Gigante Salmon Annual Report 2009

FY2009 Annual Report · Gigante Salmon

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Corporate Profile

For the fiscal year ended March 28th, 2009 Giga-tronics has three main product lines comprised
of high performance microwave test equipment, standard and customized switching solutions, and
custom designed microwave YIG oscillators, YIG filters and hybrid components. Our general purpose
test business focuses on the military and aerospace industries as well as specific niches within the
semiconductor test, wireless infrastructure, and handset manufacturing segments of commercial com-
munications. Our switching solution business primarily serves the military market for automatic test
equipment (ATE) used in the maintenance and support of fielded weapon systems. And our custom
microwave components are designed for operational use within specific military programs or as OEM
for other manufacturers.

Giga-tronics sells its products through an indirect sales channel within the US and through distributors
internationally. During fiscal 2009, the Company has added an element of direct selling to its switch-
ing and component businesses to augment the existing indirect channel for these products. The
Company employs approximately 100 people and designs and manufactures its products exclusively
in San Ramon and Santa Rosa California.

Our general purpose test product line consists of high performance microwave synthesizers, power
meters, high power amplifiers, and low cost USB sensors. These products are available in both
bench and modular form factors and are used by engineers in the design of new products, on the
production line for test and calibration of new products, and in the field for maintenance and re-cali-
bration of antennas, electronic systems, and equipment.

Our switching products provide the ATE engineer with a method of routing signals with high integrity
between the specific device under test and the general purpose test equipment within the automated
system. Switch products are available to switch voltage, current, radio frequency signals, and imped-
ances and are generally modular in nature, although bench form factors are available for microwave
applications.

Our component business leverages our vertical integration in high performance instruments by mak-
ing our IP and design expertise available to outside firms interested in outsourcing R&D or for situa-
tions where our knowledge of YIG technology and frequency synthesis can solve specific problems in
signal generation or signal interference.

Users of Giga-tronics products include Lockheed Martin, Northrop Grumman, BAE, Raytheon, Boe-
ing, the US Armed Services, the FAA, Motorola, LTX, Nokia, and Cisco in the US. Internationally,
Giga-tronics serves the MODs and Government Institutes around the world, as well as, commercial
wireless communication companies worldwide.

To Our Shareholders,

Fiscal 2009 was a pivotal year for Giga-tronics. The Company entered the year with new
products in the pipeline, a streamlined organization with better developed cross-functional skills
and business planning practices, yet with a leadership team still working through newly defined
roles, and a minimal backlog of shippable orders. The low beginning backlog coupled with soft
bookings in our 1st half set us uncomfortably back in profitability and cash reserves forcing us to
draw on our line of credit for the first time. However, by mid-year we had filled in the
remaining gaps in the management team and began to experience a pickup in bookings
throughout our 2nd half.

We strengthened the sales and marketing team, adding new personnel in the field and at the
Company’s headquarters. We also opened an office in China staffed with a local individual
providing customer and sales channel support. We held our costs in line by reducing variances
and we managed our cash reserves paying back our loan by the end of the 3rd quarter. This
combination of solid execution helped us grow our top line revenue by 43% in the 2nd half of the
year as compared to the 1st half and drove the 2nd half into profitability. Although we were
unable to overcome the losses generated in our first half, I’m very pleased that we have been able
to return the Company to profitability in this very challenging environment.

During this past year we introduced a new broadband 10 Watt power amplifier, the first of its
kind. We also introduced our GT2620A high power synthesizer based upon our GT2400B and
GT2500A models along with a family of USB Power Sensors that plug directly into a PC. And
we recently upgraded the entire synthesizer line with many improved features including new
frequency coverage up to 50 GHz.

Backlog continued to grow for Microsource’s high performance specialty filters based upon our
fast-switching YIG technology and we are under contract to design a new version that positions
the Company for continuous volume production over the next 5 years.

In our switching solution business, we are poised to introduce a new low cost chassis that adds
Ethernet and USB interfaces to the choices currently available and which allows existing
customers to preserve their investment in switch-cards.

Although there are still areas for improvement, many of the fundamental operating challenges
we’ve faced are behind us. This relieves some of the immediate pressures on the management
team and allows us to focus attention on new markets for driving the Company’s future growth.
As we move forward, we will be devoting considerable management attention to defining
strategy and identifying markets where we have a clear competitive advantage.

Looking ahead to fiscal 2010, Giga-tronics is well positioned to continue its positive trajectory.
To begin with, we are entering the new fiscal year with $2.2M more in backlog shippable within
one year than we entered fiscal 2009. Although much will depend upon the economy, this
additional backlog improves the base upon which to build growth. Second, as part of our
synthesizer upgrade, we have standardized the design around a set of common sub-assemblies
which will allow us to achieve further cost reductions in the coming year. Third, we have
embarked on growing our customer funded engineering projects that help us contain our
expenses while allowing us to retain our engineering talent during these uncertain times. Fourth,
our senior management team is in place at the beginning of the year and their efforts will be
reflected over the entire 12 months. And finally, we will take advantage of opportunities to
further streamline the Company as they arise.

Overall, I’m optimistic about the Company’s prospects for fiscal 2010 and I look forward to
updating you throughout the coming year.

Sincerely,

John Regazzi
Chief Executive Officer

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-K

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended March 28, 2009 ,

[

]

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

For the transition period from _____________ to _____________.

Commission File No. 0-12719

GIGA-TRONICS INCORPORATED
(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction of incorporation or organization)

94-2656341
(I.R.S. Employer Identification No.)

4650 Norris Canyon Road, San Ramon, CA
(Address of principal executive offices)

94583
(Zip Code)

Registrant’s telephone number, including area code: (925) 328-4650

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

Title of each class
Common Stock, No par value

Name of each exchange on which registered
The NASDAQ Stock Market LLC

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [ X ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes [ ] No [ X ]

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 [ X ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

[ X ]

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

Large accelerated filer

[ ]

Accelerated filer

[ ]

Non-accelerated filer
[ ]
(Do not check if a smaller reporting company)

Smaller reporting company

[ X ]

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

Yes [ ] No [ X ]

The aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant computed by
reference to the price at which the common equity was sold or the average bid and asked prices as of September 27, 2008
was $3,659,114.

There were a total of 4,824,021 shares of the Registrant’s Common Stock outstanding as of May 14, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents have been incorporated by reference into the parts indicated:

PART OF FORM 10-K
PART III

DOCUMENT
Registrant’s PROXY STATEMENT for its 2009 Annual Meeting of Shareholders to
be filed no later than 120 days after the close of the fiscal year ended March 28, 2009.

PART I

Page

TABLE OF CONTENTS

Item 1.
Item 1A
Item 1B.
Item 2.
Item 3.
Item 4.

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Submission Of Matters To A Vote Of Security Holders

PART II

Item 5.

Market For Common Equity, Related Shareholder Matters and Issuer Repurchases of Equity

Securities

Item 6.
Item 7.
Item 7A.
Item 8.

Selected Financial Data
Management’s Discussion and Analysis Of Financial Condition and Results Of Operation
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data

Consolidated Balance Sheets as of March 28, 2009 and March 29, 2008
Consolidated Statements of Operations for the years ended March 28, 2009 and

March 29, 2008

Consolidated Statements of Shareholders’ Equity for the years ended March 28, 2009

and March 29, 2008

Consolidated Statements of Cash Flows for the years ended March 28, 2009 and

March 29, 2008

Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm

Item 9.
Item 9A.
Item 9B.

Changes In and Disagreements With Accountants On Accounting and Financial Disclosure
Controls and Procedures
Other Information

PART III

Item 10.
Item 11.
Item 12.

Item 13.
Item 14.

PART IV

Directors, Executive Officers, and Corporate Governance
Executive Compensation
Security Ownership Of Certain Beneficial Owners and Management and Related

Shareholder Matters

Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

Item 15.

Exhibits And Financial Statements Schedules

SIGNATURES

Exhibit 21
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

Significant Subsidiaries
Consent of Independent Registered Public Accounting Firm
CEO Certifications Under Section 302 of the Sarbanes-Oxley Act of 2002
CFO Certifications Under Section 302 of the Sarbanes-Oxley Act of 2002
CEO Certifications Under Section 906 of the Sarbanes-Oxley Act of 2002
CFO Certifications Under Section 906 of the Sarbanes-Oxley Act of 2002

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PART 1

The forward-looking statements included in this report including, without limitation, statements containing the words
“believes”, “anticipates”, “estimates”, “expects”, “intends” and words of similar import, which reflect management’s best
judgment based on factors currently known, involve risks and uncertainties. Actual results could differ materially from
those anticipated in these forward-looking statements as a result of a number of factors, including but not limited to those
discussed under “Certain Factors Which May Adversely Affect Future Operations Or An Investment In Giga-tronics” in
Item 1 below and in Item 7, “Management’s Discussion and Analysis”.

ITEM 1. BUSINESS

General

Giga-tronics Incorporated (Giga-tronics, or the Company) includes the operations of the Giga-tronics Division and
Microsource Inc. (Microsource), a wholly owned subsidiary. Giga-tronics Division designs, manufactures and markets a
broad line of test and measurement equipment used in the development, test and maintenance of wireless communications
products and systems, flight navigational equipment, electronic defense systems and automatic testing systems. These
products are used primarily in the design, production, repair and maintenance of commercial telecommunications, radar,
and electronic warfare equipment.

Giga-tronics was incorporated on March 5, 1980. Its principal executive offices are located at 4650 Norris Canyon Road,
San Ramon, California, and its telephone number at that location is (925) 328-4650.

Effective July 23, 1996, Giga-tronics acquired ASCOR. ASCOR offers a family of switching and interface test adapters as
standard VXI configured products, as well as complete system integration services to the Automatic Test Equipment
market. Effective April 1, 2007, all ASCOR operations are conducted out of the San Ramon, California facility. Effective
April 1, 2008, the ASCOR subsidiary was dissolved. The ASCOR product line continues to be manufactured under the
Giga-tronics subsidiary. Its Fremont, California facility of approximately 18,700 square feet is available for sub-lease until
June 30, 2009 after which the lease will expire.

Effective May 18, 1998, Giga-tronics acquired Microsource. Microsource, located in Santa Rosa, California, develops and
manufactures a broad line of YIG (Yttrium, Iron, Garnet) tuned oscillators, filters and microwave synthesizers, which are
used by its customers in operational applications and in manufacturing a wide variety of microwave instruments and
devices.

Giga-tronics intends to broaden its product lines and expand its market, both by internal development of new products and
through the acquisition of other business entities. From time to time, the Company considers a variety of acquisition
opportunities.

Industry Segments

The Company manufactures products used in test, measurement and control. The Company has two reporting segments:
Giga-tronics Division and Microsource.

Products and Markets

Giga-tronics

The Giga-tronics Division produces signal sources, generators and sweepers, and power measurement instruments for use
in the microwave and radio frequency (RF) range (10 kilohertz (kHz) to 50 gigahertz (GHz)). Within each product line are
a number of different models and options allowing customers to select frequency range and specialized capabilities,
features and functions. The end-user markets for these products can be divided into three broad segments: commercial
telecommunications, radar and electronic warfare. These instruments are used in the design, production, repair and
maintenance and calibration of other manufacturers’ products, from discrete components to complex systems.

The Giga-tronics Division also produces switch modules and interface adapters that operate with a bandwidth from direct
current (DC) to optical frequencies. These switch modules may be incorporated within its customers’ automated test
equipment. The end-user markets for these products are primarily related to defense, aeronautics, communications, satellite
and electronic warfare.

Microsource

The Microsource segment develops and manufactures a broad line of YIG tuned oscillators, filters and microwave
synthesizers, which are used by its customers in operational applications and in manufacturing a wide variety of microwave
instruments or devices.

Sources and Availability of Raw Materials and Components

Substantially all of the components required by Giga-tronics to make its assemblies are available from more than one
source. The Company occasionally uses sole source arrangements to obtain leading-edge technology or favorable pricing
or supply terms, but not in any material volume. In the Company’s opinion, the loss of any sole source arrangement it has
would not be material to its operations.

Although extended delays in receipt of components from its suppliers could result in longer product delivery schedules for
the Company, the Company believes that its protection against this possibility stems from its practice of dealing with well-
established suppliers and maintaining good relationships with such suppliers.

Patents and Licenses

The Company’s competitive position is largely dependent upon its ability to provide performance specifications for its
instruments and systems that (a) easily, effectively and reliably meet customers’ needs and (b) selectively surpass
competitors’ specifications in competing products. Patents may occasionally provide some short-term protection of
proprietary designs. However, because of the rapid progress of technological development in the Company’s industry, such
protection is most often, although not always, short-lived. Therefore, although the Company occasionally pursues patent
coverage, it places major emphasis on the development of new products with superior performance specifications and the
upgrading of existing products toward this same end. This is reflected in a substantial allocation of budget to project
development costs.

The Company’s products are based on its own designs, which in turn derive from its own engineering abilities. If the
Company’s new product engineering efforts fall behind, its competitive position weakens. Conversely, effective product
development greatly enhances its competitive status.

The Company presently holds 25 patents. Some of these are critical to the Company’s ongoing business, and the Company
intends to actively maintain them. Capitalized costs relating to these patents were both incurred and fully amortized prior
to March 1, 2003. Accordingly, these patents have no recorded value included in the Company’s fiscal 2009 and 2008
consolidated financial statements.

The Company is not dependent on trademarks, licenses or franchises. It does utilize certain software licenses in certain
functional aspects for some of its products. Such licenses are readily available, non-exclusive and are obtained at either no
cost or for a relatively small fee.

Seasonal Nature of Business

The business of the Company is not seasonal.

Working Capital Practices

The Company generally strives to maintain at least 60 days of inventory and generally sells to customers on 30-day
payment terms. Typically, the Company receives payment terms of 30 days. The Company believes that these practices
are consistent with typical industry practices.

Importance of Limited Number of Customers

The Company is a leading supplier of microwave and RF test instruments to various United States (U.S.) government
defense agencies, as well as to their prime contractors. Management anticipates sales to U.S. government agencies and
their prime contractors will remain significant in fiscal 2010. U.S. and international defense-related agencies accounted for
64% and 62% of net sales in fiscal 2009 and 2008, respectively. Commercial business accounted for the remaining 36%
and 38% of net sales in fiscal 2009 and 2008, respectively. Prior to the last five years, in which the defense business has
improved, sales to the defense industry in general and direct sales to the U.S. and foreign government agencies in particular
had declined. Any decline of defense orders could have a negative effect on the business, operating results, financial
condition and cash flows of Giga-tronics.

During fiscal 2009, Giga-tronics Division derived 55% of its net sales from the U.S. government defense agencies and their
prime subcontractors. During fiscal 2008, Giga-tronics Division derived 45% of its net sales from the U.S. government
defense agencies and their prime subcontractors.

During fiscal 2009, Microsource derived 18% of its net sales from an electronic instrument manufacturer and 72% of its net
sales from the U.S. government defense agencies and their prime contractors. During fiscal 2008, Microsource derived
41% of its net sales from an electronic instrument manufacturer and 42% of its net sales from the U.S. government defense
agencies and their prime contractors and another 12% from foreign defense agencies and their prime contractors.

Other than U.S. government agencies and their defense contractors, no other customer accounted for 10% or more of
consolidated net sales of the Company in fiscal 2009 or 2008.

In management’s opinion, other than U.S. government agencies and their prime contractors, the Company has no customers
where the loss of which would have a material adverse effect on the Company and its subsidiaries as a whole.

The Company’s products are largely capital investments for its customers, and the Company’s belief is that its customers
have economic cycles in which capital investment budgets for the kinds of products that the Company produces expand and
contract. The Company, therefore, expects that a major customer in one year will often not be a major customer in the
following year. Accordingly, the Company’s net sales and earnings will decline if the Company is unable to find new
customers or increase its business with other existing customers to replace declining net sales from the previous year’s
major customers. A substantial decline in net sales from U.S. government defense agencies and their prime contractors
would also have a material adverse effect on the Company’s net sales and results of operations unless replaced by net sales
from the commercial sector.

Backlog of Orders

On March 28, 2009, the Company’s backlog of unfilled order was approximately $9,105,000 compared to approximately
$7,582,000 at March 29, 2008. As of March 28, 2009, there were approximately $2,295,000 in unfilled orders that were
scheduled for shipment beyond one year, as compared to approximately $2,924,000 at March 29, 2008. Orders for the
Company’s products include program orders from both the U.S. government and defense contractors with extended
delivery dates. Accordingly, the backlog of orders may vary substantially from quarter to quarter and the backlog entering
any single quarter may not be indicative of sales for any period.

Backlog includes only those customer orders for which a delivery schedule has been agreed upon between the Company
and the customer and, in the case of U.S. government orders, for which funding has been appropriated.

Competition

Giga-tronics serves the broad market for electronic instrumentation with applications ranging from the design, test,
calibration and maintenance of other electronic devices to providing sophisticated components for complex electronic
systems to sub-systems capable of sorting and identifying high frequency communication signals. These applications cut
across the commercial, industrial and military segments of the broad market. The Company has a variety of competitors.
Several of its competitors are much larger than the Company and have greater resources and substantially broader product
lines. Others are of comparable size with more limited product lines.

Competition from numerous existing companies is intense and potential new entrants are expected to increase. The
Company’s instrument, switch, oscillator and synthesizer products compete with Agilent, Anritsu, EADS, Aeroflex and
Rohde & Schwarz. Many of these companies have substantially greater research and development, manufacturing,
marketing, financial, technological, personnel and managerial resources than Giga-tronics. There can be no assurance that
any products developed by these competitors will not gain greater market acceptance than any developed by Giga-tronics.

To compete effectively in this circumstance, the Company (a) places strong emphasis on maintaining a high degree of
technical competence as it relates to the development of new products and the upgrading of existing products and (b) is
highly selective in establishing technological objectives. The Company does not attempt to compete ‘across the board’, but
selectively based upon its particular strengths and the competitors’ perceived limitations.

Specification requirements of customers in this market vary widely. The Company is able to compete by offering products
that meet a customer’s particular specification requirements; by being able to offer certain product specifications at lower
cost resulting from the Company’s past production of products with those of similar specifications; and by being able to
offer certain product specifications at a higher quality level. All of these advantages are attributable to the Company’s
continuing investment in research and development and in a highly trained engineering staff.

The customer’s decision is most often based on the best match of its particular requirements and the supplier’s operating
specifications. In most cases, attracting and retaining customers does not require the Company to offer the best overall
product with respect to each of the customer’s requirements, but rather the best product relative to the specifications that are
most important to the customer.

When the opportunity involves custom solutions, price is not the only consideration. Satisfying the customer’s specific
requirements becomes more important and the Company believes it has more flexibility in making modifications and
enhancements than its larger and more structured competitors.

Sales and Marketing

Giga-tronics and Microsource market their products through various independent distributors and representatives to
commercial and government customers, although not necessarily through the same distributors and representatives.

Product Development

Products of the type manufactured by Giga-tronics historically have had relatively long product life cycles. However, the
electronics industry is subject to rapid technological changes at the component level. The future success of the Company is
dependent on its ability to steadily incorporate advancements in component technologies into its new products. In fiscal
2009, product development expenses totaled approximately $1,975,000 excluding non-recurring engineering (NRE) costs.
In fiscal 2008, product development expenses were $2,248,000.

Activities included the development of new products and the improvement of existing products. It is management’s
intention to maintain product development at levels required to sustain its competitive position. All of the Company’s
product development activities are internally funded and expensed as incurred.

Giga-tronics expects to continue to make significant investments in research and development. There can be no assurance
that future technologies, processes or product developments will not render Giga-tronics’ current product offerings obsolete
or that Giga-tronics will be able to develop and introduce new products or enhancements to existing products that satisfy
customer need, in a timely manner or achieve market acceptance. The failure to do so could adversely affect Giga-tronics’
business.

Manufacturing

The assembly and testing of Giga-tronics Division microwave, RF and power measurement products and its switching and
connecting devices are done at its San Ramon facility. The assembly and testing of Microsource’s line of YIG tuned
oscillators, filters and microwave synthesizers are done at its Santa Rosa facility.

Environment

To the best of its knowledge, the Company is in compliance with all Federal, state and local laws and regulations involving
the protection of the environment.

Employees

As of March 28, 2009, Giga-tronics employed 97 individuals on a full-time basis. Management believes that the future
success of the Company depends on its ability to attract and retain skilled personnel. None of the Company’s employees
are represented by a labor union, and the Company considers its employee relations to be good.

Information about Foreign Operations

The Company sells to its international customers through a network of foreign technical sales representative organizations.
All transactions between the Company and its international customers are in U.S. dollars.

Geographic Distribution of Net Sales
(Dollars in thousands)
Domestic
International
Total

2009
13,490
3,931
$ 17,421

2008
$ 11,348
6,983
$ 18,331

% of total

2009

2008
77.0% 62.0%
23.0% 38.0%

See footnote 5 of the financial statements for further breakdown of international sales for the last two years.

The Company maintains a sales office in China, but does not have material amounts of identifiable assets in foreign
countries. Its gross margins on foreign and domestic sales are similar.

ITEM 1A. RISK FACTORS

Business climate is volatile

The current financial crisis/recession represents a new risk for the Company and has resulted in delays of orders and/or
cancellations. Giga-tronics has a significant number of defense-related orders. If the defense market demand decreases,
actual shipments could be less than projected shipments with a resulting decline in sales. The Company’s commercial
product backlog has a number of risks and uncertainties such as the cancellation or deferral of orders, dispute over
performance and the Company’s ability to collect amounts due under these orders. If any of these events occurs, actual
shipments could be less than projected shipments and earnings could decline.

Giga-tronics sales are substantially dependent on the wireless industry

Giga-tronics sells directly or indirectly to customers and equipment manufacturers in the wireless industry. Currently, this
industry is undergoing dramatic and rapid change. As such, the business that Giga-tronics records could decrease or
existing recorded backlog could be stretched or deferred resulting in less than projected shipments. Reduced shipments
may have a material adverse effect on operations.

Giga-tronics’ markets involve rapidly changing technology and standards

The market for electronics equipment is characterized by rapidly changing technology and evolving industry standards.
Giga-tronics believes that its future success will depend in part upon its ability to develop and commercialize its existing
products, develop new products and applications, and in part to develop, manufacture and successfully introduce new
products and product lines with improved capabilities and to continue to enhance existing products. There can be no
assurance that Giga-tronics will successfully complete the development of current or future products or that such products
will achieve market acceptance.

Future liquidity is uncertain

Based on current levels of sales and expenses, management believes that cash and cash equivalents remain adequate to meet
current operating needs for the next twelve months. However, this estimate is based on projections that may or may not be
realized, and therefore actual cash usage could be greater than projected. To operate beyond for the next twelve months
would require the Company to earn additional cash from operations, renew or obtain a line of credit or obtain additional
funds from other sources. The Company maintains a line of credit for $2,500,000. The Company borrowed $500,000 in the
third quarter of fiscal 2009, but repaid it prior to December 27, 2008.

Giga-tronics’ common stock price is volatile

The market price of the Company’s common stock could be subject to significant fluctuations in response to variations in
quarterly operating results, shortfalls in revenues or earnings from levels expected by securities analysts and other factors
such as announcements of technological innovations or new products by Giga-tronics or by competitors, government
regulations or developments in patent or other proprietary rights. In addition, the NASDAQ Capital Market and other stock
markets have experienced significant price fluctuations in recent periods. Some of these fluctuations often have been
unrelated to the reported operating performance of the specific companies whose stocks are traded. Broad market
fluctuations, as well as general foreign and domestic economic conditions, may adversely affect the market price of the
common stock.

Giga-tronics stock at any time has historically traded on thin volume on NASDAQ. Sales of a significant volume of stock
could result in a decline of Giga-tronics’ share price.

Performance problems in Giga-tronics’ products or problems arising from the use of its products together with
other vendors’ products may harm its business and reputation

Products as complex as those Giga-tronics produces may contain unknown and undetected defects or performance
problems. For example, it is possible that a product might not comply with stipulated specifications under all
circumstances. In addition, Giga-tronics’ customers generally use its products together with their own products and
products from other vendors. As a result, when problems occur in a combined environment, it may be difficult to identify
the source of the problem. A defect or performance problem could result in lost revenues, increased warranty costs,
diversion of engineering and management time and effort, impaired customer relationships and injury to Giga-tronics’
reputation generally. To date, performance problems in Giga-tronics’ products or in other products used together with
Giga-tronics’ products have not had a material adverse effect on its business. However, management cannot be certain that
a material adverse impact will not occur in the future.

Giga-tronics competition has greater resources

The Company’s instrument, switch, oscillator and synthesizer products compete with Agilent, Anritsu, EADS, Aeroflex
and Rohde & Schwarz. Many of these companies have substantially greater research and development, manufacturing,
marketing, financial, technological, personnel and managerial resources than Giga-tronics. These resources also make
these competitors better able to withstand difficult market conditions than the Company. There can be no assurance that
any products developed by the competitors will not gain greater market acceptance than any developed by Giga-tronics.

Giga-tronics acquisitions may not be effectively integrated and their integration may be costly

As part of its business strategy, Giga-tronics may broaden its product lines and expand its markets, in part through the
acquisition of other business entities. Giga-tronics is subject to various risks in connection with any future acquisitions.
Such risks include, among other things, the difficulty of assimilating the operations and personnel of the acquired
companies, the potential disruption of the Company’s business, the inability of management to maximize the financial and
strategic position of the Company by the successful incorporation of acquired technology and rights into its product
offerings, the maintenance of uniform standards, controls, procedures and policies, and the potential loss of key employees
of acquired companies. The Company has not made any acquisitions in the past nine years. No assurance can be given that
any acquisition by Giga-tronics will or will not occur, that if an acquisition does occur, that it will not materially harm the
Company or that any such acquisition will be successful in enhancing the Company’s business. The Company currently
contemplates that future acquisitions may involve the issuance of additional shares of common stock. Any such issuance
may result in dilution to all Giga-tronics’ shareholders, and sales of such shares in significant volume by the shareholders of
acquired companies may depress the price of its common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

As of March 28, 2009, Giga-tronics’ principal executive office and the marketing, sales and engineering offices and
manufacturing facilities for its microwave and RF signal generator and power measurement products are located in
approximately 47,300 squire feet in San Ramon, California, which the Company occupies under a lease agreement expiring
December 31, 2011.

The property located in Fremont, California with approximately 18,700 square feet was previously occupied by ASCOR
under a lease that expires on June 30, 2009. The Company effectively vacated this property as a part of its restructuring
plan as of March 31, 2007. The Company moved ASCOR’s engineering, sales and marketing, and administrative activities
to the San Ramon, California facility effective April 1, 2007. The Company has an accrued loss of approximately $86,276
for future lease expense. As of March 28, 2009, the Company has not sub-leased the available space.

Microsource’s manufacturing facilities for its YIG tuned oscillators, filters and microwave synthesizers are located in an
approximately 33,400 square foot facility in Santa Rosa, California, which it occupies under a lease expiring May 31, 2013.

The Company believes that its facilities are adequate for its business activities.

ITEM 3. LEGAL PROCEEDINGS

As of March 28, 2009, the Company has no material pending legal proceedings. From time to time, Giga-tronics is
involved in various disputes and litigation matters that arise in the ordinary course of business.

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

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended March 28, 2009.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND
ISSUER REPURCHASES OF EQUITY SECURITIES

Common Stock Market Prices

Giga-tronics’ common stock is traded on the NASDAQ Capital Market (formerly the NASDAQ Small Cap Market) using
the symbol ‘GIGA’. The number of record holders of the Company’s common stock as of March 28, 2009 was
approximately 1,600. The table below shows the high and low closing bid quotations for the common stock during the
indicated fiscal periods. These quotations reflect inter-dealer prices without retain mark-ups, mark-downs, or commission
and may not reflect actual transactions.

First Quarter
Second Quarter
Third Quarter
Fourth Quarter

2009
(3/30 - 6/28)
(6/29 - 9/27)
(9/28 - 12/27)
(12/28 - 3/28)

High
$1.80
1.25
1.00
1.21

Low
$1.26
0.80
0.50
0.55

2008
(4/1 - 6/30)
(7/1 - 9/29)
(9/30 - 12/29)
(12/30 - 3/29)

High
$2.22
2.36
3.85
1.87

Low
$1.61
1.62
1.71
1.27

Giga-tronics has not paid cash dividends in the past and has no plans to do so in the future, based upon its belief that the
best use of its available capital is in the enhancement of its product position.

Giga-tronics has not issued any unregistered securities or repurchased any of its securities during the past fiscal year.

Equity Compensation Plan Information

The following table provides information on options and other equity rights outstanding and available at March 28, 2009.

Equity Compensation Plan Information

No. of securities to
be issued upon
exercise of
outstanding option,
warrants and rights
(a)

Weighted average
exercise price of
outstanding
option, warrants
and rights
(b)

No. of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected in
column (a))
(c)

Plan Category
Equity compensation plans approved

by security holders

770,900

$1.9015

Equity compensation plans not approved

by security holders

Total

Issuer Repurchases

n/a
770,900

n/a
$1.9015

529,975

n/a
529,975

The Company did not repurchase any of its equity securities during the fiscal year ended March 28, 2009.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data for the Company’s last five fiscal years. This information is derived
from the Company’s audited consolidated financial statements, unless otherwise stated. This data should be read in
conjunction with the consolidated financial statements, related notes, and other financial information included elsewhere in
this report.

SELECTED CONSOLIDATED FINANCIAL DATA

Summary of Operations:
(In thousands except per share data)
Net sales
Gross profit
Operating expenses
Interest income, net
Per-tax (loss) income from continuing

operations

Provision for income taxes
(Loss) income from continuing operations
Income (loss) on discontinued operations,

Years Ended
March 28, 2009 March 29, 2008 March 31, 2007 March 25, 2006 March 26, 2005
$ 21,477
$ 17,421
9,598
7,504
8,760
7,914
-
7

$ 20,620
8,300
9,316
32

$ 18,048
7,546
9,548
108

$ 18,331
7,748
7,939
36

(403)
2
(405)

(201)
2
(203)

(1,894)
1
(1,895)

(984)
4
(988)

849
4
845

net of income taxes

Net (loss) income

75
$ (330)

(31)
$ (234)

28
$ (1,867)

27
$ (961)

(233)
$ 612

Basic (loss) earnings per share:
From continuing operations
On discontinued operations
Net (loss) earnings per share - basic

Diluted (loss) earnings per share:
From continuing operations
On discontinued operations
Net (loss) earnings per share - diluted

$ (0.08)
0.01
$ (0.07)

$ (0.04)
(0.01)
$ (0.05)

$ (0.40)
0.01
$ (0.39)

$ (0.21)
0.01
$ (0.20)

$ 0.18
(0.05)
$ 0.13

$ (0.08)
0.01
$ (0.07)

$ (0.04)
(0.01)
$ (0.05)

$ (0.40)
0.01
$ (0.39)

$ (0.21)
0.01
$ (0.20)

$ 0.18
(0.05)
$ 0.13

Shares of common stock - basic
Shares of common stock - diluted

4,824
4,824

4,813
4,813

4,809
4,809

4,782
4,782

4,725
4,741

Financial Position:
(In thousands except per share data)
Current ratio
Working Capital
Total assets
Shareholders' equity

Percentage Data:
(Percentage of net sales)
Gross profit
Operating expenses
Interest income, net
Per-tax (loss) income from continuing

Years Ended
March 28, 2009 March 29, 2008 March 31, 2007 March 25, 2006 March 26, 2005
4.29
3.14
$ 9,337
$ 7,131
$ 12,961
$ 10,467
$ 9,812
$ 7,332

3.93
$ 8,856
$ 12,346
$ 9,098

3.09
$ 7,280
$ 11,161
$ 7,393

3.68
$ 7,231
$ 10,361
$ 7,392

Years Ended
March 28, 2009 March 29, 2008 March 21, 2007 March 25, 2006 March 26, 2005
43.1% 42.3% 41.8% 40.3% 44.7%
45.4% 43.3% 52.9% 45.2% 40.8%
0.0% 0.2% 0.6% 0.1% 0.0%

operations

(2.3%)

(1.1%)

(10.5%)

(4.8%)

4.0%

Income (loss) on discontinued operations,

net of income taxes

Net (loss) income

0.4%
(1.9%)

(0.2%)
(1.3%)

0.2% 0.1%
(4.7%)

(10.3%)

(1.1%)
2.8%

SELECTED CONSOLIDATED FINANCIAL DATA

The following is a summary of unaudited results of operations for the fiscal years ended March 28, 2009 and March 29, 2008.

Quarterly Financial Information (Unaudited)
(In thousands except per share data)
Net sales
Gross profit
Operating expenses
Interest income, net
Per-tax (loss) income from continuing operations
Provision for income taxes
(Loss) income from continuing operations
Income on discontinued operations,

net of income taxes

Net (loss) income

Basic (loss) earnings per share:
From continuing operations
On discontinued operations
Net (loss) earnings per share - basic

Shares of common stock - basic
Shares of common stock - diluted

2009

First Second

Third Fourth

Year
$ 3,488 $ 3,689 $ 5,099 $ 5,145 $ 17,421
2,420
7,504
2,069
7,914
7
(403)
2
(405)

2,349
1,966
(2) -
383
-
383

1,397
1,920
3
(520)
2
(522)

1,338
1,959
6
(615)
-
(615)

349
-
349

-
$ (522) $ (540) $ 349

$ (0.11) $ (0.13) $ 0.07
-
$ (0.11) $ (0.11) $ 0.07

0.02

$ (0.11) $ (0.13) $ 0.07
-
$ (0.11) $ (0.11) $ 0.07

0.02

75
$ 383 $ (330)

$ 0.08 $ (0.08)
-
0.01
$ 0.08 $ (0.07)

4,824
4,824

Quarterly Financial Information (Unaudited)
(In thousands except per share data)
Net sales
Gross profit
Operating expenses
Interest income, net
Pre-tax income (loss) from continuing operations
Provision for income taxes
Income (loss) from continuing operations
Income (loss) on discontinued operations,

net of income taxes

Net income (loss)

Basic earnings (loss) per share:
From continuing operations
On discontinued operations
Net earnings (loss) per share - basic

Diluted earnings (loss) per share:
From continuing operations
On discontinued operations
Net earnings (loss) per share - diluted

Shares of common stock - basic
Shares of common stock - diluted

Second
First
$ 4,651
4,628
2,081
1,944
1,879
1,941
9
14
30
198
2 -
198
28

2008
Third
$ 4,953
2,049
1,974
6
51
-
51

Fourth
$ 4,009
1,674
2,145

Year
$ 18,331
7,748
7,939
7 36
(201)
2
(203)

(480)

64
(10)
$ 92 $ 188

(20)
31

(65)
$ (545)

(31)
$ (234)

$ 0.01
0.01

$ 0.04
(0.00)
$ 0.02 $ 0.04

$ 0.01
(0.00)
$ 0.01

$ (0.10)
(0.01)
$ (0.11)

$ (0.04)
(0.01)
$ (0.05)

$ 0.01
0.01

$ 0.04
(0.00)
$ 0.02 $ 0.04

$ 0.01
(0.00)
$ 0.01

$ (0.10)
(0.01)
$ (0.11)

$ (0.04)
(0.01)
$ (0.05)

4,809
4,863

4,810
4,880

4,814
4,913

4,818
4,818

4,813
4,813

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

Giga-tronics produces instruments, subsystems and sophisticated microwave components that have broad applications in
both defense electronics and wireless telecommunications. In 2009 Giga-tronics’ business consisted of two operating and
reporting segments: Giga-tronics Division and Microsource.

The Company’s business is highly dependent on government spending in the defense electronics sector and on the wireless
telecommunications market. Defense orders have improved on a year-to-date basis for fiscal 2009 versus fiscal 2008
whereas on a year-to-date basis, commercial orders are slightly down in fiscal 2009 versus fiscal 2008.

The Company continues to monitor costs, including reductions in personnel, facilities and other expenses, to more
appropriately align costs with revenues. In April 2007, the Company restored the prior salary reductions. In March 2007,
the Company moved ASCOR’s engineering, sales and marketing, and administrative activities to the San Ramon,
California facility, effectively vacating its Fremont, California facility. As a result, the Company has accrued its future
lease obligations through June 2009. Microsource sales and marketing and engineering activities were also consolidated
into the San Ramon facility to better integrate its component development activities with the Company’s overall new
product plans. The Microsource facility in Santa Rosa, California, however, remains open as a manufacturing operation.

Results of Operations

New orders by segment are as follows for the fiscal years ended:

New Orders

(Dollars in thousands)
Giga-tronics
Microsource
Total

2009
$ 11,599
7,399
$ 18,998

2008
$ 13,795
3,625
$ 17,420

2007
$ 13,067
3,091
$ 16,158

% change

2009
vs.
2008
(16%)
104%
9%

2008
vs.
2007
6%
17%
8%

New orders received in fiscal 2009 increased 9% to $18,998,000 from the $17,420,000 received in fiscal 2008. New orders
increased primarily due to an increase in military orders.

New orders received in fiscal 2008 increased 8% to $17,420,000 from the $16,158,000 received in fiscal 2007. New orders
increased primarily due to an increase in military orders.

In fiscal 2009, orders at Giga-tronics Division decreased primarily due to a decrease in commercial demand for its products.
Microsource increased primarily due to an increase in military demand for its products.

In fiscal 2008, orders at Giga-tronics Division increased primarily due to an increase in commercial demand for its
products. Microsource increased primarily due to an increase in military demand for its products.

The following table shows order backlog and related information at fiscal year-end:

Backlog

(Dollars in thousands)
Backlog of unfilled orders
Backlog of unfilled orders shippable within one year
Previous fiscal year end (FYE) long term backlog

2009
$ 9,105
6,810

2008
$ 7,528
4,604

2007
8,439
5,294

% change

2008
2009
vs.
vs.
2007
2008
21% (11%)
48% (13%)

reclassified during year as shippable within one year

1,640

425

303

286% 40%

Net cancellations during year of previous FYE

one-year backlog

904

The increase in backlog at year-end 2009 of 21% was primarily due to orders exceeding shipments.

The decrease in backlog at year-end 2008 of 11% was primarily due to shipments exceeding orders.

The allocation of net sales was as follows for the fiscal years shown:

Allocation of Net Sales

(Dollars in thousands)
Commercial
Government / Defense

Total

2009
$ 6,303
11,118
$ 17,421

2008
$ 7,020
11,311
$ 18,331

2007
$ 7,054
10,994
$ 18,048

The allocation of net sales by segment was as follows for the fiscal years shown:

Allocation of Net Sales by Segment

(Dollars in thousands)
Giga-tronics Division
Commercial
Government / Defense

Total

Microsource
Commercial
Government / Defense

Total

2009

2008

2007

$ 4,694
6,989
$ 11,683

5,282
9,264
$ 14,546

$ 5,355
7,183
$ 12,538

$ 1,609
4,129
$ 5,738

$ 1,738
2,047
$ 3,785

$ 1,699
3,811
$ 5,510

(7%)

2%
102% (46%)
52% (31%)

Fiscal 2009 net sales were $17,421,000, a 5% decrease from the $18,331,000 of net sales in 2008. The decrease in sales
was primarily due to a decrease in commercial shipments. Sales at Giga-tronics Division decreased 20% or $2,863,000.
Microsource sales increased 52% or $1,953,000.

Fiscal 2008 net sales were $18,331,000, a 2% increase from the $18,048,000 of net sales in 2007. The increase in sales was
primarily due to improved military deliveries. Sales at Giga-tronics Division increased 16% or $2,008,000. Microsource
sales decreased 31% or $1,725,000.

% change

2009
vs.
2008
(10%)
(2%)
(5%)

2008
vs.
2007
0%
3%
2%

% change

2009
vs.
2008

(11%)
(25%)
(20%)

2008
vs.
2007

(1%)
29%
16%

Cost of sales was as follows for the fiscal years shown:

Cost of Sales

(Dollars in thousands)
Cost of sales

2009

2008
$ 9,917 $ 10,583

2007
$ 10,502

% change

2009
vs.
2008
(6%)

2008
vs.
2007
1%

In fiscal 2009, cost of sales decreased 6% to $9,917,000 from $10,583,000 in fiscal 2008, driven by a reduction in sales.
However, the percentage rate increased by 0.8% from 42.3% in fiscal 2008 to 43.1% in fiscal 2009, due to the change in
product mix.

In fiscal 2008, cost of sales increased 1% to $10,583,000 from $10,502,000 in fiscal 2007.

Operating expenses were as follows for the fiscal years shown:

Operating Expenses

(Dollars in thousands)
Engineering
Selling, general and administrative
Restructuring

Total

2009
$ 1,975
5,939
-

2008
2,248
5,538
153

2007
$ 3,731
5,456
361

% change

2009
vs.
2008
(12%)
7%
(100%)

2008
vs.
2007
(40%)
2%
(58%)

$ 7,914

$ 7,939

$ 9,548

0% (17%)

Operating expenses decreased $25,000 in fiscal 2009 over 2008 due to a decrease of $273,000 in product development
expenses excluding NRE costs and a decrease of $153,000 in restructuring charges, offset by an increase of $401,000 in
selling, general and administrative expense. The increase in selling, general and administrative expense is a result of higher
marketing expense of $394,000 and higher administrative expense of $194,000 offset by lower commission expense of
$187,000. As a result of adopting SFAS 123(R) in fiscal 2007, the Company recorded $270,000 of expense in fiscal 2009.

Operating expenses decreased 17% or $1,609,000 in fiscal 2008 over 2007 due to a decrease of $1,483,000 in product
development expense and a decrease of $208,000 in restructuring charges, offset by an increase of $82,000 in selling,
general and administrative expense. The increase in selling, general and administrative expense is a result of higher
marketing expense of $251,000 and higher commission expense of $199,000, offset by lower administrative expense of
$368,000. As a result of adopting SFAS 123(R) in fiscal 2007, the Company recorded $211,000 of expense in fiscal 2008.
Included in the operating expenses for fiscal 2008 was a one-time restructuring charge of $73,000 to reserve the remaining
lease obligation on the Fremont facility and $80,000 in severance cost, for a total of $153,000.

Net interest income in 2009 decreased from $36,000 to $7,000 due to a lower average cash balance throughout the year.

Net interest income in 2008 decreased from $108,000 to $36,000 due to a lower average cash balance throughout the year.

Giga-tronics recorded a net loss of $330,000 or $0.07 per fully diluted share for fiscal 2009 versus a net loss of $234,000 or
$0.05 per fully diluted share in fiscal 2008.

Giga-tronics recorded a net loss of $234,000 or $0.07 per fully diluted share for fiscal 2008 versus a net loss of $1,867,000
or $0.39 per fully diluted share in fiscal 2007.

Inventories consist of the following:

Net Inventories

(Dollars in thousands)
Raw materials
Work-in-progress
Finished goods
Demonstration inventory

Total

% change
2009
vs.
2008
18%
(25%)
51%
24%

2009
$ 3,263
1,127
559
460

2008
$ 2,767
1,501
369
371

$ 5,409

$ 5,008

Inventories increased by $401,000 at fiscal year end 2009 compared to the prior fiscal year end, primarily due to a return of
goods from a customer.

Financial Condition and Liquidity

As of March 28, 2009, Giga-tronics had $1,518,000 in cash and cash-equivalents, compared to $1,845,000 as of March 29,
2008.

Working capital for the 2009 fiscal year end was $7,131,000, compared to $7,231,000 in 2008 and $7,280,000 in 2007.
The decrease in working capital at 2009 from 2008 was primarily due to the operating loss in the year. The decrease in
working capital at 2008 from 2007 was primarily due to the operating loss in the year and other fiscal year-end liabilities
offset by a reduction in net inventories.

The Company’s current ratio (current assets divided by current liabilities) at March 28, 2009 was 3.1 compared to 3.7 on
March 29, 2008 and 3.1 on March 31, 2007. At March 28, 2009 the decrease was primarily the result of an increase in
accounts payable at quarter end and an increase in deferred revenue offset by an equal increase in accounts receivable. At
March 29, 2008, the increase in this ratio was primarily the result of a decrease in net inventories offset by other fiscal year-
end liabilities.

Cash used in operations amounted to $300,000 in 2009. Cash provided by operations amounted to $220,000 in 2008. Cash
used in operations amounted to $1,406,000 in 2007. Cash used in operations in 2009 was primarily attributed to the
operating loss for the year. Cash provided by operations in 2008 was primarily attributed to the decrease in inventories,
partially offset by the operating loss in the year. Cash used in operations in 2007 was primarily attributed to the operating
loss in the year.

Additions to property and equipment were $69,000 in 2009 compared to $206,000 in 2008 and $204,000 in 2007. The
capital equipment spending in fiscal 2009 was due to an upgrade of capital equipment enabling the manufacture of new
products being released. The capital equipment spending in fiscal 2008 was due to the implementation of the Enterprise
Resource Plan (ERP) system at Giga-tronics and Microsource. The capital equipment spending in fiscal 2007 was due to
an upgrade of capital equipment enabling the manufacture of new products being released.

Other cash inflows in 2008 consisted of $22,000 from the sale of common stock in connection with the exercise of stock
options.

Contractual Obligations

The Company leases various facilities under operating leases that expire through May 2013. Total future minimum lease
payments under these leases amount to approximately $3,487,000.

The Company leases equipment under capital leases that expire through September 2012. The future minimum lease
payments under these leases amount to approximately $45,000.

The Company is committed to purchase certain inventory under non-cancelable purchase orders. As of March 28, 2009,
total non–cancelable purchase orders were approximately $1,152,000 through fiscal 2010 and $202,000 beyond fiscal 2010
and were scheduled to be delivered to the Company at various dates through May 2010.

The following table disclosed the amount of payments due under certain contractual obligations in the specified time
periods.

(Dollars in thousands)
Operating leases
Capital lease
Purchase obligations

Total

Under one year
$ 1,067
18
1,152
$ 2,237

One to three years
$ 1,458
18
202
$ 1,678

Three to five years More than five years
$ 0
-
-
$ 0

$ 962
9
-
$ 971

Critical Accounting Policies

The Company’s discussion and analysis of its financial condition and the results of operations are based upon the
consolidated financial statements included in this report and the data used to prepare them. The consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America
and management is required to make judgments, estimates and assumptions in the course of such preparation. The
Summary of Significant Accounting Policies included with the consolidated financial statements describes the significant
accounting policies and methods used in the preparation of the consolidated financial statements. On an ongoing basis, the
Company re-evaluates its judgments, estimates and assumptions, including those related to revenue recognition, product
warranties, allowance for doubtful accounts, valuation of inventories and valuation allowance on deferred tax assets. The
Company bases its judgment and estimates on historical experience, knowledge of current conditions, and its beliefs of
what could occur in the future considering available information. Actual results may differ from these estimates under
different assumptions or conditions. Management of Giga-tronics has identified the following as the Company’s critical
accounting policies:

Revenue Recognition

Revenues are recognized when there is evidence of an arrangement, delivery has occurred, the price is fixed or
determinable, and collectability is reasonably assured. This generally occurs when products are shipped and the risk of loss
has passed. Revenue related to products shipped subject to customers’ evaluation is recognized upon final acceptance.

Product Warranties

The Company’s warranty policy generally provides one to three years of coverage depending on the product. The
Company records a liability for estimated warranty obligations at the date products are sold. The estimated cost of
warranty coverage is based on the Company’s actual historical experience with its current products or similar products. For
new products, the required reserve is based on historical experience of similar products until sufficient historical data has
been collected on the new product. Adjustments are made as new information becomes available.

Accounts Receivable

Accounts receivable are stated at their net realizable value. The Company has estimated an allowance for uncollectible
accounts based on analysis of specifically identified problem accounts, outstanding receivables, consideration of the age of
those receivables, and the Company’s historical collection experience.

Inventory

Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis. The Company
periodically reviews inventory on hand to identify and write down excess and obsolete inventory based on estimated
product demand.

Deferred Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date. Future tax benefits are subject to a valuation

allowance when management is unable to conclude that its deferred tax assets will more likely than not be realized from the
results of operations. The Company has recorded a valuation allowance to reflect the estimated amount of deferred tax
assets that may not be realized. The ultimate realization of deferred tax assets is dependent upon generation of future
taxable income during the periods in which those temporary differences become deductible. Management considers
projected future taxable income and tax planning strategies in making this assessment. Based on the historical taxable
income and projections for future taxable income over the periods in which the deferred tax assets become deductible,
management has established a valuation allowance against its net deferred tax assets as of March 28, 2009 and March 29,
2008.

The Company considers all tax positions recognized in its financial statements for the likelihood of realization. When tax
returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing
authorities, while others are subject to uncertainty about the merits of the positions taken or the amounts of the positions
that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period
during which, based on all available evidence, management believes it is more likely than not that the position will be
sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit
that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of
the benefits associated with tax positions taken that exceeds the amount measured as described above, if any, would be
reflected as a liability for unrecognized tax benefits in the accompanying condensed balance sheet along with any
associated interest and penalties that would be payable to the taxing authorities upon examination. The Company
recognizes accrued interest and penalties, if any, related to unrecognized tax benefits as a component of the provision for
income taxes in the consolidated statements of operations.

Product Development Costs

The Company incurs pre-production costs on certain long-term supply arrangements. The costs, which represent non-
recurring engineering and tooling costs, are capitalized as other assets and amortized over their useful life when
reimbursable by the customer. All other pre-production and product development costs are expensed as incurred.

Share-Based Compensation

The Company has a stock incentive plan that provides for the issuance of stock options to employees. The Company
calculates compensation expense under SFAS 123(R) using a Black-Scholes-Merton option pricing model. In so doing, the
Company makes certain key assumptions in making estimates used in the model. The Company believes the estimates
used, which are presented in Note 1 of Notes to Consolidated Financial Statements, are appropriate and reasonable.

Off-Balance-Sheet Arrangements

The Company has no other off-balance-sheet arrangements (including standby letters of credit, guaranties, contingent
interests in transferred assets, contingent obligations indexed to its own stock or any obligation arising out of a variable
interest in an unconsolidated entity that provides credit or other support to the Company), that have or are likely to have a
material effect on its financial conditions, changes in financial conditions, revenue, expense, results of operations, liquidity,
capital expenditures or capital resources.

Management believes that the Company has adequate resources to meet its anticipated operating and capital expenditure
needs for the foreseeable future. Giga-tronics intends to maintain research and development expenditures for the purpose
of broadening its product base. From time to time, Giga-tronics considers a variety of acquisition opportunities to also
broaden its product lines and expand its markets. Such acquisition activity could also increase the Company’s operating
expenses and require the additional use of capital resources.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Financial Statements

Consolidated Balance Sheets -

As of March 28, 2009 and March 29, 2008

Consolidated Statements of Operations -

Years ended March 28, 2009 and March 29, 2008

Consolidated Statements of Shareholders’ Equity -

Years ended March 28, 2009 and March 29, 2008

Consolidated Statements of Cash Flows -

Years ended March 28, 2009 and March 29, 2008

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Page No.

26 - 34

CONSOLIDATED BALANCE SHEETS

(In thousands except share data)
Assets
Current Assets

Cash and cash equivalents
Trade accounts receivable, net of allowance

of $102 and $93, respectively

Inventories, net
Prepaid expenses and other current assets

Total current assets

Property and equipment

Leasehold improvements
Machinery and equipment
Office furniture and fixtures
Total property and equipment
Less accumulated depreciation and amortization
Property and equipment, net
Other assets

Total assets

Liabilities and shareholders' equity
Current liabilities

Accounts payable
Accrued commission
Accrued payroll and benefits
Accrued warranty
Deferred revenue
Deferred rent
Capital lease obligations
Other current liabilities

Total current liabilities

Long term obligation - Deferred rent
Long term obligation - Capital lease
Total liabilities

March 28, 2009 March 29, 2008

$ 1,518

$ 1,845

3,110
5,409
430
10,467

373
15,462
788
16,623
16,317
306
16
$ 10,789

$ 1,219
144
397
177
959
118
16
306
3,336

96
25
3,457

2,693
5,008
383
9,929

373
15,468
723
16,564
16,164
400
32
$ 10,361

$ 649
181
526
190
646
286
-
220
2,698

271
-
2,969

Commitments and contingencies

Shareholders' equity
Preferred stock of no par value; Authorized 1,000,000 shares; no shares

outstanding at March 28, 2009 and March 29, 2008

Common stock of no par value; Authorized 40,000,000 shares; 4,824,021
shares at March 28, 2009 and March 29, 2008 issued and outstanding

Accumulated deficit
Total shareholders' equity
Total liabilities and shareholders' equity

13,668

(6,336)
7,332
$ 10,789

13,398
(6,006)
7,392
$ 10,361

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except share data)
Net sales
Cost of sales
Gross profit

Engineering
Selling, general and administrative
Restructuring

Total operating expenses

Years Ended

March 28, 2009
$ 17,421
9,917
7,504

March 29, 2008
$ 18,331
10,583
7,748

1,975
5,939
-
7,914

2,248
5,538
153
7,939

Operating loss from continuing operations

(410)

(191)

Other expense
Interest income, net
Loss from continuing operations before income taxes
Provision for income taxes
Loss from continuing operations
Income (loss) on discontinued operations, net of income

taxes of nil for 2009 and 2008

Net loss

Basic and diluted (loss) earnings per share:

From continuing operations
On discontinued operations

Basic and diluted loss per share

Shares used in per share calculation:

Basic
Diluted

-
7
(403)
2
(405)

46
36
(201)
2
(203)

$ (330)

(31)

$ (234)

$ (0.08)
0.01

$ (0.07)

$ (0.04)
(0.01)

$ (0.05)

4,824
4,824

4,813
4,813

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY

(In thousands except share data)
Balance at March 31, 2007
Net loss
Share based compensation
Stock issuance under stock options plans
Balance at March 29, 2008
Net loss
Share based compensation
Stock issuance under stock options plans

Balance at March 28, 2009

Shares
4,809,021

Amount
$ 13,165

-
15,000
4,824,021

211
22
13,398

-
-

270
-

Accumulated
Deficit
$ (5,772)
(234)
-
-
(6,006)
(330)
-
-

Total
$ 7,393
(234)
211
22
7,392
(330)
270
-

4,824,021

$ 13,668

$ (6,336)

$ 7,332

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
Cash flows from operations:
Net loss
Adjustments to reconcile net loss to net cash
(used in) provided by operations:

Net provision for doubtful accounts
Depreciation and amortization
Gain on sale of fixed asset
Share based compensation
Deferred rent
Changes in operating assets and liabilities:

Trade accounts receivable
Inventories
Prepaid expenses and other assets
Accounts payable
Accrued commissions
Accrued payroll and benefits
Accrued warranty
Deferred revenue
Other current liabilities

Net cash (used in) provided by operations

Cash flows from investing activities:
Proceeds from sales of equipment
Purchases of property and equipment
Net cash used in investing activities

Cash flows from financing activities:
Proceeds from capital lease
Issuance of common stock
Net cash provided by financing activities

Fiscal Years Ended
March 28, 2009

March 29, 2008

$ (330)

$ (234)

9
162
-
270
(343)

(426)
(401)
(47)
570
(37)
(129)
(13)
313
102
(300)

31
128
(3)
211
(83)

26
833
(23)
(457)
(11)
(140)
(17)
(35)
(6)
220

1
(69)
(68)

5
(206)
(201)

41
-
41

-
22
22

(Decrease) increase in cash and cash equivalents

(327)

Beginning cash and cash equivalents
Ending cash and cash equivalents

1,845
$ 1,518

1,804
$ 1,845

Supplementary disclosure of cash flow information:

Cash paid for income taxes

Cash paid for interest

$ 2

See Accompanying Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

The Company The accompanying consolidated financial statements include the accounts of Giga-tronics Incorporated
(“Giga-tronics”) and its wholly-owned subsidiary, Microsource Incorporated (“Microsource”), collectively the “Company”.
The Company’s corporate office and manufacturing facilities are located in Northern California. Giga-tronics and its
subsidiary companies design, manufacture and market a broad line of test and measurement equipment used in the
development, test, and maintenance of wireless communications products and systems, flight navigational equipment,
electronic defense systems, and automatic testing systems. The Company also manufactures and markets a line of test,
measurement, and handling equipment used in the manufacturing of semiconductor devices. The Company’s products are
sold worldwide to customers in the test and measurement and semiconductor industries. The Company currently has no
foreign-based operations or material amounts of identifiable assets in foreign countries. Its gross margins on foreign and
domestic sales are similar, and all non-U.S. sales are made in U.S. dollars.

Principles of Consolidation The consolidated financial statements include the accounts of Giga-tronics and its wholly-
owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fiscal Year The Company’s financial reporting year consists of either a 52 week or 53 week period ending on the last
Saturday of the month of March. Both fiscal year 2009 and 2008 contained 52 weeks. All references to years in the
consolidated financial statements relate to fiscal years rather than calendar years.

Reclassifications Certain reclassifications, none of which affected net loss, have been made to prior year balances in order
to conform to the current year presentation.

Revenue Recognition Revenue is recorded when there is evidence of an arrangement, delivery has occurred, the price is
fixed or determinable, and collectability is reasonably assured. This occurs when products are shipped, unless the
arrangement involves acceptance terms. If the arrangement involves acceptance terms, the Company defers revenue until
product acceptance is received. Further, sales made to distributors do not include price protection or product return rights,
except for product defects covered under warranty arrangements. The Company has no other post-shipment obligations.
The Company reports freight costs paid for shipments to customers as cost of sales.

The Company has estimated an allowance for uncollectable accounts based on analysis of specifically identified accounts,
outstanding receivables, consideration of the age of those receivables and the Company’s historical collection experience.
The activity in the reserve account is as follows:

(Dollars in thousands)
Beginning balance
Provision for doubtful accounts
Recoveries of doubtful accounts
Write-off of doubtful accounts

Ending balance

March 28, 2009
$ 93
9
-
-

March 29, 2008
$ 62
31
-
-

$ 102

$ 93

Accrued Warranty The Company’s warranty policy generally provides one to three years of coverage depending on the
product. The Company records a liability for estimated warranty obligations at the date products are sold. The estimated
cost of warranty coverage is based on the Company’s actual historical experience with its current products or similar
products. For new products, the required reserve is based on historical experience of similar products until such time as
sufficient historical data has been collected on the new product. Adjustments are made a new information becomes
available.

Inventories Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis.

Property and Equipment Property and equipment are stated at cost. Depreciation is calculated using the straight-line
method over the estimated useful lives of the respective assets, which range from three to ten years for machinery and
equipment and office fixtures. Leasehold improvements and assets acquired under capital leases are amortized using the
straight-line method over the shorter of the estimated useful lives of the respective assets or the lease term.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If such review indicates that the carrying amount of an asset exceeds
the sum of its expected future cash flows on an undiscounted basis, the asset’s carrying amount would be written down to
fair value. Additionally, the Company reports long-lived assets to be disposed of at the lower of carrying amount or fair
value less cost to sell. As of March 28, 2009 and March 29, 2008, management believes there has been no impairment of
the Company’s long-lived assets.

Deferred Rent Rent expense is recognized in an amount equal to the minimum guaranteed base rent plus future rental
increases amortized on the straight-line basis over the terms of the leases, including free rent periods.

Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred
income tax assets and liabilities are measured using enacted tax rates that apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Future tax benefits are subject to a valuation allowance
when management is unable to conclude that its deferred income tax assets will more likely than not be realized from the
results of operations. The ultimate realization of deferred income tax assets is dependent upon generation of future taxable
income during the periods in which those temporary differences become deductible. Management considers projected
future taxable income and tax planning strategies in making this assessment. Based on the historical taxable income and
projections for future taxable income over the periods in which the deferred income tax assets become deductible,
management believes it more likely than not that the company will not realize benefits of these deductible differences as of
March 28, 2009. Management has, therefore, established a full valuation allowance against its net deferred income tax
assets as of March 28, 2009.

Product Development Costs The Company incurs pre-production costs on certain long-term supply arrangements. The
costs, which represent non-recurring engineering and tooling costs, are capitalized as other assets and amortized over their
useful life when reimbursable by the customer. All other product development costs are charged to operations as incurred.
There were no capitalized pre-production costs included in other assets as of March 28, 2009 and March 29, 2008.

Software Development Costs Development costs included in the research and development of new products and
enhancements to existing products are expensed as incurred, until technological feasibility in the form of a working model
has been established. To date, completion of software development has been concurrent with the establishment of
technological feasibility, and accordingly, no costs have been capitalized.

Share-based Compensation The Company established a 2005 Equity Incentive Plan, which provides for the granting of
options for up to 700,000 shares of Common Stock. The Company accounts for share based compensation in accordance
with Statement of Financial Accounting Standards No. 123(R), Share Based Payment (SFAS 123(R), which requires that
share-based compensation expense be recorded for all stock options that are ultimately expected to vest as the requisite
service is rendered. In the fiscal year ended March 28, 2009 there were 146,500 option grants made, and in the prior year
157,000 grants were made.

SFAS 123(R) requires the cash flows resulting from the tax benefits resulting from tax deductions in excess of the
compensation cost recognized for those options (excess tax benefits) to be classified as a cash flow from financing in the
statement of cash flows. These excess tax benefits were not significant for the Company for the fiscal year ended March
28, 2009.

In calculating compensation related to stock option grants, the fair value of each stock option is estimated on the date of
grant using the Black-Scholes-Merton option-pricing model and the following weighted-average assumptions:

Years Ended
Dividend yield
Expected volatility
Risk-free interest rate
Expected term (years)

March 28, 2009
Zero
90%
2.67%
3.86

March 29, 2008
Zero
80% to 112%
2.21% to 3.59%
3.75

The computation of expected volatility used in the Black-Scholes-Merton option-pricing model is based on the historical
volatility of Giga-tronics’ share price. The expected term is estimated based on a review of historical employee exercise
behavior with respect to option grants.

Discontinued Operations In the first quarter of fiscal 2004, the Company discontinued the operations at its Dymatix
Division due to the substantial losses incurred over the previous two years. In the fourth quarter of fiscal 2004, the
Company consummated the sale of its Dymatix Division. Expenses are recorded for discontinued operations associated
with the partial abandonment of the lease for the Fremont facility. Included in this lease is 7,727 square feet, which the
Company effectively abandoned upon sale of Dymatix on March 26, 2004. As of March 29, 2008, the Company has fully
reserved the remaining lease due to the low probability of leasing it to a sub-tenant prior to the expiration of the Company’s
lease obligation in June 30, 2009. Income from discontinued operations was $75,000 for fiscal 2009. This resulted from
the foreclosure and resale of the Dymatix assets to a third party. During the three month period ended March 29, 2008 the
Company recorded a $65,000 loss on discontinued operations due to the adjustment to the sub-lease accrual. For fiscal
2008, the Company recorded a loss on discontinued operations of $31,000 due to the receipt of a payment of $18,000 on
previously reserved receivables, a payment of $41,000 from the sale of a previously written off asset offset by an
adjustment of $90,000 to the sub-lease accrual.

Earnings (Loss) Per Share Basic earnings (loss) per share is computed using the weighted average number of common
shares outstanding during the period. Diluted earnings per share incorporate the incremental shares issuable upon the
assumed exercise of stock options using the treasury method. Antidilutive options are not included in the computation of
diluted earnings per share.

Comprehensive Loss There are no items of other comprehensive loss, other than net loss.

Financial Instruments and Concentration of Credit Risk Financial instruments that potentially subject the Company to
credit risk consist of cash, cash equivalents and trade accounts receivable. The Company’s cash equivalents consist of
overnight deposits. Cash and cash-equivalents are held in recognized depository institutions. At March 28, 2009 and
March 29, 2008, the Company had deposits in excess of federally insured limits. The Company has not incurred losses on
these deposits to date and does not expect to incur any losses based on the credit ratings of the financial institutions.
Concentration of credit risk in trade accounts receivable results primarily from sales to major customers. The Company
individually evaluates the creditworthiness of its customers and generally does not require collateral or other security. At
March 28, 2009, two customers comprised 25% and 20%, respectively, of consolidated gross accounts receivable. At
March 29, 2008, two customers comprised 24% and 13%, respectively, of consolidated gross accounts receivable.

Fair Value of Financial Instruments The carrying amount for the Company’s cash-equivalents, trade accounts receivable
and accounts payable approximates fair market value because of the short maturity of these financial instruments.

Recently Issued Accounting Pronouncements The following accounting standards issued as of March 29, 2008 may affect
the future financial reporting of Giga-tronics Incorporated:

SFAS No. 141(R), Business Combinations. This Statement, among other things, establishes principles and requirements for
how the acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the acquired business, (ii) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase and (iii) determines what information to
disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

The Company is required to adopt SFAS No. 141(R) for all business combinations for which the acquisition date is on or
after March 29, 2009. Earlier adoption is prohibited. This standard will change the Company’s accounting treatment for
business combinations on a prospective basis.

SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51. This
Statement establishes accounting and reporting standards for noncontrolling interests in a subsidiary and for the
deconsolidation of a subsidiary. Minority interests will be recharacterized as noncontrolling interests and classified as a
component of equity. It also establishes a single method of accounting for changes in a parent’s ownership interest in a
subsidiary and requires expanded disclosures. This statement is effective for fiscal years beginning on or after December
15, 2008, with early adoption prohibited. The Company does not expect the adoption of this Statement will have a material
impact on its financial position, results of operations or cash flows.

Cash and Cash-Equivalents

Cash and cash-equivalents of $1,518,000 and $1,845,000 at March 28, 2009 and March 29, 2008, respectively, consist of
overnight deposits.

Inventories

Inventories consist of the following:

(Dollars in thousands)
Raw materials
Work-in-progress
Finished goods
Demonstration inventory

Total

Selling Expenses

March 28, 2009
$ 3,263
1,127
559
460

March 29, 2008
$ 2,767
1,501
369
371

$ 5,409

$ 5,008

Selling expenses consist primarily of commissions paid to various marketing agencies. Commission expense totaled
$893,000 and $1,080,000 for fiscal 2009 and 2008, respectively. Advertising costs, which are expensed as incurred, totaled
$41,000 and $46,000 for fiscal 2009 and 2008, respectively.

Significant Customers and Industry Segment Information

The Company has two reportable segments: Giga-tronics Division and Microsource. Giga-tronics Division produces a
broad line of test and measurement equipment used in the development, test and maintenance of wireless communications
products and systems, flight navigational equipment, electronic defense systems and automatic testing systems and designs,
manufactures, and markets a line of switching devices that link together many specific purpose instruments that comprise
automatic test systems. Microsource develops and manufactures a broad line of Yttrium, Iron and Garnet (YIG) tuned
oscillators, filters and microwave synthesizers, which are used in a wide variety of microwave instruments or devices.

The accounting policies for the segments are the same as those described in the "Summary of Significant Accounting
Policies". The Company evaluates the performance of its segments and allocates resources to them based on earnings
before income taxes. Segment net sales include sales to external customers.
Inter-segment activities are eliminated in
consolidation. Assets include accounts receivable, inventories, equipment, cash, deferred income taxes, prepaid expenses
and other long-term assets. The Company accounts for inter-segment sales and transfers at terms that allow a reasonable
profit to the seller. During the periods reported there were no significant inter-segment sales or transfers.

The Company's reportable operating segments are strategic business units that offer different products and services. They
are managed separately because each business utilizes different technology and requires different accounting systems. The
Company’s chief operating decision maker is considered to be the Company’s Chief Executive Officer (“CEO”). The CEO
reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues
and pre-tax income by operating segment. The tables below present information for the fiscal years ended in 2009 and
2008.

March 28, 2009 (Dollars in thousands)
Revenue
Interest income, net
Depreciation and amortization
(Loss) income from continuing operations

before income taxes

Assets

March 29, 2008 (Dollars in thousands)
Revenue
Interest income, net
Depreciation and amortization
(Loss) income from continuing operations

before income taxes

Assets

Giga-tronics Division
$ 11,683
7
137

Microsource
$ 5,738
-
25

Total
$ 17,421
7
162

(1,451)
6,420

1,048
4,369

(403)
10,789

Giga-tronics Division
$ 14,546
11
103

Microsource
$ 3,785
25
25

Total
$ 18,331
36
128

(265)
7,193

64
3,168

(201)
10,361

The Company’s Giga-tronics Division and Microsource segments sell to agencies of the U.S. government and U.S. defense-
related customers. In fiscal 2009 and 2008, U.S. government and U.S. defense-related customers accounted for 61% and
44% of sales, respectively. During fiscal 2009, no customer other than U.S. government agencies and their defense
contractors accounted for 10% of the Company’s consolidated revenues at March 28, 2009. During fiscal 2008, no
customer other than U.S. government agencies and their defense contractors accounted for 10% of the Company’s
consolidated revenues at March 29, 2008.

Export sales accounted for 23% and 38% of the Company’s sales in fiscal 2009 and 2008, respectively. Export sales by
geographical area are shown below:

(Dollars in thousands)
Americas
Europe
Asia
Rest of world

Total

Loss per Share

March 28, 2009
$ 236
1,783
1,456
456

$ 3,931

March 29, 2008
$ 1,250
2,778
1,087
1,868

$ 6,983

Net loss and shares used in per share computations for the years ended March 28, 2009 and March 29, 2008 are as follows:

(In thousands except per share data)
Net loss

Weighted average:
Common shares outstanding
Potential common shares

Common shares assuming dilution

Net loss per share of common stock
Net loss per share of common stock assuming dilution
Stock options not included in computation

March 28, 2009
$ (330)

March 29, 2008
$ (234)

4,824
-

4,813
-

4,824

4,813

$ (0.07)
$ (0.07)
771

$ (0.05)
$ (0.05)
856

The number of stock options not included in the computation of diluted earnings per share (EPS) for the periods ended
March 28, 2009 and March 29, 2008 are a result of the Company’s loss from continuing operations and, therefore, the
options are antidilutive.

Income Taxes

Following are the components of the provision for income taxes:

Years Ended (In thousands)
Current

Federal
State

Total current
Deferred
Federal
State

Total deferred
Change in valuation allowance
Provision for income taxes

March 28, 2009

March 29, 2008

-
2
2

1,182
423
1,605
(1,605)
2

-
2
2

39
14
53
(53)
2

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as
follows:

Year Ended (In thousands)
Net operating loss carryforwards
Income tax credits
Inventory reserves and additional costs capitalized
Fixed assets depreciation
Accrued vacation
Accrued warranty
Deferred rent
Other accrued liabilities
Future state tax effect
Allowance for doubtful accounts
Total deferred tax assets

Valuation allowances

March 28, 2009

March 29, 2008

12,056
2,076
2,345
149
112
76
74
1
(196)
45
16,738
(16,738)
0

13,667
1,969
2,273
153
110
82
50
201
(203)
41
18,343
(18,343)
0

Years Ended (In thousands except percentages)
Statutory federal income tax
Valuation allowance
Expiration of net operating losses
State income tax, net of federal benefit
Non-tax deductible expenses
Liability for uncertain tax positions
Other
Effective income tax

March 28, 2009
(112)
(1,605)
1,758
(19)
82
(107)
5
2

34.0%
489.4
(536.0)
5.8
(25.0)
32.6
(1.5)
(0.7%)

March 29, 2008
(79)
(53)
178
(14)
99
(127)
(2)
2

34.0%
22.9
(76.8)
6.0
(42.7)
54.9
0.7
(1.0%)

The decrease in valuation allowance from March 29, 2008 to March 28, 2009 was $1,605,000. The decrease in valuation
allowance from March 31, 2007 to March 29, 2008 was $53,000.

As of March 28, 2009 and March 29, 2008, the Company had pre-tax federal net operating loss carryforwards of
$31,979,000 and $36,778,000 and state net operating loss carryforwards of $20,281,000 and $19,910,000 respectively,
available to reduce future taxable income. The federal and state net operating loss carryforwards begin to expire from fiscal
2012 through 2029 and from 2013 through 2019, respectively. $5,640,000 of federal net operating loss carryforwards are
subject to an annual IRC Section 382 limitation of approximately $100,000. At March 28, 2009, the accumulated IRC
Section 382 losses available for use are approximately $898,000. Utilization of net operating loss carryforwards may be

subject to annual limitations due to certain ownership change limitations as required by Internal Revenue Code Section 382.
The federal income tax credits begin to expire from 2020 through 2025 and the state income tax credit carryforwards are
carried forward indefinitely.

The Company has recorded a valuation allowance to reflect the estimated amount of deferred tax assets, which may not be
realized. The ultimate realization of deferred tax assets is dependent upon generation of future taxable income during the
periods in which those temporary differences become deductible. Management considers projected future taxable income
and tax planning strategies in making this assessment. Based on the historical taxable income and projections for future
taxable, management decided to record a full valuation allowance against the net deferred tax assets.

The Company files U.S. federal and California state tax returns. The Company is generally no longer subject to tax
examinations for years prior to the fiscal year 2005 for federal purposes and fiscal year 2004 for California purposes, except
in certain limited circumstances. The Company does not have any tax audits or other issues pending.

A reconciliation of the beginning and ending amount of the liability for uncertain tax positions, excluding potential interest
and penalties, is as follows:

(In thousands)
Balance as of March 29, 2008
Additions based on current year tax positions
Reductions for prior year tax positions and lapses of applicable statute
Balance as of March 28, 2009

Stock Options and Employee Benefit Plans

Fiscal Year 2009
297,000
70,000
(177,000)
190,000

Stock Option Plans The Company established the 2000 Stock Option Plan and the 2005 Equity Incentive Plan, each of
which provide for the granting of options for up to 700,000 shares of common stock at 100% of fair market value at the
date of grant, with each grant requiring approval by the Board of Directors of the Company. Options granted vest in one or
more installments, ranging from 2004 to 2012 and must be exercised while the grantee is employed by the Company or
within a certain period after termination of employment. Options granted to employees shall not have terms in excess of 10
years from the grant date. Holders of options may be granted stock appreciation rights (SAR), which entitle them to
surrender outstanding options for a cash distribution under certain changes in ownership of the Company, as defined in the
stock option plan. As of March 28, 2009, no SAR’s have been granted under the option plan. As of March 28, 2009, the
total number of shares of common stock available for issuance is 529,975 under the 2000 and 2005 stock option plans. All
outstanding options have a term of five years.

A summary of the changes in stock options outstanding for the years ended March 28, 2009 and March 29, 2008 is
presented below:

Outstanding at March 31, 2007

Granted
Excercised
Forfeited / Expired

Outstanding at March 29, 2008

Granted
Excercised
Forfeited / Expired

Shares
840,900
157,000
15,000
131,250
851,650
146,500
-
227,250

Weighted
Average
Exercise Price
$ 2.06
1.84
1.47
1.95
$ 2.04
1.17
-
1.96

Outstanding at March 28, 2009

770,900

$ 1.90

Exercisable at March 28, 2009

369,577

$ 2.15

Weighted Average
Remaining Contractual
Terms (Years)
3.6

Average
Intrinsic
Value
$ 149,624

3.1

$ -

2.7

2.0

$ -

As of March 28, 2009, there was $354,580 of total unrecognized compensation cost related to nonvested options granted
under the plans. That cost is expected to be recognized over a weighted average period of 1.17 years. There were 180,101
options vested during the year ended March 28, 2009. The total fair value of options vested during the year ended March
28, 2009 was $261,782. No cash received from stock option exercises for the year ended March 28, 2009.

Following is a summary of stock option activity:

Outstanding at March 31, 2007

Excercised
Forfeited
Granted

Options
Exercisable
214,750

Outstanding at March 29, 2008

338,726

Excercised
Forfeited
Granted

Outstanding at March 28, 2009

369,577

Options
Outstanding
840,900
(15,000)
(131,250)
157,000
851,650
-
(227,250)
146,500

770,900

Weighted Average
Fair Value
$ 2.06
1.47
1.95
1.84
$ 2.04
-
1.96
1.17

$ 1.90

Employee Stock Purchase Plan This plan expired in September 2006 and is no longer available.

401(k) Plans The Company has established 401(k) plans which cover substantially all employees. Participants may make
voluntary contributions to the plans for up to 20% of their defined compensation. The Company matches a percentage of
the participant’s contributions in accordance with the plan. Participants vest ratably in Company contributions over a four-
year period. Company contributions to the plans for fiscal 2009 and 2008 were approximately $2,000 and $5,000,
respectively.

Commitments

The Company leases a 47,300 square foot facility located in San Ramon, California, under a twelve-year lease that
commenced in April 1994, which was amended in July 2005 and now expires December 31, 2011. The Company leases a
33,400 square foot facility located in Santa Rosa, California, under a twenty-year lease that commenced in July 1993 and
was amended in April 2003, to now expire May 31, 2013. The amendment resulted in a reduction of lease space and
monthly lease costs.

The property located in Fremont, California with approximately 18, 700 square feet was previously occupied by ASCOR
under a lease that expires on June 30, 2009. The Company effectively vacated this property as part of its restructuring plan
as of March 31, 2007. The Company has an accrued loss of approximately $86,276 for future lease expense, net of
estimated future sub-lease rental income. All of the above activities are conducted in the San Ramon facility effective April
1, 2007. As of March 28, 2009, the Company has not sub-leased the available space.

These facilities accommodate all of the Company’s present operations. The Company also leases other equipment under
operating leases.

Total future minimum lease payments under these leases amount to approximately $3,487,000.

Fiscal year (Dollars in thousands)
2010
2011
2012
2013
2014
Thereafter

$ 1,067
1,066
898
391
65
-

$ 3,487

The aggregate rental expense was $1,109,000 and $1,031,000 in fiscal 2009 and 2008, respectively.

The Company leases equipment under capital leases that expire through September 2012. The future minimum lease
payments under these leases amount to approximately $45,000.

Warranty Obligations

The Company records a liability for estimated warranty obligations at the date products are sold. Adjustments are made as
new information becomes available. The following provides a reconciliation of changes in the Company’s warranty
reserve. The Company provides no other guarantees.

(Dollars in thousands)
Balance at beginning of period

Provision, net
Warranty costs incurred

Balance at end of period

Restructuring

March 28, 2009
$ 190
179
(192)

$ 177

March 29, 2008
$ 207
160
(177)

$ 190

In an effort to improve results and make optimal use of its resources, effective April 1, 2008, Giga-tronics integrated all
ASCOR and Giga-tronics Division engineering and manufacturing activities at the San Ramon, California facility. The
Microsource subsidiary, located in Santa Rosa, California, remains strictly a manufacturing operation, with all product
development work being performed in San Ramon. Included in the operating expenses for fiscal 2008 was a one-time
restructuring charge of $73,000 to reserve the remaining lease obligation on the Fremont facility and $80,000 in severance
costs, for a total of $153,000.

Line of Credit

On June 20, 2005, the Company executed a commitment letter with a financial institution for a secured revolving line of
credit for $2,500,000. The maximum amount that can be borrowed is limited to 80% of trade receivables, plus 25% of raw
material and finished goods inventory up to $500,000. Interest is payable at prime plus 1%. The Company is required to
comply with certain financial covenants under the arrangement. The Company has re-negotiated a new line of credit
effective June 17, 2008, which expires on June 16, 2009. At March 28, 2009, the Company is in compliance with the
covenants relating to the line of credit.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
Giga-tronics Incorporated

We have audited the accompanying consolidated balance sheets of Giga-tronics Incorporated and subsidiary (the
“Company”) as of March 28, 2009 and March 29, 2008 and the related consolidated statements of operations, changes in
shareholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements
based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Giga-tronics Incorporated and subsidiary as of March 28, 2009 and March 29, 2008, and
the results of their operations and their cash flows for each of the fiscal years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Perry-Smith LLP

San Francisco, California
May 14, 2009

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

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure controls and procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness, as of March 28, 2009,
of the design and operation of the Company's disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-
15(e) promulgated under the Exchange Act. Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this
Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified by the
SEC. Disclosure controls and procedures are also designed to ensure that such information is accumulated and
communicated to our management, including our Chief Financial Officer and Chief Executive Officer, as appropriate to
allow timely decisions regarding required disclosure. Based upon that evaluation, the Company's principal executive and
financial officers concluded that the Company's disclosure controls and procedures were effective, as of March 28, 2009.

Report of Management on Internal Control over Financial Reporting

Management of Giga-tronics is responsible for establishing and maintaining adequate internal control over financial
reporting for the Company, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The
Company's management, under the supervision of the Chief Executive Officer and Chief Financial Officer, has assessed the
effectiveness of the Company's internal control over financial reporting as of March 28, 2009. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in
Internal Control-Integrated Framework. Our internal control over financial reporting includes policies and procedures
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external reporting purposes in accordance with United States generally accepted accounting principles and
that:
(cid:120)

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and directors of the Company;
and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company's assets that could have a material effect on the financial statements.

(cid:120)

Based on this assessment, management concluded that, as of March 28, 2009, the Company's internal control over financial
reporting was effective based on those criteria.

This annual report does not include an attestation report of the Company's independent registered public accounting firm
regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's
independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that
permit the Company to provide only management's report in this annual report.

Changes in internal controls

There was no change in the Company's internal control over financial reporting identified in connection with the evaluation
required by Rule 15d-15 that occurred during the year ended March 28, 2009 that has materially affected or is reasonably
likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

The Company is not aware of any information required to be reported on Form 8-K that has not been previously reported.

PART III

ITEM 10. DIRECTOR, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding Directors of the Company is set forth under the heading “Election of Directors” of the Company’s
Proxy Statement for its 2009 Annual Meeting of Shareholders, incorporated herein by reference. This Proxy Statement is
to be filed no later than 120 days after the close of the fiscal year ended March 28, 2009.

EXECUTIVE OFFICERS

NAME

AGE

John R. Regazzi

Patrick J. Lawlor

Jeffrey T. Lum

Malcolm E. Levy

POSITION

Chief Executive Officer and a Director of the Company since April 2006. Mr. Regazzi had
been President and General Manager of Instrument Division since September 2005, and
prior to that, was Vice President of Operations for Instrument Division from October 2004
through September 2005. Prior to that, he was Vice President of Engineering for
Instrument Division from June 2001 through October 2004. Previous experience includes
22 years at Hewlett Packard and Agilent Technologies in various design and management
positions associated with their microwave sweeper and synthesizer product lines. His final
position at Agilent Technologies was as a senior engineering manager.

Vice President, Finance, Chief Financial Officer and Secretary of Giga-tronics, Inc. since
February 2007. Mr. Lawlor was previously a Consultant to PDL BioPharma, Inc, and
before that was the Vice President, Chief Financial Officer at SaRonix, LLC, a $90 million
private company with international facilities. Prior to that he was the Chief Financial
Officer with Aerojet Fine Chemicals, LLC, a $65 million subsidiary of GenCorp, and Vice
President of Finance with Systems Chemistry, Inc. Mr. Lawlor spent 23 years with
Westinghouse Electric Corporation, where he rose through numerous positions among
various divisions, with his final position as Vice President of Finance and Controller.

President and a Director of the Board of ASCOR (now a division of the Company) since
November 1987. Mr. Lum founded ASCOR in 1987 and has been President since
inception. He was a founder and Vice President of Autek Systems Corporation, a
manufacturer of precision waveform analyzers. Mr. Lum serves as Treasurer and a
member of the Board of Directors for the Santa Clara Aquamaids, a non-profit
organization dedicated to advancing athletes in synchronized swimming to the Olympics
games.

Mr. Levy has over 25 years of Sales and Marketing experience in the Test & Measurement
industry. His career started in sales with Racal Instruments in the U.K. A background in
RF and Communications made him an ideal candidate to move the to U.S. and become the
sales and marketing manager for all UK manufactured instruments, including low noise
fast switching synthesizers. His final position at Racal Instruments after 20 years of service
was Executive Vice President, Sales and Marketing. Since leaving Racal in 2001 he has
helped wireless test companies grow their international sales business.

Our Code of Ethics is posted on our website, www.gigatronics.com, under the links for “Investor Relations – Corporate
Governance”.

ITEM 11. EXECUTIVE COMPENSATION

Information regarding the Company’s compensation of its executive officers is set for the under the heading “Executive
Compensation” of the Company’s Proxy Statement for its 2009 Annual Meeting of Shareholders, incorporated herein by
reference. This Proxy Statement is to be filed no later than 120 days after the close of the fiscal year ended March 28,
2009.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED SHAREHOLDER MATTERS

Information regarding security ownership of certain beneficial owners and management is set forth under the heading
“Stock Ownership of Certain Beneficial Owners and Management” of the Company’s Proxy Statement for its 2009 Annual
Meeting of Shareholders, incorporated herein by reference. Information about securities authorized for issuance under
equity compensation plans is set forth under the heading “Equity Compensation Plan Information” of its Proxy Statement
for the 2009 Annual Meeting of Shareholders, incorporated herein by reference. This Proxy Statement is to be filed no
later than 120 days after the close of the fiscal year ended March 28, 2009.

ITEM 13. CERTAIN RELATONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

Information set forth in the Proxy Statement under the section captioned “Transactions with Management and Others” is
incorporated herein by reference. This Proxy Statement is to be filed no later than 120 days after the close of the fiscal year
ended March 28, 2009.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Perry-Smith LLP served as the independent registered public accounting firm for Giga-tronics for the fiscal year ended
March 29, 2008.

Audit Fees

Perry-Smith LLP fees for audit services for fiscal 2009 were $170,000 and for fiscal 2008 were $160,000.

Audit-Related Fees

Perry-Smith LLP fees for audit-related services were $3,000 for fiscal 2009 and $2,000 for 2008.

Tax Fees

There were no Perry-Smith LLP fees for tax services for fiscal 2009 or 2008.

All Other Fees

We did not incur any fees payable to Perry-Smith LLP for other professional services in fiscal 2009 or 2008.

Audit Committee Pre-Approval Policy

Our Audit Committee has not pre-approved any type or amount of non-audit services by the independent accountants.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

PART IV

(a) The following consolidated financial statements of Giga-tronics Incorporated and subsidiaries and the related

independent registered public accounting firm are filed herewith:

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Consolidated Financial Statements:

Consolidated Balance Sheets as of March 28, 2009 and March 29, 2008

Consolidated Statements of Operations for the years ended March 28, 2009 and March 29, 2008

Consolidated Statements of Stockholders Equity for the years ended March 28, 2009 and March 29, 2008

Consolidated Statements of Cash Flows for the years ended March 28, 2009 and March 29, 2008

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Page

26 – 34

The following exhibits are filed by reference or herewith as a part of this report:

INDEX TO EXHIBITS

3.1

3.2

10.1

10.2

10.3

10.4

23.1

31.1

31.2

32.1

32.2

Articles of Incorporation of the Registrant, as amended, previously filed as Exhibit 3.1 to Form 10-KSB for the
fiscal year ended March 27, 1999 and incorporated herein by reference.

Amended and Restated Bylaws of Giga-tronics Incorporated, as amended on March 7, 2008, previously filed as
Exhibit 3.2 to Form 10-K for the fiscal year ended March 29, 2008, and incorporated herein by reference.

Standard form Indemnification Agreement for Directors and Officers, previously filed on June 21, 1999, as
Exhibit 10.2 to Form 10-KSB for the fiscal year ended March 27, 1999 and incorporated herein by reference. *

Lease between Giga-tronics Incorporated and Calfront Associates for 4650 Norris Canyon Road, San Ramon,
CA, dated December 6, 1993, previously filed as Exhibit 10.12 to Form 10-KSB for the fiscal year ended
March 26, 1994 and incorporated herein by reference.

2000 Stock Option Plan and form of Incentive Stock Option Agreement, previously filed on September 8, 2000
as Exhibit 99.1 to Form S-8 (33-45476) and incorporated herein by reference. *

2005 Equity Incentive Plan incorporated herein by reference to Attachment A of the Registrant’s Proxy
Statement filed July 21, 2005. *

Significant Subsidiaries. (See page 42 of this Annual Report of Form 10-K.)

Consent of Independent Registered Public Accounting Firm, Perry-Smith LLP. (See page 43 of this Annual
Report on Form 10-K.)

Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. (See page 44 of
this Annual Report on Form 10-K.)

Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. (See page 45 of
this Annual Report on Form 10-K.)

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. (See page 46 of this Annual Report on Form 10-K.)

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. (See page 47 of this Annual Report on Form 10-K.)

* Management contract or compensatory plan or arrangement.

In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act, the Registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

GIGA-TRONICS INCORPORATED

/s/ JOHN R. REGAZZI
Chief Executive Officer

In accordance with the requirements of the Securities Exchange Act, this annual report on Form 10-K has been signed
below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

5/14/2009
Date

5/12/2009
Date

5/13/2009
Date

5/12/2009
Date

/s/ GARRETT A. GARRETTSON
Garrett A. Garrettson

Chairman of the Board
of Directors

/s/ JOHN R. REGAZZI
John R. Regazzi

/s/ PATRICK J. LAWLOR
Patrick J. Lawlor

/s/ GEORGE H. BRUNS, JR.
George H. Bruns, Jr.

/s/ JAMES A. COLE
James A. Cole

/s/ KENNETH A. HARVEY
Kenneth A. Harvey

/s/ ROBERT C. WILSON
Robert C. Wilson

Chief Executive Officer
(Principal Executive Officer)
and Director

Vice President, Finance/
Chief Financial Officer & Secretary
(Principal Financial Officer)

Director

EXHIBIT 21

SIGNIFICANT SUBSIDIARIES

Name
Microsource, Inc.

Jurisdiction of incorporation
California

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Giga-tronics Incorporated
San Ramon, California

We consent to the incorporation by reference in the Registration Statements Nos. 333-45476, 333-34719, 333-48889, 333-
39403, 333-69688 and 333-135578 on Form S-8 of Giga-tronics Incorporated of our report dated May 14, 2009, relating to
our audit of the consolidated financial statements, which report appears elsewhere in this Annual Report on Form 10-K of
Giga-tronics Incorporated for the year ended March 28, 2009.

/s/ Perry-Smith LLP

San Francisco, California
May 14, 2009

EXHIBIT 31.1

CERTIFICATIONS UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Regazzi, certify that:

I have reviewed this Annual Report on Form 10-K of Giga-tronics, Inc.;

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

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

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

(a)

(b)

(c)

(d)

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

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

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

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

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

All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

(a)

(b)

Date:

5/14/09

/s/ JOHN R. REGAZZI
John R. Regazzi
Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick J. Lawlor, certify that:

I have reviewed this Annual Report on Form 10-K of Giga-tronics, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Date:

5/14/09

Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

/s/ PATRICK J. LAWLOR
Patrick J. Lawlor
Vice President Finance/
Chief Financial Officer & Secretary

EXHIBIT 32.1

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

In connection with the Annual Report of Giga-tronics Incorporated (the "Company") on Form 10-K for the period ending
March 29, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John R.
Regazzi, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

(1)

(2)

Date:

5/14/09

/s/ JOHN R. REGAZZI

John R. Regazzi
Chief Executive Officer

EXHIBIT 32.2

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

In connection with the Annual Report of Giga-tronics Incorporated (the "Company") on Form 10-K for the period ending
March 29, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Patrick J.
Lawlor, Vice President, Finance, Chief Financial Officer and Secretary of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

(1)

(2)

Date:

5/14/09

/s/ PATRICK J. LAWLOR

Patrick J. Lawlor
Vice President Finance,
Chief Financial Officer & Secretary

[This Page Intentionally Left Blank]

Corporate Profile

CORPORATE INFORMATION

Board of Directors

Headquarters

George H. Bruns, Jr.

James A. Cole 2, 3
General Partner, Windward Ventures
General Partner, Spectra Enterprises

Garrett A. Garrettson 1
Chairman of the Board
President, Garrettson Consulting

Kenneth A. Harvey 1, 2
President, Peak Consulting Group

John R. Regazzi
Chief Executive Officer

Robert C. Wilson 1, 2, 3
Former Chairman, Wilson & Chambers

1 Member, Compensation Committee
2 Member, Audit Committee
3 Member, Nominating Committee

Executive Officers

John R. Regazzi
Chief Executive Officer

Patrick J. Lawlor
Vice President, Finance
Chief Financial Officer & Secretary

Jeffrey T. Lum
Chief Technology Officer

Malcolm E. Levy
Vice President, Sales & Marketing

Form 10-K

Giga-tronics Incorporated
4650 Norris Canyon Road
San Ramon, CA 94583
Tel. (925) 328-4650
Fax. (925) 328-4700
www.gigatronics.com

Subsidiaries

Microsource, Inc
1269 Corporate Center Parkway
Santa Rosa, CA 94507
Tel. (707) 527-7010
Fax. (707) 527-7176
www.gigatronics.com

Perry-Smith LLP
575 Market Street, Suite 3300
Sa
, CA 9
www.perry-smith.com

n Francisco

4105

Legal Counsel

Bingham McCutchen
Three Embarcadero Center
San Francisco, CA 94111
www.bingham.com

Transfer Agent

American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, NY 10038
www.amstock.com

Annual Meeting

A copy of the Company’s complete annual report on
Form 10-K for fiscal year 2009, filed with the Securities
and Exchange Commission, may be obtained without
charge by a written request to:

The Company’s Annual Meeting of Shareholders will be
held at 9:30 a.m. on August 18, 2009 at Giga-tronics’
corporate office located at 4650 Norris Canyon Road,
San Ramon, CA 94583 USA

Corporate Secretary
Giga-tronics Incorporated
4650 Norris Canyon Road
San Ramon, CA 94583 USA

1011cvr_r.indd 2-3

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