Another result of this analog to digital conversion was the elimination of the uppermost UHF channels (52-69) that operated between 698 - 806 MHz.  Subsequently, part of this vacated frequency band was allocated for Public Safety communication use, while much of the remaining band has been auctioned off for Internet Service Provider (ISP) operations (e.g.  - Verizon, AT&T, etc.) Now referred to as the "700 MHz Band" - many of these new applications also require MFC filter products.  Some of these operations actually utilize the same channel allocations formerly used by those defunct UHF channels.



  Consequently, MFC has been able to transform existing filter product lines into an entirely new filter line to satisfy many of these new ISP applications, without requiring significant product modification or new product development.



  MFC also continues to serve other segments of the Broadcast industry such as FM radio, STL (TV Studio-to-Transmitter Links) and the BAS (Broadcast Auxiliary Service) band  (formerly known as the ENG (Electronic News Gathering) band.)



  Satellite - Microwave filters and IF filters for removing interference are provided to both commercial and home C-band TVRO antennas.  A variety of products are available that offer protection and or solutions to interference that affects the feedhorn, downconverter, and receiver.  A variety of filters are also available for satellite services utilizing higher frequency bands such as 12, 13 and 18 GHz.  Although economic conditions have impacted sales, management expects demand for these types of filters to continue with the proliferation of earth stations world wide and increased sources of interference.



  Mobile Radio and Data Links - MFC provides filters to a variety of mobile radio services such as cellular telephone, two way radio and paging to eliminate interference in transmit or receive equipment.  More recently there has been demand for filters and diplexers for broadband microwave applications for Voice Over Internet Protocol ("VOIP") Withwith the number of services increasing and ISP use.  The advent of license exempt applications has increased the need for interference filtering.  With the number of services increasing and our air waves becoming more congested, filters are increasingly important to many transmit operations.  



  RF and Microwave - This market encompasses both commercial and military applications.  Filters in defense applications are used for such purposes as air to ground communications, radar and land communications.  In commercial areas, filters are used to protect such equipment as receivers, transmitters, transceivers and any other electronics used for signal processing.  In addition to filters, this market is also served with MFC's Ferrosorb product line.  Ferrosorb is a microwave absorbing material available in sheets, loads and a variety of other shapes.  The product is used to offer protection by shielding signals or absorbing selective bands.



  MFC's RF/Microwave products are sold primarily to Original Equipment Manufacturers that serve the mobile radio, commercial communications and defense electronics markets.  The Company continues to invest in production engineering and infrastructure development to penetrate OEM market segments as they become popular.  MFC is concentrating its technical resources and product development efforts toward potential high volume customers as part of a concentrated effort to provide substantial long-term growth. The Company is also actively sourcing complimentary products to distribute to augment sales.

   

   In 1992, MFC's acquisition of certain assets of Chesterfield Products added an expanded line of products to enhance the RF filter line.  Many of MFC's traditional filters are components added onto a system.  Chesterfield provided MFC with the capability to manufacture miniature and subminiature filters which are components built into electronic systems.  Another Chesterfield capability has provided us with the resources to expand our filter design range down to 5 KHz.  

EXPORT CONTROLS
----------------------------



  Our products are subject to the Export Administration Regulations ("EAR") administered by the U.S.  Department of Commerce and may, in certain instances, be subject to the International Traffic in Arms Regulations ("ITAR") administered by the U.S.  Department of State.  EAR restricts the export of defense products, technical data and defense services.  We believe that we have implemented internal export procedures and controls in order to achieve compliance with the applicable U.S.  export control regulations.

ENVIRONMENTAL REGULATION
---------------------------------------------



  Compliance with federal, state and local requirements relating to the discharge of substances into the environment, the disposal of hazardous waste and other activities affecting the environment has been accomplished without material effect on the Company's liquidity and capital resources, competitive position or financial statements and management believes that such compliance will not have a material effect on the Company's liquidity and capital resources, competitive position or financial statements in the future.

BACKLOG
--------------



  At September 30, 2012,2013, the Company's total backlog of orders, which represents firm orders from customers, was $272,138$160,344 compared to $643,925$272,138 at September 30, 2011.2012.  The total Company backlog at September 30, 20122013 is scheduled to ship during fiscal 2013. 2014. The Company has been experiencing a slowdown in orders which management attributes to the specific decrease in the economic activity in the military/aerospace sector and related international markets. However, backlog is not necessarily indicative of future sales.  Accordingly, the Company does not believe that its backlog as of any particular date is representative of actual sales for any succeeding period.  



EMPLOYEES
-----------------



  At September 30, 2012,2013, the Company employed 4540 full-time and 2 part-time employees.  



RESEARCH AND DEVELOPMENT
----------------------------------------------



  The Company maintains and expects to continue to maintain an active research and development program.  The Company believes that such a program is needed to maintain its competitive position in existing markets and to provide products for emerging markets.  Costs in connection with research and development were $408,335$311,935 and $428,693$408,335 for the fiscal years 20122013 and 2011,2012, respectively.  Research and development costs are charged to operations as incurred.  



COMPETITION
--------------------



  The principal competitive factors facing both MFC are price, technical performance, service and the ability to produce in quantity to specific delivery schedules.  Based on these factors, the Company believes it competes favorably in its markets.

PART II



ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED

STOCKHOLDER MATTERS.





  The Company's securities are currently quoted on The Pink OTC Markets (www.otcmarkets.com), an electronic quotation service for securities traded over-the-counter, and the OTCBB (www.otcbb.com).  



  The following table shows the high and low closing sales prices for MFC's common stock for each full quarterly period within the two most recent fiscal years.  The information set forth was obtained from statements provided by the NASD and the OTCBB.  The quotations represent prices in the over-the-counter market between dealers in securities.  They do not include retail mark-ups, mark-downs or commissions.

Fiscal 2012		High		Low
Oct. 1, 2011 to Dec. 31, 2011	$	1.05	$	0.63
Jan. 1, 2012 to Mar. 31, 2012		1.10		0.75
Apr. 1, 2012 to June 30, 2012		1.25		0.83
July 1, 2012 to Sept. 30, 2012		1.05		0.85
Fiscal 2011		High		Low
Oct. 1, 2010 to Dec. 31, 2010	$	1.08	$	0.45
Jan. 1, 2011 to Mar. 31, 2011		1.10		0.76
Apr. 1, 2011 to June 30, 2011		1.05		0.61
July 1, 2011 to Sept. 30, 2011		1.05		0.62

  The Company had approximately 570 holders of record of its common stock at September 30, 2012.

2013.

  On June 20, 2012, the Board of Directors declared a special five cents per share cash dividend to shareholders of record on July 13, 2012 to be distributed on July 31, 2012.

  On August 3, 2011, the Board of Directors declared a special fifteen cents per share cash dividend to shareholders of record on August 19, 2011 to be distributed on September 6, 2011.



  Payment of future dividends, if any, will be at the discretion of the Board of Directors after taking into consideration various factors, including the Company's financial condition, operating results and current and anticipated cash needs.

ITEM 6.  SELECTED FINANCIAL DATA.



  The following selected financial information is derived from and should be read in conjunction with the financial statements, including the notes thereto, appearing in Item 8.  - "Financial Statements and Supplemental Data."

Five Year Summary of Financial Data

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

OF OPERATIONS



  Microwave Filter Company, Inc.  (MFC) operates primarily in the United States and principally in one industry.  The Company extends credit to business customers, including original equipment manufacturers (OEMs), distributors and other end users, based upon ongoing credit evaluations.  Microwave Filter Company, Inc.  designs, develops, manufactures and sells electronic filters, both for radio and microwave frequencies, to help process signal distribution and to prevent unwanted signals from disrupting transmit or receive operations.  Markets served include cable television, television and radio broadcast, satellite broadcast, mobile radio and commercial and defense electronics.  Niagara Scientific, Inc.  (NSI), a wholly owned subsidiary, custom designs case packing machines to automatically pack products into shipping cases.  Customers are processors of food and other commodity products with a need to reduce labor cost with a modest investment and quick payback. NSI's sales consist of spare parts orders.



RESULTS OF OPERATIONS
--------------------------------------



  The following table sets forth the Company's net sales by major product group for each of the fiscal years in the two year period ended September 30, 2012.

2013.

Product group (in thousands)

Fiscal 2012

Fiscal 2011

Microwave Filter:
RF/Microwave	$	1,712	$	1,915
Satellite		1,335		1,651
Cable TV		1,281		1,377
Broadcast TV		124		98
Niagara Scientific		7		3
		----------		----------
Total	$	4,459	$	5,044
		======		======
Sales backlog at 9/30	$	272	$	644
		======		======

Fiscal 20122013 compared to fiscal 2011

2012

  Consolidated net sales for the fiscal year ended September 30, 20122013 equaled $4,458,819,$2,872,491, a decrease of $585,115$1,586,328 or 11.6%35.6%, when compared to consolidated net sales of $5,043,934$4,458,819 during the fiscal year ended September 30, 2011. The Company2012.   Net sales have been decreasing since the quarter ended June 30, 2012. It is difficult to determine precisely the cause of this systemic erosion in sales but it is conjectured that the fear engendered by the sequester of budgetary funds for the Defense Department has been experiencinghad a slowdown in ordersmajor impact on MFC’s economic environment. It should be remembered that substantial Defense cuts occurred during FY 2012 which management attributeshave affected the whole communications market place as suppliers to the specificDefense industry have made the commercial market place more competitive as they have sought to redirect their sales efforts away from Defense. Management also believes that the decrease in capital expenditures from non-defense oriented companies (such as Cable Television companies) has also contributed to the economicoverall decline and demand across all market segments served by MFC. In order to mitigate the effects of this decline in demand for our products during this difficult period, management has adopted a plan of cost reduction, as well as, an accelerated development and acquisition of new products. This coupled with an increase in promotional activity infor existing and new products will hopefully mitigate the military/aerospace sectorsystemic effects of the market place by allowing MFC to increase its market share by virtue of a plethora of products for a wider range of applications and related international markets.

for a larger customer segment.

  MFC's RF/Microwave product sales decreased $203,645$737,112 or 10.6%43.1% to $974,484 during the fiscal year ended September 30, 2013 when compared to sales of $1,711,596 during the fiscal year ended September 30, 2012 when compared to sales of $1,915,241 during the fiscal year ended September 30, 2011.2012.  MFC's RF/Microwave products are sold primarily to Original Equipment Manufacturers that serve the mobile radio, commercial communications and defense electronics markets.  The Company continues to invest in production engineering and infrastructure development to penetrate OEM market segments as they become popular.  MFC is concentrating its technical resources and product development efforts toward potential high volume customers as part of a concentrated effort to provide substantial long-term growth. The Company is also actively sourcing complimentary products to distribute to augment sales. Sales to one OEM customer represented approximately 14% of total sales for the fiscal year ended September 30, 2013 compared to approximately 21% of total sales for the fiscal year ended September 30, 2012 compared2012.

  MFC's Satellite product sales decreased $265,380 or 19.9% to approximately 18% of total sales for$1,069,987 during the fiscal year ended September 30, 2011.

  Gross profit decreased $199,992$720,735 or 10.8%43.5% to $936,699 during the fiscal year ended September 30, 2013 when compared to gross profit of $1,657,434 during the fiscal year ended September 30, 2012 when compared to2012. As a percentage of sales, gross profit of $1,857,426equaled 32.6% during the fiscal year ended September 30, 2011. The2013 compared to 37.2% during the fiscal year ended September 30, 2012.The decrease in gross profit can primarily be attributed to the lower sales volume this year when compared to the same period last year. Asyear providing a percentage of sales, gross profit equaled 37.2%smaller base to absorb overhead expenses.   
 
  Selling, general and administrative (SG&A) expenses decreased $122,266 or 7.4% to $1,526,122 during the fiscal year ended September 30, 20122013 when compared to 36.8% during the fiscal year ended September 30, 2011. The higher gross profit as a percentageSG&A expenses of sales in fiscal 2012 can primarily be attributed to product cost improvements and product sales mix.

  Selling, general and administrative (SG&A) expenses decreased $1,969 or 0.1% to $1,648,388 during the fiscal year ended September 30, 2012 when compared2012.  The decrease can primarily be attributed to SG&A expenseslower payroll and payroll related expenses. Due to the lower sales volume, the Company has been participating in the New York State Shared Work Program which allows employers to reduce the hours of $1,650,357 during the fiscal year ended September 30, 2011.all or a particular group of employees. The employees whose hours are reduced can receive partial unemployment insurance benefits to supplement their lost wages or elect to use accrued vacation. As a percentage of sales, SG&A expenses equaledincreased to 53.1% during fiscal 2013 compared to 37.0% during fiscal 2012 compared to 32.7% during fiscal 2011 primarily due to the lower sales volume this year when compared to the same period last year.

  Income

   The Company recorded a loss from operations equaled $9,046of $589,423 for the fiscal year ended September 30, 20122013 compared to income from operations of $207,069$9,046 during the fiscal year ended September 30, 2011.2012.  The decrease can primarily be attributed to the lower sales volume this year when compared to the same period last year.

  Other income increased $19,699decreased $27,308 to $865 for the fiscal year ended September 30, 2013 when compared to other income of $28,173 for the fiscal year ended September 30, 2012 when compared to other income of $8,474 for the fiscal year ended September 30, 2011.2012. The increasedecrease can be attributed to a $20,000 gain on the sale of a fixed asset.

asset last year and interest expense of $5,590 during fiscal 2013.  

  The Company recorded a benefit for income taxes of $37,085 for the fiscal year ended September 30, 2013 compared to a benefit for income taxes of $38,582 for the fiscal year ended September 30, 2012 compared to a benefit for income taxes of $27,372 for the fiscal year ended September 30, 2011.2012. The benefit for the current fiscal year can be attributed to a New York State qualified research expenses tax credit. Any provision for income tax expense was fully offset by a reversal of a portion of the Company's valuation allowance. Any benefit for losses has been subject to a valuation allowance since the realization of the deferred tax benefit is not considered more likely than not. As required by FASB ASC 740 (Prior Authoritative Literature: SFAS 109, Accounting for Income Taxes), the Company has evaluated the positive and negative evidence bearing upon the realization of its deferred tax assets. The Company has determined that, at this time, it is more likely than not that the Company will not realize all of the benefits of federal and state deferred tax assets, and, as a result, a valuation allowance was established.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------------------------------



  MFC defines liquidity as the ability to generate adequate funds to meet its operating and capital needs.  The Company's primary source of liquidity has been funds provided by operations.

September 30

		2012		2011
Cash & cash equivalents	$	1,023,017	$	1,258,885
Working capital	$	1,549,136	$	1,658,110
Current ratio		5.10 to 1		3.59 to 1
Long-term debt	$	0	$	0

   Cash and cash equivalents decreased $235,868$83,058 to $939,959 at September 30, 2013 when compared to $1,023,017 at September 30, 2012 when compared to $1,258,885 at September 30, 2011.2012. The decrease was a result of $86,598$502,037 in net cash provided byused in operating activities $192,398primarily due to the net loss, $74,345 in net cash used for capital expenditures $129,273and $493,324 in net cash used to pay a special cash dividend and $795 in net cash used to purchase treasury stock.

provided by financing activities.

 The net decrease of $88,669$62,222 in accounts receivable at September 30, 2012,2013, when compared to September 30, 2011,2012, can be attributable to the lower shipments during the quarter ended September 30, 20122013 when compared to the quarter ended September 30, 2011.2012. Sales for the quarter ended September 30, 20122013 equaled $968,356$787,756 compared to sales of $1,311,555$968,356 for the quarter ended September 30, 2011.

2012.

  The net decreaseincrease of $38,186$37,425 in inventories at September 30, 2012,2013, when compared to September 30, 2011, can be attributable to the addition of new products and lower than expected sales order backlog this year when compared to last year.

  The decrease of $103,210 in accounts payable at September 30, 2012, when compared to September 30, 2011, can primarily be attributed to timing and the lower inventories at September 30, 2012 when compared to September 30, 2011.
orders.

  The decrease of $78,245$77,926 in accrued compensated absences at September 30, 2012,2013, when compared to September 30, 2011,2012, can primarily be attributed to accrued vacation used or paid during the fiscal year ended September 30, 2012.2013. Due to the lower sales volume, the Company has been participating in the New York State Shared Work Program which allows employers to reduce the hours of all or a particular group of employees. The employees whose hours are reduced can receive partial unemployment insurance benefits to supplement their lost wages or elect to use accrued vacation.

  On July 2, 2013, Microwave Filter Company, Inc. (the “Company”) entered into a Ten Year Term Loan with KeyBank National Association in the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00). The decreaseamount of $52,346 in other current liabilitiesall advances outstanding together with accrued interest thereon shall be due and payable on July 2, 2023 (“Maturity”). The Company shall pay interest on the outstanding principal balance of this Note at the rate per annum equal to 4.5%. The net proceeds from the Term Loan will be available to provide working capital as needed. The total amount outstanding as of September 30, 2013 and 2012 when comparedwas $493,468 and $0, respectively.

  The Company has secured this Note by: (a) a Mortgage, Assignment of Rents, Security Agreement and Fixture Filing which creates a 1st lien on real property situated in the Town of Dewitt, County of Onondaga, and State of New York and known as 6743 Kinne Street, East Syracuse, New York; (b) a General Assignment of Rents and Leases; (c) an Environmental Compliance and Indemnification; and (d) such other security as may now or hereafter be given to September 30, 2011, can primarily be attributedLender as collateral for the payment of a profit sharing contribution of $50,000 which was accrued at September 30, 2011.

  Capital expenditures consisted primarily of machinery and equipment.

loan.

  At September 30, 2012,2013, the Company had unused aggregate lines of credit totaling $750,000 collateralized by all inventory, equipment and accounts receivable.



  Management believes that its working capital requirements for the foreseeable future will be met by its existing cash balances, future cash flows from operations and its current credit arrangements.

ITEM 9A.  CONTROLS AND PROCEDURES





EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES



  The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report.  Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures were effective as of the end of the period covered by this report.



CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING



  There have been no changes in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.



MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING



  The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the exchange act.



  Under the supervision and with the participation of the Company's management, including our principal executive officer and principal financial officer, the Company conducted an evaluation of its internal control over financial reporting based on criteria established in the framework in "Internal Control-Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on this evaluation, the Company's management concluded and certifies that its internal control over financial reporting was effective as of September 30, 2012.

2013.

  This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Our report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management's report in this annual report.





ITEM 9B.  OTHER INFORMATION



  None.

PART III



ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.



  The names of, and certain information with respect to, the directors of MFC

is set forth below:

				Common Shares
				Actually or		Percent
				Beneficially		of
Director		Principal occupation		Owned 12/1/12		Class
ROBERT R. ANDREWS (a)(b)(c)(d) Age 72 Director since 1992		Mr. Andrews is the Chairman of the Board and past President of Morse Manufacturing Co., Inc., East Syracuse, N.Y. which produces specialized material handling equipment and has served in that capacity since prior to 1985. He received a B.A degree from Arkansas University and has served as Vice President and a director of the Manufacturers' Association of Central New York, President of the Citizens Foundation, a Trustee of Dewitt Community Church, director of the Salvation Army and Chairman of the Business and Industry Council of Onondaga Community College. Mr. Andrews was elected Chairman of the Board of Directors of Microwave Filter Company, Inc. on November 17, 2004.		1,214		*
ANNE TINDALL (a)(b) Age 59 Director since 2012		Ms. Tindall is the founder and President of Employee Management Strategies, Inc. in Fayetteville, New York which provides a variety of comprehensive on and off-site professional and human resource-related services to employers. Ms. Tindall is a graduate of the State University College at Buffalo with a Bachelor of Arts in Human Development - Family and Community Relations, in addition to a number of human resource-related courses and seminars.		0
SIDNEY CHONG (a)(b)(c) Age 71 Director since 1995		Mr. Chong was a corporate accountant for Carrols Corp. in Syracuse prior to his retirement in January 2011. Prior to joining Carrols Corp., he was a Senior Accountant with Price Waterhouse and Co. in New York City. Mr. Chong has a Bachelor of Science degree in accounting from California State University.		1,000		*
CARL F. FAHRENKRUG, PE (a) Age 70 Director since 1984		Mr. Fahrenkrug was appointed President and Chief Executive Officer of MFC on October 7, 1992. He has also served as President and Chief Executive Officer of NSI since prior to 1986. He served as Vice President of Engineering at Microwave Systems, Inc., Syracuse, N.Y. from 1972-1976. Mr. Fahrenkrug has a B.S. and M.S. in Engineering and an MBA from Syracuse University.		72,298		2.8%