our ~~in compliance with all~~ financial ~~covenants. The~~conditions ~~fixed~~or ~~charge~~results ~~ratio for the quarter ended March 31, 2012 was 3.0 to 1.0, in excess~~ of ~~the 1~~operations.25 to 1.0 minimum required ratio. Additionally, since the inception of the Credit Agreement, the Company’s quarterly capital expenditures have been well below the maximum levels allowed. The Company’s current credit agreement expires in March 2013. The Company intends to seek an extension of the current credit agreement of a replacement of the current financing arrangement with another lender. However, there can be no assurance that the Company will be able to obtain an extension of the current credit agreement or obtain adequate financing from another source.

~~The weighted average interest rate on the Company’s short~~-~~term~~ ~~borrowings~~16 ~~was 4.99% at March 31, 2012.~~-

~~Commitments~~Information ~~and~~Regarding ~~Contingencies~~Forward-Looking Statements

~~The~~Statements ~~Company~~other ~~has~~than ~~change-in-control~~those ~~agreements~~of ~~with~~historical ~~certain~~fact ofcontained ~~its~~in ~~employees~~this ~~that~~Quarterly ~~provide~~Report ~~them~~on ~~with~~Form ~~benefits~~10-Q ~~should~~constitute ~~their~~“forward-looking ~~employment~~statements” ~~with~~within the ~~Company~~meaning beof ~~terminated~~the ~~other~~Private ~~than~~Securities ~~for~~Litigation ~~cause~~Reform orAct ~~their~~of ~~disability or death~~1995, ~~or if they resign for good reason~~including, aswithout ~~defined in these agreements~~limitation, instatements ~~connection~~regarding ~~with or within a certain period of time after~~ the ~~date of any change-in-control of the Company.~~following:

~~From~~• ~~time~~our expectations regarding our ability to ~~time~~comply with the ~~Company~~terms ~~engages~~of inour ~~sales~~financing agreement; • the adequacy of ~~equipment~~internal ~~that~~cash isand ~~leased~~working bycapital orfor ~~intended~~our tooperations; be• ~~leased~~manufacturing byconstraints aand ~~third-party~~difficulties; ~~purchaser~~• tothe ~~another~~introduction ~~party.~~of Incompetitive ~~certain~~products ~~situations,~~into the ~~Company~~marketplace; ~~may~~• ~~retain~~the ~~recourse~~ability ~~obligations~~of the Company and its divisions to agenerate ~~financing~~positive ~~institution~~cash ~~involved~~flows in ~~providing~~the ~~financing~~near-term, or to ~~the~~otherwise ~~ultimate~~be ~~lessee~~profitable; in• ~~the~~our ~~event~~ability to produce commercially competitive products; • the ~~lessee~~strength of ~~the~~our ~~equipment~~various ~~defaults~~strategic partnerships, both on ~~its~~manufacturing ~~lease~~and ~~obligations.~~distribution; In• ~~certain~~our ~~such~~ability ~~instances,~~to ~~the~~secure ~~Company~~other ~~may~~strategic ~~refurbish~~alliances and ~~remarket~~relationships; ~~the~~• ~~equipment~~our onexpectations ~~behalf~~regarding of the ~~financing~~Company’s ~~company~~strategy for growth, ~~should~~including statements regarding the ~~ultimate~~Company’s ~~lessee~~expectations ~~default~~for oncontinued ~~payment~~product ofmix improvement; • our expectations regarding the ~~lease.~~balance, Inindependence ~~certain~~and ~~circumstances~~control of our business; • our expectations and plans regarding market penetration, ~~should~~including the ~~resale~~strength ~~price~~and scope of ~~such~~our ~~equipment~~distribution ~~fall~~channels ~~below~~and ~~certain~~our ~~predetermined~~expectations ~~levels,~~regarding ~~the~~sales ~~Company~~of ~~would,~~DI ~~under~~presses ~~these~~or ~~arrangements,~~CTP ~~reimburse~~devices; • the ~~financing~~commercialization ~~company~~and ~~for~~marketing ~~any~~of ~~such~~our ~~shortfall~~technology; in• ~~sale~~our ~~price~~expectations (aregarding ~~“shortfall~~performance ~~payment”).~~of ~~Generally~~existing, planned and recently introduced products; • the ~~Company’s~~adequacy ~~liability~~of ~~for~~our ~~these~~intellectual ~~recourse~~property ~~agreements~~protections isand ~~limited~~our ability to ~~9.5%~~protect ofand ~~the~~enforce ~~amount~~our ~~outstanding.~~intellectual ~~The~~property ~~maximum~~rights; ~~amount~~• ~~for~~the ~~which~~expected ~~the~~effect ~~Company~~of ~~was~~adopting ~~liable~~recently toissued ~~the~~accounting ~~financial~~standards, ~~institutions~~among ~~for~~others; • the ~~shortfall~~recoverability ~~payments~~of ~~was~~our ~~approximately~~intangible ~~$0.5~~assets ~~million~~and atother ~~March~~long-lived ~~31,~~assets; ~~2012~~and • the volatility and ~~$0.7~~fluctuation ~~million~~of atforeign ~~April~~currencies 2(Euro, ~~2011.~~British Pound, Japanese Yen)

~~Effect~~- of17 ~~Inflation~~-

~~Inflation~~Such ~~has~~forward-looking ~~not~~statements ~~had~~involve a ~~material~~number ~~impact~~of onknown and unknown risks, uncertainties and other factors which may cause our ~~financial~~actual ~~conditions~~results, performance or achievements to be materially different from any future results, ofperformance ~~operations~~or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors that could cause or contribute to such differences include without limitation, the risks and uncertainties described in and referred to in Part II – Item 1A of this Quarterly Report on Form 10-Q and:

• market acceptance of and demand for our products and resulting revenues; • our ability to meet our stated financial objectives; • our dependency on our strategic partners, both on manufacturing and distribution; • the introduction of competitive products into the marketplace; • shortages of critical or sole-source 28component supplies; • the availability and quality of laser diodes; • the performance and market acceptance of our recently-introduced products, and our ability to invest in new product development; • manufacturing constraints or difficulties (as well as manufacturing difficulties experienced by our sub-manufacturing partners and their capacity constraints); • the impact of general market factors in the print industry in general; • current or worsening liquidity contraction impacts upon us and our customers; • our ability to comply with the terms of our credit facilities; • current or worsening capital and credit market conditions and their potentially adverse effects on our access to capital, cost of capital and business operations; • current or worsening economic conditions and their potentially adverse effects on the Company’s business and results of operations; and • an inability to maintain the listing of our common stock on the NASDAQ stock market.

~~Information~~The ~~Regarding~~words ~~Forward~~“looking forward,” “looking ahead,” “believe(s),” “should,” “plan,” “expect(s),” “project(s),” “anticipate(s),” “may,” “likely,” “potential,” “opportunity” and similar expressions identify forward-~~Looking~~looking ~~Statements~~statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report and readers are advised to consider such forward-looking statements in light of the risks set forth herein. Presstek undertakes no obligation to update any forward-looking statements contained in this Quarterly Report on Form 10-Q, except as required by law.

~~Statements~~Critical ~~other~~Accounting ~~than~~Policies ~~those~~and of historical fact contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding the following:Estimates

• our expectations regarding our ability to comply with the terms of our financing agreement; • the adequacy of internal cash and working capital for our operations; • manufacturing constraints and difficulties; • the introduction of competitive products into the marketplace; • the ability of the Company and its divisions to generate positive cash flows in the near-term, or to otherwise be profitable; • our ability to produce commercially competitive products; • the strength of our various strategic partnerships, both on manufacturing and distribution; • our ability to secure other strategic alliances and relationships; • our expectations regarding the Company’s strategy for growth, including statements regarding the Company’s expectations for continued product mix improvement; • our expectations regarding the balance, independence and control of our business; • our expectations and plans regarding market penetration, including the strength and scope of our distribution channels and our expectations regarding sales of DI presses or CTP devices; • the commercialization and marketing of our technology; • our expectations regarding performance of existing, planned and recently introduced products; • the adequacy of our intellectual property protections and our ability to protect and enforce our intellectual property rights; • the expected effect of adopting recently issued accounting standards, among others; • the recoverability of our intangible assets and other long-lived assets; and the volatility and fluctuation of foreign currencies (Euro, British Pound, Japanese Yen)General

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to product returns; warranty obligations; allowances for doubtful accounts; slow-moving 29and obsolete inventories; income taxes; the valuation of intangible assets, long-lived assets and deferred tax assets; stock-based compensation and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

~~Such~~For ~~forward-looking statements involve~~ a ~~number~~complete discussion of ~~known~~our ~~and~~critical ~~unknown~~accounting ~~risks,~~policies ~~uncertainties~~ and ~~other~~estimates, ~~factors~~refer ~~which~~to ~~may cause~~ our ~~actual~~Annual ~~results,~~Report ~~performance~~on orForm ~~achievements~~10-K tofor bethe ~~materially~~fiscal ~~different~~year ~~from~~ended ~~any~~December ~~future results~~31, ~~performance~~2011 orwhich ~~achievements~~was ~~expressed~~filed orwith ~~implied~~the bySEC ~~such~~on ~~forward-looking~~March ~~statements. Such risks~~27, ~~uncertainties~~2012. There ~~and~~were ~~other~~no ~~factors~~significant ~~that~~changes ~~could cause or contribute~~ to ~~such differences include without limitation,~~ the ~~risks~~Company’s ~~and~~critical ~~uncertainties~~accounting ~~described~~policies in ~~and~~the ~~referred~~six tomonths inended ~~Part~~June II30, ~~– Item 1A of this Quarterly Report on Form 10-Q and:~~2012.

•Recently ~~market~~Issued ~~acceptance~~Accounting of and demand for our products and resulting revenues; • our ability to meet our stated financial objectives; • our dependency on our strategic partners, both on manufacturing and distribution; • the introduction of competitive products into the marketplace; • shortages of critical or sole-source component supplies; • the availability and quality of laser diodes; • the performance and market acceptance of our recently-introduced products, and our ability to invest in new product development; • manufacturing constraints or difficulties (as well as manufacturing difficulties experienced by our sub-manufacturing partners and their capacity constraints); • the impact of general market factors in the print industry in general; • current or worsening liquidity contraction impacts upon us and our customers; • our ability to comply with the terms of our credit facilities; • current or worsening capital and credit market conditions and their potentially adverse effects on our access to capital, cost of capital and business operations; • current or worsening economic conditions and their potentially adverse effects on the Company’s business and results of operations; and • an inability to maintain the listing of our common stock on the NASDAQ stock market.Standards

~~The~~In ~~words~~June ~~“looking forward~~2011,” ~~“looking~~the ~~ahead,”~~FASB ~~“believe(s),”~~issued ~~“should,”~~ASU ~~“plan~~2011-05,” ~~“expect(s),”~~Presentation ~~“project(s),”~~of ~~“anticipate~~Comprehensive Income (sTopic 220),”. ~~“may,”~~This ~~“likely~~guidance,” ~~“potential,”~~effective ~~“opportunity”~~retrospectively ~~and~~for ~~similar~~the ~~expressions~~interim ~~identify~~and ~~forward-looking~~annual ~~statements.~~periods ~~Readers~~beginning ~~are~~on ~~cautioned~~or ~~not~~after toDecember ~~place~~15, ~~undue~~2011, ~~reliance~~requires onpresentation ~~these~~of ~~forward-looking~~total ~~statements~~comprehensive income, ~~which~~the ~~speak~~components ~~only~~of asnet ofincome, and the ~~date~~components of ~~this~~other ~~report~~comprehensive ~~and~~income ~~readers~~either ~~are~~in ~~advised~~a tosingle ~~consider~~continuous ~~such~~statement ~~forward-looking~~of ~~statements~~comprehensive inincome ~~light~~or ofin ~~the~~two ~~risks~~separate ~~set~~but ~~forth~~consecutive ~~herein~~statements. ~~Presstek~~The ~~undertakes~~adoption noof ~~obligation~~this toguidance ~~update~~did ~~any~~not ~~forward-looking~~have ~~statements~~a ~~contained~~material inimpact ~~this~~upon ~~Quarterly~~our ~~Report~~financial onposition ~~Form~~and ~~10-Q,~~results ~~except~~of ~~as required by law~~operations.

Off-Balance 30Sheet -Arrangements

~~Critical~~We ~~Accounting~~do ~~Policies~~not ~~and~~participate ~~Estimates~~in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities (“SPEs”), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purpose. At June 30, 2012, we were not involved in any unconsolidated SPE transactions.

~~General~~Item 4. Controls and Procedures

~~Our~~This ~~Management’s~~report ~~Discussion~~includes and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the ~~reported~~certifications ~~amounts~~ of ~~assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate~~ our ~~estimates,~~Chief ~~including~~Executive ~~those~~Officer ~~related~~(CEO) ~~to product returns; warranty obligations; allowances for doubtful accounts; slow-moving~~ and ~~obsolete~~Chief ~~inventories;~~Financial ~~income~~Officer ~~taxes;~~(CFO) ~~the~~required ~~valuation~~by ofRule ~~intangible assets, long~~13a-~~lived~~14 ~~assets and deferred tax assets; stock-based compensation and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable~~ under the ~~circumstances,~~Securities ~~the~~Exchange ~~results~~Act of ~~which~~1934 ~~form~~ (the ~~basis~~“Exchange ~~for~~Act”). ~~making~~See ~~judgments~~Exhibits ~~about~~31.1 ~~the carrying values of assets~~ and ~~liabilities~~31.2. ~~that~~This ~~are~~Item ~~not~~4 ~~readily~~includes ~~apparent~~information ~~from~~concerning ~~other~~the ~~sources.~~controls ~~Actual~~and ~~results~~procedures ~~may~~and ~~differ~~evaluations ~~from~~thereof ~~these~~referred ~~estimates~~to ~~under~~in ~~different~~those ~~assumptions or conditions~~certifications.

~~For a complete discussion of our critical accounting policies and estimates, refer to our Annual Report on Form 10~~-K ~~for~~18 the fiscal year ended December 31, 2011 which was filed with the SEC on March 27, 2012. There were no significant changes to the Company’s critical accounting policies in the three months ended March 31, 2012.-

~~Recently~~Evaluation ~~Issued~~of ~~Accounting~~Disclosure ~~Standards~~Controls and Procedures

InAn ~~June~~evaluation ~~2011,~~was performed under the ~~FASB~~supervision ~~issued~~and ~~ASU~~with ~~2011-05,~~the ~~Presentation~~participation of ~~Comprehensive~~the ~~Income~~Company’s ~~(Topic 220). This guidance~~management, ~~effective~~including ~~retrospectively for~~ the ~~interim~~CEO and ~~annual~~CFO, ~~periods~~of ~~beginning~~the oneffectiveness orof ~~after~~the ~~December~~design ~~15,~~and ~~2011,~~operation ~~requires presentation~~ of ~~total comprehensive income,~~ the ~~components~~Company’s ofdisclosure ~~net~~controls ~~income,~~ and procedures as the ~~components~~end of ~~other~~the ~~comprehensive~~period ~~income~~covered ~~either~~by inthis aquarterly ~~single~~report. Based ~~continuous~~on ~~statement~~that ofevaluation, ~~comprehensive~~the ~~income~~Company’s ormanagement, inincluding ~~two~~the ~~separate~~CEO ~~but~~and ~~consecutive~~CFO, ~~statements.~~concluded ~~The~~that ~~adoption~~the ofCompany’s ~~this~~disclosure ~~guidance~~controls ~~did~~and ~~not~~procedures ~~have~~are aeffective ~~material~~as ~~impact~~at ~~upon~~end ~~our~~of ~~financial~~the ~~position~~period ~~and~~covered ~~results~~by ofthis ~~operations~~quarterly report.

~~Off-Balance~~ Changes ~~Sheet~~in ~~Arrangements~~Internal Control over Financial Reporting

WeDuring dothe ~~not~~first ~~participate~~six inmonths ~~transactions~~of ~~that~~fiscal ~~generate relationships with unconsolidated entities or financial partnerships~~2012, ~~such~~there ashas ~~entities~~been ~~often~~no ~~referred~~change toin asthe ~~structured~~Company’s ~~finance~~internal orcontrol ~~special~~over ~~purpose~~financial ~~entities~~reporting ~~(“SPEs”),~~that ~~which~~has ~~would~~materially ~~have~~affected ~~been established for the purpose of facilitating off-balance sheet arrangements~~ or ~~other~~is ~~contractually~~reasonably ~~narrow~~likely orto ~~limited~~materially ~~purpose. At March 31~~affect, ~~2012,~~the weCompany’s ~~were~~internal ~~not~~control ~~involved~~over infinancial ~~any unconsolidated SPE transactions~~reporting.

- 3119 -

~~Item~~PART ~~4. Controls~~II OTHER ~~and Procedures~~INFORMATION

~~This~~Item ~~report includes the certifications of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) required by Rule 13a-14 under the Securities Exchange Act of 1934 (the “Exchange Act”)~~1A. ~~See~~Risk ~~Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and procedures and evaluations thereof referred to in those certifications.~~Factors

~~Evaluation~~This Form 10-Q should be read together with the “RISK FACTORS” section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the U.S. Securities and Exchange Commission (“SEC”), which describe various risks and uncertainties to which we are or may become subject, and is supplemented by the discussion below. These risks and uncertainties could, directly or indirectly, adversely affect our business, financial condition, results of ~~Disclosure~~operations, ~~Controls~~cash flows, strategies and/or ~~Procedures~~prospects.

AnIf ~~evaluation~~we ~~was~~do ~~performed~~not ~~under~~meet the ~~supervision~~NASDAQ ~~and~~Stock ~~with~~Market ~~the~~continued ~~participation~~listing ~~of the Company’s management~~requirements, ~~including~~our ~~the~~common ~~CEO~~stock ~~and~~may ~~CFO,~~be ~~of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as the end of the period covered by this quarterly report~~delisted. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures are effective as at end of the period covered by this quarterly report.

~~Changes~~In inOctober ~~Internal~~2011, ~~Control~~the ~~over~~Company ~~Financial~~announced ~~Reporting~~that it received a letter from The NASDAQ Stock Market (“NASDAQ”), dated October 24, 2011, notifying it that, for the 30 consecutive business days preceding the date of the letter, the bid price of the Company's common stock had closed below the $1.00 per share minimum bid price required for continued inclusion on The NASDAQ Global Market. To regain compliance with The NASDAQ Global Market continued listing requirements, the closing bid price of the Company's common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days. The Company was granted until April 23, 2012 to regain compliance. In anticipation of not meeting the minimum bid price continued listing requirement, the Company requested, and on April 17, 2012 received, approval from NASDAQ to transfer the listing of its common stock from The NASDAQ Global Market to The NASDAQ Capital Market. The Company will be afforded an additional period, ending October 22, 2012, to regain compliance with the minimum bid price rule while listed on The NASDAQ Capital Market. If compliance is not regained, NASDAQ will notify the Company of its determination to delist the Company's common stock, which decision may be appealed to a NASDAQ Listing Qualifications Panel. In order to be afforded the additional 180-day compliance period, the Company was required to provide NASDAQ written notice of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary. At the Company’s annual meeting of stockholders held on June 12, 2012, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse split of the Company’s common stock at the discretion of the Board of Directors at a ratio not less than 1-for-2 and not more than 1-for-15.

~~During~~There can be no assurance that a reverse split will be sufficient to enable the ~~first~~Company ~~three~~to ~~months~~maintain ofits ~~fiscal~~listing ~~2012~~on the NASDAQ Capital Market. If our common stock were delisted from The NASDAQ Capital Market, ~~there~~our ~~has~~common ~~been~~stock nothen ~~change~~would inbe eligible for quotation on the ~~Company’s~~Over-The-Counter ~~internal~~(OTC) ~~control~~Bulletin Board maintained by NASDAQ, on another over-the-counter ~~financial~~quotation ~~reporting~~system or on the “pink sheets.” If that ~~has~~occurs, the liquidity and marketability of shares of our common stock would decrease our results of operations and financial condition could materially ~~affected~~adversely impact our results of operations and financial condition. As a result of a delisting, an investor might find it more difficult to dispose of, or isto ~~reasonably~~obtain ~~likely~~accurate quotations as to ~~materially~~the ~~affect~~market value of our common stock. Such delisting and continued and further declines in the market price of our common stock also could greatly impair our ability to raise additional financing, if needed, through equity or debt financing and could significantly increase the ~~Company’s~~ownership ~~internal~~dilution ~~control~~to ~~over~~stockholders caused by our issuing equity in financing or other transactions. A delisting could also materially adversely impact our results of operations and financial ~~reporting~~condition.

- 3220 -

~~PART~~Item ~~II OTHER~~6. ~~INFORMATION~~Exhibits

Item 1A. Risk Factors


Exhibit No.	Description
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

This Form 10-Q should be read together with the “RISK FACTORS” section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the U.S. Securities and Exchange Commission (“SEC”), which describe various risks and uncertainties to which we are or may become subject, and is supplemented by the discussion below. These risks and uncertainties could, directly or indirectly, adversely affect our business, financial condition, results of operations, cash flows, strategies and/or prospects.*

IfPursuant weto doRegulation S-T, this interactive data file is deemed not ~~meet~~filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the ~~NASDAQ~~Securities ~~Stock~~Act ~~Market~~of ~~continued~~1933, ~~listing~~is ~~requirements~~deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, ~~our~~and ~~common~~otherwise ~~stock~~is ~~may~~not besubject ~~delisted~~to liability under these sections.

In October 2011, the Company announced that it received a letter from The NASDAQ Stock Market (“NASDAQ”), dated October 24, 2011, notifying it that, for the 30 consecutive business days preceding the date of the letter, the bid price of the Company's common stock had closed below the $1.00 per share minimum bid price required for continued inclusion on The NASDAQ Global Market. To regain compliance with The NASDAQ Global Market continued listing requirements, the closing bid price of the Company's common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days. The Company was granted until April 23, 2012 to regain compliance. In anticipation of not meeting the minimum bid price continued listing requirement, the Company requested, and on April 17, 2012 received, approval from NASDAQ to transfer the listing of its common stock from The NASDAQ Global Market to The NASDAQ Capital Market. The Company will be afforded an additional period, ending October 22, 2012, to regain compliance with the minimum bid price rule while listed on The NASDAQ Capital Market. If compliance is not regained, NASDAQ will notify the Company of its determination to delist the Company's common stock, which decision may be appealed to a NASDAQ Listing Qualifications Panel. In order to be afforded the additional 180-~~day~~ ~~compliance~~21 period, the Company was required to provide NASDAQ written notice of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary. At the Company’s annual meeting of stockholders scheduled to be held on June 12, 2012, the Company intends to present to stockholders a proposal, as detailed in definitive proxy materials for the annual meeting filed by the Company with the Securities and Exchange Commission on April 25, 2012, to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to effect a reverse split of the Company’s common stock at the discretion of the Board of Directors at a ratio not less than 1-~~for-2 and not more than 1-for-15.~~

There can be no assurance that stockholders will approve the proposal to effect a reverse split or that if such proposal is approved and implemented by the Board of Directors that such a reverse stock split will be sufficient to enable the Company to maintain its listing on the NASDAQ Capital Market. If our common stock were delisted from The NASDAQ Capital MarketPRESSTEK, ~~our common stock then would be eligible for quotation on the Over-The-Counter (OTC) Bulletin Board maintained by NASDAQ, on another over-the-counter quotation system or on the “pink sheets~~INC.” If that occurs, the liquidity and marketability of shares of our common stock would decrease our results of operations and financial condition could materially adversely impact our results of operations and financial condition. As a result of a delisting, an investor might find it more difficult to dispose of, or to obtain accurate quotations as to the market value of our common stock. Such delisting and continued and further declines in the market price of our common stock also could greatly impair our ability to raise additional financing, if needed, through equity or debt financing and could significantly increase the ownership dilution to stockholders caused by our issuing equity in financing or other transactions. A delisting could also materially adversely impact our results of operations and financial condition.

~~- 33 -~~SIGNATURES

~~Item~~Pursuant 6to 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. ~~Exhibits~~

Exhibit No.		Description
	PRESSTEK, INC. (Registrant)
	31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
August 10, 2012	/s/ Arnon Dror
	31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	Arnon Dror Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer)
	32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document.*
101.SCH		XBRL Taxonomy Extension Schema Document.*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.*
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.*

* Pursuant to Regulation S-T, ~~this~~22 interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.-

- 34 -

PRESSTEK, INC.

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.

	PRESSTEK, INC. (Registrant)
Date: May 15, 2012	/s/ Arnon Dror
	Arnon Dror Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer)

- 35 -

PRESSTEK, INC.

EXHIBIT INDEX

Exhibit No.		Description
	31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document.*
101.SCH		XBRL Taxonomy Extension Schema Document.*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.*
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.*

* Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

- 36 -

Filing Compare · PRESSTEK INC /DE/