In a filing with the SEC on May 26, 2010, Mill Valley, CA-based Lawndale Capital Management, LLC and its affiliates (“Lawndale”) filed an amended form 13D in P&F Industries ("PFIN") disclosing a letter sent to P&F’s Board of Directors and Lawndale’s vote of 272,812 shares (equal to 7.5% of eligible shares) to “WITHHOLD authority for ALL NOMINEES” at P&F’s June 3, 2010 annual meeting.

Lawndale’s letter discusses its rationale for its Withhold vote and notes that leading independent proxy advisory services, Proxy Governance and RiskMetrics also recommended voting to “WITHHOLD ALL” and “WITHHOLD Dubofsky”, respectively. Proxy Governance’s recommendation analysis is attached to Lawndale’s 13D filing exhibit.

P&F Industries, Inc., through its two wholly-owned subsidiaries, Continental Tool Group Inc. and Countrywide Hardware, Inc., manufactures and/or imports air-powered tools and builders' hardware. Its products are sold under their own trademarks, as well as under the private labels of major manufacturers and retailers. Further information on P&F can be found at its corporate website:http://www.pfina.com/

The Item 4 language of the filing is set forth, below, and the actual P&F 13D filing and letter exhibit by Lawndale Capital Management can be found in SEC EDGAR filings for PFIN at:http://www.sec.gov/Archives/edgar/data/75340/000093583610000159/pf1...

Item 4. Purpose of Transaction

As disclosed in prior filings, the Filers ("Lawndale") have been in contact with P&F Industries ("PFIN") management and members of PFIN’s Board of Directors (the “Board”) regarding certain operational and corporate governance concerns that include, but are not limited to, what Lawndale believes to be excessive compensation paid to PFIN’s Chairman and CEO, Richard Horowitz, for poor performance. This further leads to serious concerns regarding the Board’s current composition and independence.

On May 25, 2010, Lawndale sent PFIN’s Board a letter (a copy of which is attached at Exhibit B hereto, and incorporated by reference to this filing) informing them of Lawndale's intent to vote 272,812 shares, equal to 7.5% of eligible shares to "WITHOLD authority for ALL NOMINEES" on Proposal 1, Election of Directors, at PFIN’s annual meeting scheduled for June 3 2010 and noting independent proxy advisory services, Proxy Governance and RiskMetrics also recommended voting to “WITHHOLD ALL” and WITHHOLD Dubofsky”, respectively. (a copy of the Proxy Governance recommendation is attached as part of this exhibit)

As disclosed in greater detail in the letter, among the reasons for its vote, Lawndale cited the following:

For P&F’s Small Size And Business Structure, Horowitz’ Compensation Is Wholly Inappropriate

• The Only Shareowner That Has Benefited From The Horowitz Era Has Been Horowitz

• P&F’s Board Requires Increased Independence Via New Directors From Outside “The Club”

At the invitation of the Nominating Committee Chairman, Marc Utay, in February 2010 Lawndale submitted the names and backgrounds of five highly qualified and independent individuals for possible addition to P&F’s Board. Although these nominations were made long before the deadline for setting PFIN’s slate and proxy for the upcoming June 3 Annual Meeting, none of Lawndale’s suggested nominees appeared on PFIN’s final Proxy. Lawndale was recently informed that two of its nominees have been invited to meet with certain members of the Board in the week following PFIN’s Annual Meeting.

It is the view of Lawndale that a board comprised of qualified directors who are independent, and whose interests are better aligned with shareholders via meaningful purchased equity ownership, would more objectively and aggressively oversee the compensation and corporate acquisition decisions of PFIN.

Lawndale believes the public market value of PFIN is undervalued by not adequately reflecting the value of PFIN’s business segments and other assets, including certain long-held real estate.

While Lawndale acquired the Stock solely for investment purposes, Lawndale has been and may continue to be in contact with PFIN management, members of PFIN’s Board, other significant shareholders and others regarding alternatives that PFIN could employ to maximize shareholder value. Lawndale may from time to time take such actions, as it deems necessary or appropriate to maximize its investment in the Company's shares. Such action(s) may include, but is not limited to, buying or selling the Company's Stock at its discretion, communicating with the Company's shareholders and/or others about actions which may be taken to improve the Company's financial situation or governance policies or practices, as well as such other actions as Lawndale, in its sole discretion, may find appropriate.


For Further Information Contact:

Andrew Shapiro
President
Lawndale Capital Management, LLC
591 Redwood Highway #2345
Mill Valley, CA 94941
phone- 415-389-VALU (8258)
fax- 415-389-0180
e-mail- aeshapiro@lawndalecap.com