---

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2007

OR



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

For the transition period from  to

Commission File Number 0-511

COBRA ELECTRONICS CORPORATION

(Exact name of Registrant as specified in its Charter)



|                         |  |                                     
|------------------------ |  | ------------------------------------
|DELAWARE                 |  | 36-2479991                          
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)



|                                            |  |           
|------------------------------------------- |  | ----------
|6500 WEST CORTLAND STREET CHICAGO, ILLINOIS |  | 60707     
|(Address of principal executive offices)    |  | (Zip Code)

Registrants telephone number, including area code: (773) 889-8870

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 whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer x

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

YES ̈NO  x

Number of shares of Common Stock of Registrant outstanding as of
August 3, 2007: 6,471,280



---



---

TABLE OF CONTENTS



|          |  |                                                                                       |  |         
|--------- |  | ------------------------------------------------------------------------------------- |  | --------
|          |  |                                                                                       |  | Page No.
|PART I    |  | FINANCIAL INFORMATION                                                                 |  |         
|          |  |                                                                                      
|Item 1    |  | Financial Statements                                                                  |  | 3       
|          |  |                                                                                      
|Item 2    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 18      
|          |  |                                                                                      
|Item 3    |  | Qualitative and Quantitative Disclosures About Market Risk                            |  | 26      
|          |  |                                                                                      
|Item 4    |  | Controls and Procedures                                                               |  | 27      
|          |  |                                                                                      
|PART II   |  | OTHER INFORMATION                                                                     |  |         
|          |  |                                                                                      
|Item 1 A  |  | Risk Factors                                                                          |  | 28      
|          |  |                                                                                      
|Item 4    |  | Submission of Matters to a Vote of Security Holders                                   |  | 28      
|          |  |                                                                                      
|Item 6    |  | Exhibits                                                                              |  | 28      
|          | 
|SIGNATURE |  | 29                                                                                   



2



---

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Cobra Electronics Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)



|                                            |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|------------------------------------------- |  | ----------------------------- | ------ | - | --------------------------- | - | ------ | ------------ |  | - | ------------ | - |  | - | ------ | -
|                                            |  | Three Months Ended(Unaudited) |        |   | Six Months Ended(Unaudited) |  
|                                            |  | June 30,2007                  |        |   | June 30,2006                |   |        | June 30,2007 |  |   | June 30,2006 |  
|Net sales                                   |  | $                             | 39,215 |   |                             | $ | 39,586 |              |  | $ | 71,251       |   |  | $ | 64,893 |  
|Cost of sales                               |  |                               | 30,835 |   |                             |   | 35,413 |              |  |   | 54,783       |   |  |   | 55,698 |  
|                                            |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Gross profit                                |  |                               | 8,380  |   |                             |   | 4,173  |              |  |   | 16,468       |   |  |   | 9,195  |  
|Selling, general and administrative expense |  |                               | 9,632  |   |                             |   | 8,117  |              |  |   | 18,668       |   |  |   | 14,705 |  
|                                            |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Loss from operations                        |  |                               | (1,252 | ) |                             |   | (3,944 | )            |  |   | (2,200       | ) |  |   | (5,510 | )
|                                            |  |                               |        |  
|Other expense                               |  |                               | (53    | ) |                             |   | (100   | )            |  |   | (115         | ) |  |   | (196   | )
|                                            |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Loss before income taxes                    |  |                               | (1,305 | ) |                             |   | (4,044 | )            |  |   | (2,315       | ) |  |   | (5,706 | )
|Tax benefit                                 |  |                               | 874    |   |                             |   | 1,358  |              |  |   | 1,172        |   |  |   | 1,892  |  
|Minority interest                           |  |                               | (3     | ) |                             |   |       |              |  |   | (11          | ) |  |   |       |  
|                                            |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Net loss                                    |  | $                             | (434   | ) |                             | $ | (2,686 | )            |  | $ | (1,154       | ) |  | $ | (3,814 | )
|                                            |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Net loss per common share:                  |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Basic                                       |  | $                             | (0.07  | ) |                             | $ | (0.41  | )            |  | $ | (0.18        | ) |  | $ | (0.59  | )
|Diluted                                     |  | $                             | (0.07  | ) |                             | $ | (0.41  | )            |  | $ | (0.18        | ) |  | $ | (0.59  | )
|Weighted average shares outstanding:        |  |                               |        |   |                             |   |        |              |  |   |              |   |  |   |        |  
|Basic                                       |  |                               | 6,454  |   |                             |   | 6,489  |              |  |   | 6,446        |   |  |   | 6,489  |  
|Diluted                                     |  |                               | 6,454  |   |                             |   | 6,489  |              |  |   | 6,446        |   |  |   | 6,489  |  
|Dividends declared per common share         |  | $                             |       |   |                             | $ |       |              |  | $ | 0.16         |   |  | $ | 0.16   |  

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



3



---

Cobra Electronics Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)



|                                                                                              |  |               |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                              |  | (Unaudited)   |        
|                                                                                              |  | June 30, 2007 |         |   | December 31,2006 |  
|ASSETS                                                                                        |  |               |         |   |                  |   |         |  
|Current assets:                                                                               |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                     |  | $             | 3,061   |   |                  | $ | 1,878   |  
|Receivables, less allowance for claims and doubtful accounts of $181 in 2007 and $282 in 2006 |  |               | 20,594  |   |                  |   | 28,320  |  
|Inventories net, (primarily finished goods)                                                   |  |               | 29,792  |   |                  |   | 29,039  |  
|Deferred income taxes                                                                         |  |               | 7,306   |   |                  |   | 7,196   |  
|Other current assets                                                                          |  |               | 7,874   |   |                  |   | 6,810   |  
|                                                                                              |  |               |         |   |                  |   |         |  
|Total current assets                                                                          |  |               | 68,627  |   |                  |   | 73,243  |  
|                                                                                              |  |              
|Property, plant and equipment, at cost:                                                       |  |               |         |   |                  |   |         |  
|Buildings and improvements                                                                    |  |               | 5,436   |   |                  |   | 5,433   |  
|Tooling and equipment                                                                         |  |               | 20,845  |   |                  |   | 20,079  |  
|                                                                                              |  |               |         |   |                  |   |         |  
|                                                                                              |  |               | 26,281  |   |                  |   | 25,512  |  
|Accumulated depreciation                                                                      |  |               | (19,244 | ) |                  |   | (18,117 | )
|Land                                                                                          |  |               | 230     |   |                  |   | 230     |  
|                                                                                              |  |               |         |   |                  |   |         |  
|Net property, plant and equipment                                                             |  |               | 7,267   |   |                  |   | 7,625   |  
|                                                                                              |  |              
|Other assets:                                                                                 |  |               |         |   |                  |   |         |  
|Cash surrender value of officers life insurance policies                                     |  |               | 4,483   |   |                  |   | 3,968   |  
|Goodwill                                                                                      |  |               | 11,858  |   |                  |   | 11,997  |  
|Intangible assets                                                                             |  |               | 19,101  |   |                  |   | 19,503  |  
|Other assets                                                                                  |  |               | 403     |   |                  |   | 422     |  
|                                                                                              |  |               |         |   |                  |   |         |  
|Total other assets                                                                            |  |               | 35,845  |   |                  |   | 35,890  |  
|                                                                                              |  |               |         |   |                  |   |         |  
|Total assets                                                                                  |  | $             | 111,739 |   |                  | $ | 116,758 |  
|                                                                                              |  |               |         |   |                  |   |         |  

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



4



---

Cobra Electronics Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)



|                                                                                                   |  |              |         |   |                  |   |         |  
|-------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                                                                                   |  | (Unaudited)  |        
|                                                                                                   |  | June 30,2007 |         |   | December 31,2006 |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                               |  |              |         |   |                  |   |         |  
|Current liabilities:                                                                               |  |              |         |   |                  |   |         |  
|Accounts payable                                                                                   |  | $            | 5,983   |   |                  | $ | 6,097   |  
|Accrued salaries and commissions                                                                   |  |              | 591     |   |                  |   | 760     |  
|Accrued advertising and sales promotion costs                                                      |  |              | 1,446   |   |                  |   | 2,292   |  
|Accrued product warranty costs                                                                     |  |              | 1,442   |   |                  |   | 1,963   |  
|Accrued income taxes                                                                               |  |              | 113     |   |                  |   | 1,650   |  
|Current maturities of long-term debt                                                               |  |              | 1,430   |   |                  |   | 1,060   |  
|Other accrued liabilities                                                                          |  |              | 4,602   |   |                  |   | 5,279   |  
|                                                                                                   |  |              |         |   |                  |   |         |  
|Total current liabilities                                                                          |  |              | 15,607  |   |                  |   | 19,101  |  
|                                                                                                   |  |              |         |   |                  |   |         |  
|Non-current liabilities:                                                                           |  |              |         |   |                  |   |         |  
|Long-term bank debt                                                                                |  |              | 15,702  |   |                  |   | 15,614  |  
|Deferred compensation                                                                              |  |              | 6,257   |   |                  |   | 5,858   |  
|Deferred income taxes                                                                              |  |              | 5,276   |   |                  |   | 5,337   |  
|Other long term liabilities                                                                        |  |              | 904     |   |                  |   | 1,075   |  
|                                                                                                   |  |              |         |   |                  |   |         |  
|Total non-current liabilities                                                                      |  |              | 28,139  |   |                  |   | 27,884  |  
|                                                                                                   |  |              |         |   |                  |   |         |  
|Total liabilities                                                                                  |  |              | 43,746  |   |                  |   | 46,985  |  
|Minority interest                                                                                  |  |              | 8       |   |                  |   | 4       |  
|                                                                                                   |  |             
|Shareholders equity:                                                                              |  |              |         |   |                  |   |         |  
|Preferred stock, $1 par value, shares authorized 1,000,000; none issued                            |  |              |        |   |                  |   |        |  
|Common stock, $.33 1/3 par value, 12,000,000 shares authorized, 7,039,100 issued for 2007 and 2006 |  |              | 2,345   |   |                  |   | 2,345   |  
|Paid-in capital                                                                                    |  |              | 19,929  |   |                  |   | 19,824  |  
|Retained earnings                                                                                  |  |              | 49,425  |   |                  |   | 51,584  |  
|Accumulated other comprehensive income                                                             |  |              | 106     |   |                  |   | 11      |  
|                                                                                                   |  |              |         |   |                  |   |         |  
|                                                                                                   |  |              | 71,805  |   |                  |   | 73,764  |  
|Treasury stock, at cost (579,192 shares for 2007 and 605,662 shares for 2006)                      |  |              | (3,820  | ) |                  |   | (3,995  | )
|                                                                                                   |  |              |         |   |                  |   |         |  
|Total shareholders equity                                                                         |  |              | 67,985  |   |                  |   | 69,769  |  
|                                                                                                   |  |              |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                         |  | $            | 111,739 |   |                  | $ | 116,758 |  
|                                                                                                   |  |              |         |   |                  |   |         |  

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



5



---

Cobra Electronics Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)



|                                                                               |  |                             |        |   |              |   |        |  
|------------------------------------------------------------------------------ |  | --------------------------- | ------ | - | ------------ | - | ------ | -
|                                                                               |  | Six Months Ended(Unaudited) |       
|                                                                               |  | June 30,2007                |        |   | June 30,2006 |  
|Cash flows from operating activities:                                          |  |                             |        |   |              |   |        |  
|Net loss                                                                       |  | $                           | (1,154 | ) |              | $ | (3,814 | )
|Adjustments to reconcile net loss to net cash flows from operating activities: |  |                             |        |   |              |   |        |  
|Depreciation and amortization                                                  |  |                             | 3,767  |   |              |   | 2,648  |  
|Impairment of product software                                                 |  |                             |       |   |              |   | 2,757  |  
|Deferred income taxes                                                          |  |                             | (171   | ) |              |   | (1,504 | )
|(Gain) loss on cash surrender value (CSV) life insurance                       |  |                             | (220   | ) |              |   | 346    |  
|Stock-based compensation                                                       |  |                             | 91     |   |              |   | 26     |  
|Tax benefit from stock options exercised                                       |  |                             | 19     |   |              |   |       |  
|                                                                               |  |                            
|Changes in assets and liabilities:                                             |  |                             |        |   |              |   |        |  
|Receivables                                                                    |  |                             | 7,726  |   |              |   | 7,056  |  
|Inventories                                                                    |  |                             | (753   | ) |              |   | (3,515 | )
|Other current assets                                                           |  |                             | (1,064 | ) |              |   | (896   | )
|Accounts payable                                                               |  |                             | (114   | ) |              |   | 1,763  |  
|Accrued income taxes                                                           |  |                             | (1,537 | ) |              |   | (646   | )
|Accrued liabilities                                                            |  |                             | (2,213 | ) |              |   | (2,173 | )
|Deferred compensation                                                          |  |                             | 399    |   |              |   | 407    |  
|Deferred income                                                                |  |                             | (448   | ) |              |   |       |  
|Other long term liabilities                                                    |  |                             | (171   | ) |              |   | (8     | )
|                                                                               |  |                             |        |   |              |   |        |  
|Net cash provided by operating activities                                      |  |                             | 4,157  |   |              |   | 2,447  |  
|                                                                               |  |                             |        |   |              |   |        |  
|Cash flows from investing activities:                                          |  |                             |        |   |              |   |        |  
|Capital expenditures                                                           |  |                             | (845   | ) |              |   | (916   | )
|Loan receivable                                                                |  |                             |       |   |              |   | 3,374  |  
|Premiums on CSV life insurance                                                 |  |                             | (295   | ) |              |   | (308   | )
|Intangible assets                                                              |  |                             | (1,581 | ) |              |   | (1,181 | )
|                                                                               |  |                             |        |   |              |   |        |  
|Net cash (used in) provided by investing activities                            |  |                             | (2,721 | ) |              |   | 969    |  
|                                                                               |  |                             |        |   |              |   |        |  
|Cash flows from financing activities:                                          |  |                             |        |   |              |   |        |  
|Bank borrowings                                                                |  |                             | 458    |   |              |   |       |  
|Dividends paid to shareholders                                                 |  |                             | (1,031 | ) |              |   | (1,038 | )
|Transactions related to exercise of stock options, net                         |  |                             | 170    |   |              |   |       |  
|Other                                                                          |  |                             | 30     |   |              |   |       |  
|                                                                               |  |                             |        |   |              |   |        |  
|Net cash used in financing activities                                          |  |                             | (373   | ) |              |   | (1,038 | )
|                                                                               |  |                             |        |   |              |   |        |  
|Cash provided, excluding effect of rate changes                                |  |                             | 1,063  |   |              |   | 2,378  |  
|Effect of exchange rate changes on cash and cash equivalents                   |  |                             | 120    |   |              |   | (69    | )
|                                                                               |  |                             |        |   |              |   |        |  
|Net increase in cash                                                           |  |                             | 1,183  |   |              |   | 2,309  |  
|Cash at beginning of year                                                      |  |                             | 1,878  |   |              |   | 6,704  |  
|                                                                               |  |                             |        |   |              |   |        |  
|Cash at end of period                                                          |  | $                           | 3,061  |   |              | $ | 9,013  |  
|                                                                               |  |                             |        |   |              |   |        |  
|Supplemental disclosure of cash flow information:                              |  |                             |        |   |              |   |        |  
|Cash paid during the period for:                                               |  |                             |        |   |              |   |        |  
|Interest                                                                       |  | $                           | 483    |   |              | $ | 59     |  
|Income taxes, net of refunds                                                   |  | $                           | 1,874  |   |              | $ | 332    |  

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



6



---

Cobra Electronics Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2007 and 2006

(Unaudited)

The condensed consolidated financial statements included herein have been prepared by Cobra Electronics Corporation (the Company), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in
the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The Condensed Consolidated Balance Sheet as of
December 31, 2006 has been derived from the audited consolidated balance sheet as of that date. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto
included in the Companys latest annual report on Form 10-K for the year ended December 31, 2006. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the
interim periods a fair statement of such operations. Due to the seasonality of the Companys business, the results of operations of any interim period are not necessarily indicative of the results that may be expected for a fiscal year.



|(1) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|--- | ------------------------------------------

BUSINESS  The Company
designs and markets consumer electronics products, which it sells primarily under the Cobra brand name principally in the United States, Canada and Europe. Effective October 20, 2006, the Company acquired Performance Products Limited
(PPL). PPLs products are sold under the Snooper tradename, principally in the United Kingdom, as well as elsewhere in Europe. A majority of the Companys products are purchased from overseas suppliers, primarily in China, Hong
Kong, Italy, the Philippines, South Korea and Thailand. The consumer electronics market is characterized by rapidly changing technology and certain products may have limited life cycles. Management believes that it maintains strong relationships
with its current suppliers and that, if necessary, other suppliers could be found. The extent to which a change in a supplier would have an adverse effect on the Companys business depends on the timing of the change, the product or products
that the supplier produces for the Company and the volume of that production. The Company also maintains insurance coverage that would, in certain limited circumstances, reimburse the Company for lost profits resulting from a suppliers
inability to fulfill its commitments to the Company.

PRINCIPLES OF CONSOLIDATION  The consolidated financial statements include the accounts of the
Company and its subsidiaries. Effective October 20, 2006, the consolidated financial statements also include a variable interest entity (VIE) of which Performance Products Limited (PPL) is the primary beneficiary. Except
as otherwise set forth herein, the consolidated entities are collectively referred to as the Company. All significant intercompany balances and transactions have been eliminated in consolidation. The Company operates in two business
segments, Cobra and PPL, refer to Note 2 Segment Informationfor more detail.



7



---

NEW ACCOUNTING PRONOUNCEMENTS

SFAS NO. 157  Fair Value Measurements: In September 2006, the FASB issued Financial Accounting Standard No.157, Fair Value Measurements(SFAS 157). SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements, and accordingly,
does not require any new fair value measurements. SFAS 157 is effective for Cobra beginning January 1, 2008. Cobra does not expect the provisions to have a material impact on its consolidated financial statements.

SFAS NO. 159  The Fair Value Option for Financial Assets and Financial Liabilities: In February 2007, the FASB issued Financial Accounting Standard
No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in
financial reporting that can occur when related assets and liabilities are recorded on different bases. This statement is effective for Cobra beginning January 1, 2008. Cobra does not expect SFAS 159 to have a material impact on its
consolidated financial statements.

FASB Staff Position FIN 48-1  Definition of Settlement in FASB Interpretation No. 48: In May 2007, the FASB
issued FASB Staff Position FIN 48-1 that amends FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48-1). FIN 48-1 provides guidance on how an enterprise should determine whether a tax position is effectively
settled for the purpose of recognizing previously unrecognized tax benefits. Cobra does not expect the provisions to have a material impact on its financial statements.



8



---

|(2) | SEGMENT INFORMATION
|--- | -------------------

The Company operates in two business segments. The
first segment which is designated Cobra Consumer Electronics (Cobra) is comprised of Cobra Electronics Corporation, Cobra Hong Kong and Cobra Electronics Europe Limited. The second segment which is designated as PPL includes Cobra
Electronics U.K. Limited and its wholly-owned subsidiary Performance Products Limited. The Company has separate sales departments and distribution channels for each segment, which provide all segment exclusive product lines to all customers for that
segment. Currently, there are no intersegment sales.

The tabular presentation below summarizes the financial information by business segment for the three
and six months ended June 30, 2007.



|                                            |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  
|------------------------------------------- |  | -------------------------------- | ------ | - | ------------------------------ | - | ----- | ----- |  | - | ------ | - |  | --- | ------ | - | ----- | - | ----- | - |  | - | ------ | -
|                                            |  | Three Months Ended June 30, 2007 |        |   | Six Months Ended June 30, 2007 |  
|                                            |  | COBRA                            |        |   | PPL                            |   |       | TOTAL |  |   | COBRA  |   |  | PPL |        |   | TOTAL |  
|                                            |  | (in thousands)                   |       
|STATEMENT OF OPERATIONS                     |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  
|Net sales                                   |  | $                                | 35,439 |   |                                | $ | 3,776 |       |  | $ | 39,215 |   |  | $   | 64,385 |   |       | $ | 6,866 |   |  | $ | 71,251 |  
|Cost of sales                               |  |                                  | 28,532 |   |                                |   | 2,303 |       |  |   | 30,835 |   |  |     | 50,729 |   |       |   | 4,054 |   |  |   | 54,783 |  
|                                            |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  
|Gross profit                                |  |                                  | 6,907  |   |                                |   | 1,473 |       |  |   | 8,380  |   |  |     | 13,656 |   |       |   | 2,812 |   |  |   | 16,468 |  
|Selling, general and administrative expense |  |                                  | 8,240  |   |                                |   | 1,392 |       |  |   | 9,632  |   |  |     | 15,970 |   |       |   | 2,698 |   |  |   | 18,668 |  
|                                            |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  
|(Loss) income from operations               |  |                                  | (1,333 | ) |                                |   | 81    |       |  |   | (1,252 | ) |  |     | (2,314 | ) |       |   | 114   |   |  |   | (2,200 | )
|Other (expense) income                      |  |                                  | (47    | ) |                                |   | (6    | )     |  |   | (53    | ) |  |     | (211   | ) |       |   | 96    |   |  |   | (115   | )
|                                            |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  
|(Loss) income before income taxes           |  |                                  | (1,380 | ) |                                |   | 75    |       |  |   | (1,305 | ) |  |     | (2,525 | ) |       |   | 210   |   |  |   | (2,315 | )
|Tax benefit (expense)                       |  |                                  | 790    |   |                                |   | 84    |       |  |   | 874    |   |  |     | 1,238  |   |       |   | (66   | ) |  |   | 1,172  |  
|Minority interest                           |  |                                  |       |   |                                |   | (3    | )     |  |   | (3     | ) |  |     |       |   |       |   | (11   | ) |  |   | (11    | )
|                                            |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  
|Net (loss) income                           |  | $                                | (590   | ) |                                | $ | 156   |       |  | $ | (434   | ) |  | $   | (1,287 | ) |       | $ | 133   |   |  | $ | (1,154 | )
|                                            |  |                                  |        |   |                                |   |       |       |  |   |        |   |  |     |        |   |       |   |       |   |  |   |        |  

There have been no differences in the basis of segmentation or basis of measurement of segment loss.



9



---

|(3) | ACQUISITION OF PERFORMANCE PRODUCTS LIMITED
|--- | -------------------------------------------

On October 20, 2006,
Cobra Electronics U.K. Limited, a wholly-owned subsidiary of Cobra Electronics Corporation, completed the acquisition of 100% of the issued and outstanding share capital of PPL. PPL is a provider of GPS-enabled speed camera detection systems and
personal navigation devices to consumers and retail locations based in the United Kingdom, as well as other locations in Europe.

Under the acquisition
agreement, the purchase price for the issued share capital of PPL consisted of $21.2 million paid in cash at the closing of the transaction. The former shareholders of PPL were eligible to receive additional cash consideration of up to approximately
$6.5 million based on the achievement of certain performance targets by PPL for the twelve month period ended March 31, 2007 (the first earn-out period) and up to approximately $9.4 million for the fourteen month period ending May 31, 2008
(the second earn-out period). No additional consideration was paid to the former shareholders for this first earn-out period; the former shareholders are eligible to recapture all or a portion of this first earn-out payment should the performance in
the second earn-out period exceed the performance targets established for the payment of the entire second earn-out. Additionally, the former shareholders could earn additional consideration if the performance of Performance Products exceeds certain
cumulative targets for the combined earn-out periods.

The acquisition was funded from borrowings under an Amended and Restated Loan Agreement between
LaSalle Bank, National Association, as agent for the lenders, and the Company dated October 19, 2006.

The following table summarizes the estimated
fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):



|                            |  |   |        |  
|--------------------------- |  | - | ------ | -
|Accounts receivable         |  | $ | 2,080  |  
|Inventory                   |  |   | 2,343  |  
|Other current assets        |  |   | 760    |  
|Property, plant & equipment |  |   | 1,062  |  
|Intangible assets           |  |   | 11,816 |  
|Goodwill                    |  |   | 11,997 |  
|                            |  |   |        |  
|Total assets acquired       |  |   | 30,058 |  
|                            |  |   |        |  
|Accounts payable            |  |   | 1,530  |  
|Deferred income             |  |   | 616    |  
|Other current liabilities   |  |   | 1,660  |  
|Deferred income - long-term |  |   | 344    |  
|Deferred income taxes       |  |   | 4,010  |  
|                            |  |   |        |  
|Total liabilities assumed   |  |   | 8,160  |  
|                            |  |   |        |  
|Net assets acquired         |  | $ | 21,898 |  
|                            |  |   |        |  
|PURCHASE PRICE RECAP:       |  |   |        |  
|Cash                        |  | $ | 21,209 |  
|Assumed debt                |  |   | 36     |  
|Direct acquisition costs    |  |   | 1,831  |  
|Working capital adjustment  |  |   | (1,178 | )
|                            |  |   |        |  
|Total purchase price        |  | $ | 21,898 |  
|                            |  |   |        |  



10



---

|(4) | STOCK-BASED COMPENSATION
|--- | ------------------------

The Company has five Stock Option Plans 
2002 Outside Directors Plan, 2000 Outside Directors Plan, Employee Stock Option Plans of 2000, 1998, and 1997 (the Plans). Under the terms of the Plans, the consideration received by the Company upon exercise of the options may be paid
in cash or by the surrender and delivery to the Company of previously owned shares of its common stock, or by a combination thereof. The optionee is credited with the fair market value of any stock surrendered and delivered as of the exercise date.
Options become exercisable in annual 25 percent increments commencing twelve months after the date of grant.

Prior to January 1, 2006, the Company
accounted for its equity-based awards in accordance with the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations, as permitted by SFAS
No. 123, Accounting for Stock-Based Compensation (SFAS 123). The Company did not recognize stock-based compensation cost in its Consolidated Statement of Operations prior to January 1, 2006, since the options granted had
an exercise price equal to the market value of the common stock on the grant date.

Effective January 1, 2006, the Company adopted the fair value
recognition provision of SFAS No. 123 (revised 2004), Share-Based Payment (SFAS 123R)using the modified-prospective-transition method. Under this transition method, compensation cost recognized includes compensation costs
for all share-based payments granted prior to, but not vested as of January 1, 2006 based on the fair value at grant date estimated in accordance with SFAS 123. The Company awarded 195,000 options with a fair value of $5.23 per share to
employees in March 2007. The Company did not grant any stock-based awards during the twelve-month period ended December 31, 2006. The stock-based compensation expense for the three and six months ended June 30, 2007 totaled $43,000 and
$91,000, respectively. Stock-based compensation expense totaled $6,000 and $26,000, respectively, for the three and six months ended June 30, 2006.

Michael Smith, Chief Financial Officer, exercised 21,470 options with an exercise price of $6.56 per share and an average market price of $10.64 per share in the first half of 2007. Jim Bazet, Chief Executive Officer, exercised 5,000
options with an exercise price of $5.63 per share and an average market price of $10.35 per share in the first half of 2007.

The fair value of each option
award is estimated on the grant date using the Black-Scholes-Merton option pricing model and the assumptions at June 30, 2007 and 2006 are shown in the following table:



|                        |  |           |   |  |           |  
|----------------------- |  | --------- | - |  | --------- | -
|                        |  | 2007      |   |  | 2006      |  
|Risk-free interest rate |  | 4.0  4.6 | % |  | 4.0  4.3 | %
|Expected life           |  | 10 years  |   |  | 10 years  |  
|Expected volatility     |  | 40-43     | % |  | 42-43     | %

758,000 and 601,000 options were issued and outstanding at June 30, 2007 and 2006 and 555,000 and 586,000
options were exercisable at June 30, 2007 and 2006.



11



---

|(5) | INCOME TAXES
|--- | ------------

The Company provides for income taxes under the asset and
liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are recorded based on the expected tax effects of future taxable income or deductions resulting from differences in the financial statement and tax bases
of assets and liabilities. A valuation allowance is recorded when necessary to reduce net deferred tax assets to the amount considered more likely than not to be realized.

For the three-month and six-month periods ending June 30, 2007, the Company recorded a tax benefit of $874,000 and $1.2 million, respectively, compared to a $1.4 million and $1.9 million benefit, respectively,
for those same periods in 2006. The effective tax rate for the second quarter of 2007 was 67 percent and 33.6 percent for the second quarter of 2006. The higher income tax rate compared to 2006 resulted from combining no tax for CEEL, which had
substantial income for 2007 and a substantial loss in 2006, with a tax benefit for Cobra US, which had a less substantial loss for 2007 than 2006. The lack of tax expense at CEEL in the second quarter of 2007 reflected the availability of net
operating loss carryforwards in that jurisdiction. For the six-month period ended June 30, the effective tax benefit rate was 50.6 percent for 2007 and 33.2 percent for 2006. The increase in 2007 reflected CEEL income with no tax expense
compared to a loss in the prior year coupled with a smaller Cobra US loss.

The Financial Accounting Standards Board (FASB) issued FASB
Interpretation 48 Accounting for Uncertainty in Income Taxes (FIN 48) on July 13, 2006. FIN 48 clarifies SFAS No. 109, Accounting for Income Taxes by providing the criteria a tax position must satisfy for some or
all of the tax benefit to be recognized in the financial statements. FIN 48 was effective for fiscal years beginning after December 15, 2006.

FIN 48
prescribes a recognition threshold and measurement attribute for the financial statement recognition and measure of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest
and penalties, accounting in interim periods, disclosure and transition.

In the first quarter of 2007, the Company adopted FASB Interpretation No. 48
(FIN 48), Accounting for Uncertainty in Income Taxes. The total amount of unrecognized tax benefits as of January 1, 2007 was approximately $230,000, all of which would impact the effective tax rate if recognized. A $28,000
decrease in the unrecognized tax liability was recorded as an increase to retained earnings as of January 1, 2007.

The total amounts of accrued
interest and penalties as of January 1, 2007 were approximately $10,000 and $5,500, respectively. The Companys policy is to include interest and penalties in income tax expense.

One of the Companys uncertain tax positions, research and development credits from 2003-2005, resulted in an additional tax expense of approximately $15,000 due to
the close of the IRS audit exam of 2004-2005 in April 2007. This amount was recorded as income tax expense during the second quarter. No additional significant changes in the Companys tax positions are expected in the next twelve months.

The IRS completed its examination of the 2004 and 2005 federal tax returns in April 2007. The 2003 tax year still remains open for examination. The tax
years 2000 through 2006 remain open to examination by major state taxing jurisdictions. The major foreign jurisdiction in which the Company files income tax returns is the United Kingdom. The 2004 through 2006 tax years remain open to examination in
this jurisdiction.



12



---

|(6) | FINANCING ARRANGEMENTS
|--- | ----------------------

On January 31, 2002, the Company executed a
new three-year Revolving Credit Agreement (Credit Agreement) with three financial institutions. In November 2005, the term of the agreement was amended to January 31, 2007. In October 2006, in connection with the PPL acquisition,
the Credit Agreement was amended and restated for a five-year term and maximum loan limit of $53.6 million, including the $40 million revolver, and a $7.0 million Term Loan. The balance of $6.6 million was for a Delayed-Draw Term Loan available
until November 15, 2007 that could only be used to fund the first earn-out payment of up to approximately $6.5 million under the PPL purchase agreement which was contingent upon PPLs operating performance for the twelve-month period
ending March 31, 2007. At the Companys option, the revolver may be increased to $50 million upon sixty days advance notice. Borrowings and letters of credit issued under the Credit Agreement are secured by substantially all of the assets
of the Company.

The amended and restated credit agreement continues to allow the Company to pay dividends and distributions on its stock, and repurchases
of its stock, up to $1.2 million per calendar year.

The amended and restated credit agreement contained certain financial and other covenants, including
but not limited to, a Tangible Net Worth Minimum, a Fixed Charge Coverage Ratio and a Debt-to-EBITDA Ratio. The revolver portion of the credit agreement was also subject to an unused line fee of 37.5 basis points. Prior to the execution of the
Waiver and Amendment of July 26, 2007 (discussed below), loans outstanding on the revolver bore interest, at the Companys option, at the prime rate plus an applicable margin or LIBOR plus an applicable margin. The Company elected the
LIBOR option on the $7.0 million Term Loan and entered into a 5-year interest rate swap in January 2007, as required by the credit agreement, which effectively fixed the total interest rate at 5.34 percent plus applicable basis points, currently 225
points, or a total interest rate of 7.59 percent. The $7.0 million Term Loan was subject to quarterly installment payments and mandatory prepayments based on certain asset sales, excess cash flow and issuance of equity or debt.

At June 30, 2007, the Company had interest bearing debt outstanding of $17.1 million, consisting of the $6.5 million term loan and $10.6 million in the Revolver. As
of June 30, 2007, availability was approximately $14.3 million under the revolving credit line based on asset advance formulas.

On July 26,
2007, the Company entered into a Waiver and Amendment to the loan agreement pursuant to which its lenders waived certain covenant violations that would have otherwise occurred with respect to the quarter ended June 30, 2007 due to the Company
not achieving the required EBITDA level and Debt-to-EBITDA ratio, as defined in the revolving credit agreement. This amendment also amended the Debt-to-EBITDA Ratio covenant and Fixed Charge Coverage Ratio covenant and increased the applicable
margin used to calculate the interest rate charged. In addition, the amendment provides that the Company is required to have excess availability under the credit agreement of not less than $5 million at all times. As of July 1, 2007, the
interest on LIBOR rate loans is LIBOR plus 225 points compared to the LIBOR plus 175 points prior to the amendment. The amendment also eliminated the delayed draw term loan facility that was in place to pay the first earn-out payment to the former
shareholders of Performance Products since the required performance for this payment was not achieved.



13



---

|(7) | PURCHASE ORDERS AND COMMITMENTS
|--- | -------------------------------

At June 30, 2007 and 2006, the
Company had outstanding inventory purchase orders with suppliers totaling approximately $37.6 million and $35.5 million, respectively.



|(8) | LOSS PER SHARE
|--- | --------------



|                                                                   |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|------------------------------------------------------------------ |  | ----------------------------- | --------- | - | --------------------------- | - | --------- | ------------ |  | - | ------------ | - |  | - | --------- | -
|                                                                   |  | Three Months Ended(Unaudited) |           |   | Six Months Ended(Unaudited) |  
|                                                                   |  | June 30,2007                  |           |   | June 30,2006                |   |           | June 30,2007 |  |   | June 30,2006 |  
|Basic loss per share:                                              |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|Net loss available to common shareholders (in thousands)           |  | $                             | (434      | ) |                             | $ | (2,686    | )            |  | $ | (1,154       | ) |  | $ | (3,814    | )
|Weighted-average shares outstanding                                |  |                               | 6,454,209 |   |                             |   | 6,489,247 |              |  |   | 6,445,989    |   |  |   | 6,489,247 |  
|                                                                   |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|Basic loss per share                                               |  | $                             | (0.07     | ) |                             | $ | (0.41     | )            |  | $ | (0.18        | ) |  | $ | (0.59     | )
|                                                                   |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|Diluted loss per share:                                            |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|Weighted-average shares outstanding                                |  |                               | 6,454,209 |   |                             |   | 6,489,247 |              |  |   | 6,445,989    |   |  |   | 6,489,247 |  
|Dilutive shares issuable in connection with stock option plans (a) |  |                               |          |   |                             |   |          |              |  |   |             |   |  |   |          |  
|Less: shares purchasable with option proceeds                      |  |                               |          |   |                             |   |          |              |  |   |             |   |  |   |          |  
|                                                                   |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|Total                                                              |  |                               | 6,454,209 |   |                             |   | 6,489,247 |              |  |   | 6,445,989    |   |  |   | 6,489,247 |  
|                                                                   |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  
|Diluted loss per share                                             |  | $                             | (0.07     | ) |                             | $ | (0.41     | )            |  | $ | (0.18        | ) |  | $ | (0.59     | )
|                                                                   |  |                               |           |   |                             |   |           |              |  |   |              |   |  |   |           |  

---

|(a) | Stock options were not included in the calculation for dilutive earnings per share for the three-month and six-month periods ending June 30, 2007 and 2006 due to the net loss
in each period. The number of dilutive shares was 653,000 for the three and six months ended June 30, 2007 and 601,000 for the three and six months ended June 30, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14



---

|(9) | COMPREHENSIVE LOSS
|--- | ------------------



|                                                        |  |                               |      |   |                             |   |        |             |  |   |             |   |  |   |        |  
|------------------------------------------------------- |  | ----------------------------- | ---- | - | --------------------------- | - | ------ | ----------- |  | - | ----------- | - |  | - | ------ | -
|                                                        |  | Three Months Ended(Unaudited) |      |   | Six Months Ended(Unaudited) |  
|                                                        |  | June 302007                   |      |   | June 302006                 |   |        | June 302007 |  |   | June 302006 |  
|Net loss                                                |  | $                             | (434 | ) |                             | $ | (2,686 | )           |  | $ | (1,154      | ) |  | $ | (3,814 | )
|Accumulated other comprehensive (loss) income:          |  |                               |      |   |                             |   |        |             |  |   |             |   |  |   |        |  
|Foreign currency translation adjustment (no tax affect) |  |                               | 18   |   |                             |   | 61     |             |  |   | 96          |   |  |   | 109    |  
|Interest rate swap (net of tax)                         |  |                               | 47   |   |                             |   |       |             |  |   | (3          | ) |  |   |       |  
|                                                        |  |                               |      |   |                             |   |        |             |  |   |             |   |  |   |        |  
|Total comprehensive loss                                |  | $                             | (369 | ) |                             | $ | (2,625 | )           |  | $ | (1,061      | ) |  | $ | (3,705 | )
|                                                        |  |                               |      |   |                             |   |        |             |  |   |             |   |  |   |        |  



|(10) | CONTINGENCIES
|---- | -------------

The Company is subject to various unresolved legal actions,
which arise in the normal course of its business. None of these matters is expected to have a material adverse effect on the Companys financial position or results of operations. However, the ultimate resolution of these matters could result
in a change in the Companys estimate of its liability for these matters.

The Company warrants to the consumer who purchases its products that it
will repair or replace, without charge, defective products within a specified time period, generally one year. The Company also has a return policy for its customers that allows customers to return to the Company products returned to them by their
customers for full or partial credit based on when the Companys customer last purchased these products. Consequently, it maintains a warranty reserve, which reflects historical warranty returns rates by product category multiplied by the most
recent six months of unit sales of that model and the unit standard cost of the model. A roll-forward of the warranty reserve is as follows (in thousands):



|                                                    |  |                               |        |   |                             |   |        |  
|--------------------------------------------------- |  | ----------------------------- | ------ | - | --------------------------- | - | ------ | -
|                                                    |  | Six Months EndedJune 30, 2007 |        |   | Year EndedDecember 31, 2006 |  
|Accrued product warranty costs, beginning of period |  | $                             | 1,963  |   |                             | $ | 1,618  |  
|Warranty provision                                  |  |                               | 1,406  |   |                             |   | 3,873  |  
|Warranty expenditures                               |  |                               | (1,927 | ) |                             |   | (3,528 | )
|                                                    |  |                               |        |   |                             |   |        |  
|Accrued product warranty costs, end of period       |  | $                             | 1,442  |   |                             | $ | 1,963  |  
|                                                    |  |                               |        |   |                             |   |        |  



15



---

|(11) | INVENTORY VALUATION RESERVES
|---- | ----------------------------

The Company maintains a liquidation reserve
representing the write-down of returned product from its customers to its net realizable value. Returned inventory is either sold to various liquidators or returned to vendors for partial credit against similar, new models. The decision to sell or
return products to vendors depends upon the estimated future demand for the models. Judgments are made as to whether various models are to be liquidated or returned to the vendor, taking into consideration the liquidation prices expected to be
received and the amount of the vendor credit. The amount of the reserve is determined by comparing the cost of each unit returned to the estimated amount to be realized upon each units disposition, either from returning the unit to the vendor
for partial credit towards the cost of new, similar product or liquidating the unit. This reserve can fluctuate significantly from quarter to quarter depending upon quantities of returned inventory on hand and the estimated liquidation price or
vendor credit per unit. A roll-forward of the liquidation reserve is as follows (in thousands):



|                                         |  |                               |        |   |                             |   |        |  
|---------------------------------------- |  | ----------------------------- | ------ | - | --------------------------- | - | ------ | -
|                                         |  | Six Months EndedJune 30, 2007 |        |   | Year EndedDecember 31, 2006 |  
|Liquidation reserve, beginning of period |  | $                             | 1,112  |   |                             | $ | 874    |  
|Liquidation provision                    |  |                               | 3,051  |   |                             |   | 4,115  |  
|Liquidation of models                    |  |                               | (3,140 | ) |                             |   | (3,877 | )
|                                         |  |                               |        |   |                             |   |        |  
|Liquidation reserve, end of period       |  | $                             | 1,023  |   |                             | $ | 1,112  |  
|                                         |  |                               |        |   |                             |   |        |  

The Company maintains a net realizable value (NRV) reserve to write-down, as necessary, certain
finished goods, except for that covered by the liquidation reserve discussed above, below cost. The reserve includes models where it is determined that the estimated realizable value is less than cost. Thus, judgments must be made about which
slow-moving, excess or non-current models are to be included in the reserve and the NRV of such models. The estimated NRV of each model is the per unit price that is estimated to be received if the model were sold in the marketplace.

This reserve will vary depending upon the specific models selected, the estimated NRV for each model and quantities of each model that are determined will be sold below
cost from quarter to quarter. A roll-forward of the NRV reserve is as follows (in thousands):



|                                 |  |                               |        |   |                             |   |        |  
|-------------------------------- |  | ----------------------------- | ------ | - | --------------------------- | - | ------ | -
|                                 |  | Six Months EndedJune 30, 2007 |        |   | Year EndedDecember 31, 2006 |  
|NRV reserve, beginning of period |  | $                             | 736    |   |                             | $ | 509    |  
|NRV provision                    |  |                               | 2,386  |   |                             |   | 3,426  |  
|NRV write-offs                   |  |                               | (1,817 | ) |                             |   | (3,199 | )
|                                 |  |                               |        |   |                             |   |        |  
|NRV reserve, end of period       |  | $                             | 1,305  |   |                             | $ | 736    |  
|                                 |  |                               |        |   |                             |   |        |  



16



---

|(12) | OTHER INCOME/EXPENSE
|---- | --------------------

The following table shows the components of other
income/expense (in thousands):



|                     |  |                            |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|-------------------- |  | -------------------------- | ---- | - | ------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                     |  | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |  
|                     |  | 2007                       |      |   | 2006                     |   |      | 2007 |  |   | 2006 |  
|Interest expense     |  | $                          | (411 | ) |                          | $ | (25  | )    |  | $ | (730 | ) |  | $ | (59  | )
|Interest income      |  |                            | 4    |   |                          |   | 70   |      |  |   | 15   |   |  |   | 182  |  
|CSV gain (loss)      |  |                            | 151  |   |                          |   | (142 | )    |  |   | 220  |   |  |   | (346 | )
|Exchange gain (loss) |  |                            | 74   |   |                          |   | 6    |      |  |   | 158  |   |  |   | 3    |  
|Royalties            |  |                            | 92   |   |                          |   | 21   |      |  |   | 218  |   |  |   | 70   |  
|Other  net          |  |                            | 37   |   |                          |   | (30  | )    |  |   | 4    |   |  |   | (46  | )
|                     |  |                            |      |   |                          |   |      |      |  |   |      |   |  |   |      |  
|Total                |  | $                          | (53  | ) |                          | $ | (100 | )    |  | $ | (115 | ) |  | $ | (196 | )
|                     |  |                            |      |   |                          |   |      |      |  |   |      |   |  |   |      |  



|(13) | SUBSEQUENT EVENT
|---- | ----------------

On July 26, 2007, the Company executed an amendment
to its loan agreement that amends covenants and waives violations of the loan agreement relating to those covenants. The amendment also eliminated the delayed-draw term loan facility that was in place to fund the first earn-out payment to the former
shareholders of PPL as such first earn-out payment was not required to be made by the Company.

During July 2007, James R. Bazet, Chief Executive Officer,
exercised his option to purchase 41,701 shares at an exercise price of $5.63 per share. The average price per share acquired was $9.62. As part of his stock option transactions in July 2007, Mr. Bazet exchanged 30,329 of previously purchased
shares of the Companys stock. As of July 27, 2007, 32,199 of fully vested stock options entitled to Mr. Bazet were not exercised and accordingly expired.



17



---

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

ANALYSIS OF RESULTS OF OPERATIONS

Executive Summary

For the second quarter of 2007, the Company reported slightly lower net sales, $39.2 million compared to $39.6 million in the prior years quarter. Net sales for the
quarter reflected a decline in sales at the Companys Cobra segment, mainly because of lower sales of mobile navigation and domestic two-way radio products, which was mostly offset by net sales of $3.8 million at the PPL segment, which the
Company acquired in late October 2006.

The Companys 2007 gross margin increased to 21.4 percent from 10.5 percent in 2006 mainly as a result of an
improvement in gross margin in the Cobra segment, 19.5 percent compared to 10.5 percent in the prior years quarter. This improvement primarily reflected increased gross margins in mobile navigation, which was due in part to the fact that the
$628,000 write-down of the value of certain older mobile navigation products to market prices in the current quarter compared favorably to the $4.6 million in charges in the second quarter of 2006 for the impairment charge of intellectual property
pertaining to first generation handheld GPS and mobile navigation products and for an inventory write-down attributable to lower selling prices on these products. A 39.0 percent gross margin for the PPL segment also helped to increase gross margin
in the current quarter.

The Companys selling, general and administrative expenses increased $1.5 million to $9.6 million from $8.1 million in the
prior years quarter. As a percentage of net sales, selling, general and administrative expenses were 24.6 percent compared to 20.5 percent in 2006. $1.4 million of the increase was attributable to PPL.

Other income for the Company increased $433,000 in 2007 primarily due to a higher gain on the cash surrender value of life insurance. Interest expense increased by
$386,000 in 2007 as a result of the debt incurred to acquire PPL.

The Company had a net loss in the second quarter of 2007 of $434,000, or a net loss of
$0.07 per diluted share, compared to a net loss of $2.7 million, or a net loss of $0.41 per diluted share, for 2006. The income tax benefit for 2007 reflected a 67.0 percent effective tax rate compared to an effective tax rate of 33.6 percent for
2006s tax benefit. The higher income tax rate compared to 2006 resulted from combining no tax for CEEL, which had substantial income for 2007 and a substantial loss in 2006, with a tax benefit for Cobra US, which had a less substantial loss
for 2007 than 2006. The lack of tax expense at CEEL in the second quarter of 2007 reflected the availability of net operating loss carryforwards in that jurisdiction.

For the six-month period ended June 30, the effective tax benefit rate was 50.6 percent for 2007 and 33.2 percent for 2006. The increase in 2007 reflected CEEL income with no tax expense compared to a loss in the
prior year coupled with a smaller Cobra US loss.

The Company anticipates that there will be year-over-year increases in both revenue and net income for
the third quarter of 2007.



18



---

Second Quarter 2007 vs. Second Quarter 2006

The following table contains sales and pretax income (loss) after eliminating intercompany accounts by business segment for the quarters ended June 30, 2007 and 2006.



|                 |  |           |        |              |        |   |           |                                  |              |  |        |          |  |   |              |   |  |      
|---------------- |  | --------- | ------ | ------------ | ------ | - | --------- | -------------------------------- | ------------ |  | ------ | -------- |  | - | ------------ | - |  | -----
|                 |  | 2007      |        |              | 2006   |   |           | 2007 vs. 2006Increase (Decrease)
|Business Segment |  | Net Sales |        | Income(Loss) |        |   | Net Sales |                                  | Income(Loss) |  |        | NetSales |  |   | Income(Loss)
|Cobra            |  | $         | 35,439 |              | (1,380 | ) |           | $                                | 39,586       |  | (4,044 | )        |  | $ | (4,147       | ) |  | 2,664
|PPL              |  |           | 3,776  |              | 75     |   |           |                                  |             |  |       |          |  |   | 3,776        |   |  | 75   
|                 |  |           |        |              |        |   |           |                                  |              |  |        |          |  |   |              |   |  |      
|Total            |  | $         | 39,215 |              | (1,305 | ) |           | $                                | 39,586       |  | (4,044 | )        |  | $ | (371         | ) |  | 2,739
|                 |  |           |        |              |        |   |           |                                  |              |  |        |          |  |   |              |   |  |      

Cobra Business Segment

Cobras net sales decreased $4.1 million, or 10.5 percent, from the prior years quarter. The decrease reflected lower sales of domestic two-way radios, Citizens Band radios and mobile navigation products,
which declined 34.1 percent, 22.8 percent and 45.0 percent, respectively. The decline in two-way radio sales in the U.S., as compared to the second quarter of last year, was due in part to timing since sales of two-way radios were 56.1 percent
higher in the first quarter of 2007 compared to the prior years quarter as well as a lesser emphasis on this category from retailers as the category continues to mature. The decline in Citizens Band radio sales also was due to timing as sales
for the first six months of 2007 were approximately the same as for the first six months of 2006. Mobile navigation sales decreased primarily because a competitor secured a large promotional sale to QVC that Cobra had received in the prior year.
Some of the decline in mobile navigation sales was offset by sales of the new NAV ONE 2100 to Best Buy and other national and regional retailers. Partially offsetting the overall decrease in Cobra sales was a 3.2 percent increase in domestic
detection sales and a 38.6 percent increase in non-U.S. sales, mainly in Canada and Europe.

For the second quarter of 2007, Cobras pre-tax segment
loss decreased to $1.4 million from a pre-tax segment loss of $4.0 million in 2006. The decrease reflected mainly an increase in gross margin, offset in part by higher selling, general and administrative expenses and interest expense.

Cobras gross margin rose to 19.5 percent in 2007 from 10.5 percent in 2006, an increase of 9.0 gross margin points, which reflected primarily an improvement in
mobile navigation gross margin. Much of this improvement resulted from the fact that, in 2006, there was a $2.3 million impairment charge for certain intellectual property pertaining to first generation handheld GPS and mobile navigation products
and a $2.3 million inventory write down attributable to lower selling prices on these products, which combined resulted in a decrease of 11.7 gross margin points. In the current quarter, there was also a $628,000 inventory write-down in the value of
certain older inventory of mobile navigation products to market prices and a charge of $125,000 to adjust the cost of certain returned mobile navigation products to net realizable value, which combined reduced Cobras gross margin for the
second quarter of 2007 by 2.1 gross margin points. Also contributing to the increase were higher gross margins for domestic two-way radios, as 2006 had higher air freight because of production delays on new lithium ion models and at Cobra
Electronics Europe Limited because of the introduction of a new PMR radio line, increased sales of high margin detection and a stronger euro.

Cobras
selling, general and administrative expenses were $8.2 million, or 23.2 percent of net sales, compared to $8.1 million, or 20.5 percent of net sales, for the prior years second quarter. The current quarters expenses were higher because
of a $295,000 lower reversal of accrued unused program funds from prior periods compared to 2006, which was offset in part by an increase in sales and marketing expenses.

Interest expense for Cobra increased $365,000 in 2007 primarily because of the debt relating to the purchase of PPL. Other income increased $419,000 in 2007 primarily due to a higher gain on cash surrender value life
insurance.



19



---

PPL Business Segment

For the second quarter of 2007, PPL had net sales of $3.8 million, which were less than expected because of the delay in introducing two new satellite navigation products, resulting in a product line of only two skus at the beginning of the
quarter and only three skus at the end of the quarter, which reduced sales by approximately $2.2 million. Additionally, unit sales of the satellite navigation products were less than expected as certain key accounts did not include the PPL products
in their plan-o-grams or catalogs. Also contributing to the lower net sales was a charge of $204,000, reflecting intangible amortization, which reduced PPLs Enigma data base download fee revenue recognized for the quarter. The remaining amount
of the intangible amortization at June 30, 2007 amounted to $612,000, of which $287,000 will be amortized during the last six months of 2007 with the remainder to be amortized during 2008.

For the second quarter of 2007, PPL had a pre-tax segment income of $75,000. This reflected a gross margin of 39.0 percent, and was less than anticipated because of
lower average selling prices on GPS products as well as non-cash charges of $212,000 associated with the intangible amortization that increased cost of sales and lowered gross margin by 5.6 points. The lower prices were implemented in lieu of
spending advertising funds, which were curtailed from the forecast by more than $400,000 for the quarter. The pre-tax segment profit also reflected $1.4 million of selling, general and administrative expenses including $133,000 of non-cash charges
associated with the intangible amortization, and was lower than expected because of the lower advertising expense noted above.



20



---

Six Months Ended June 30, 2007 vs. Six Months Ended June 30, 2006

The following table contains sales and pretax income (loss) after eliminating intercompany accounts by business segment for the six months ended June 30, 2007 and
2006.



|                 |  |           |        |              |        |   |           |                                  |              |  |        |          |  |   |              |   |  |      
|---------------- |  | --------- | ------ | ------------ | ------ | - | --------- | -------------------------------- | ------------ |  | ------ | -------- |  | - | ------------ | - |  | -----
|                 |  | 2007      |        |              | 2006   |   |           | 2007 vs. 2006Increase (Decrease)
|Business Segment |  | Net Sales |        | Income(Loss) |        |   | Net Sales |                                  | Income(Loss) |  |        | NetSales |  |   | Income(Loss)
|Cobra            |  | $         | 64,385 |              | (2,525 | ) |           | $                                | 64,893       |  | (5,706 | )        |  | $ | (508         | ) |  | 3,181
|PPL              |  |           | 6,866  |              | 210    |   |           |                                  |             |  |       |          |  |   | 6,866        |   |  | 210  
|                 |  |           |        |              |        |   |           |                                  |              |  |        |          |  |   |              |   |  |      
|Total            |  | $         | 71,251 |              | (2,315 | ) |           | $                                | 64,893       |  | (5,706 | )        |  | $ | 6,358        |   |  | 3,391
|                 |  |           |        |              |        |   |           |                                  |              |  |        |          |  |   |              |   |  |      

Cobra Business Segment

Cobras net sales decreased $508,000 from the prior year. This slight decrease reflected lower sales of domestic two-way radios and mobile navigation products, which declined 11.1 percent and 40.4 percent,
respectively, and higher domestic detection sales, which increased 6.3 percent, and higher international and Cobra Electronics Europe Limited sales, which increased a combined 39.8 percent. The decline in domestic two-way radio sales was primarily
due to a continuing decrease in emphasis on this category from retailers as the category continues to mature. Mobile navigation sales decreased because a competitor secured a large promotional sale to QVC that Cobra had received in the prior year as
well as lower sales of the Companys older, large-screen models, which will be replaced by the new NAV ONE 5000 due out later in the year. Some of the mobile navigation sales decline was offset by sales of the new NAV ONE 2100 to Best Buy and
other national and regional retailers. The increase in detection sales reflected mainly higher sales to Wal-Mart because of strong sell-through. Also contributing to the detection increase were sales of Cobras newest product entries in this
line, the R7G and R9G, which are remote radar detectors, with the higher-end unit featuring GPS-based red light and speed camera location capabilities. The increase in international and Cobra Electronics Europe Limited sales was due to strong
two-way radio sales in Canada and Europe and detector sales in Europe.

For the first six months of 2007, Cobras pre-tax segment loss decreased to
$2.5 million from a pre-tax segment loss of $5.7 million for the same period in 2006. The decrease reflected mainly an increase in gross margin, offset in part by higher selling, general and administrative expenses and interest expense.

Cobras gross margin rose to 21.2 percent in 2007 from 14.2 percent in 2006, an increase of 7.0 gross margin points, which reflected primarily an improvement in
gross margin for mobile navigation. The increase in domestic mobile navigation gross margin was due primarily to the fact that in 2006 there were charges of $2.8 million for impairment of certain intellectual property pertaining to first generation
handheld GPS and mobile navigation products and $2.3 million for inventory write down attributable to lower selling prices on these products, which combined decreased Cobras 2006 gross margin by 7.8 points. Offsetting some of the mobile
navigation gross margin improvement in 2007 were charges of $628,000 to write down the inventory value of certain older inventory market prices and $296,000 to adjust the cost of certain returned mobile navigation products to net realizable value.
Also contributing to the improvement in gross margin were higher margins for domestic two-way radios and at Cobra Electronics Europe Limited. The increase in domestic two-way radio gross margin was due to the fact that in 2006 there was much higher
air freight expense because of vendor delays on new lithium ion models as well as higher inventory write-downs for older models. The improvement in the gross margin of Cobra Electronics Europe Limited was because of increased sales of high margin
detection products.

Cobras selling, general and administrative expenses increased $1.3 million to $16.0 million, or 24.8 percent of net sales, for
the first six months of 2007 from $14.7 million, or 22.7 percent of net sales, for the first six months of 2006. The current periods expenses were higher in part because of a $612,000 lower reversal of accrued unused program funds from prior
periods compared to 2006. Also contributing to the increase were higher professional fees for compliance with new auditing pronouncements, specifically FIN 48, tax consulting services in connection with a IRS audit and assistance with U.S. GAAP
reporting at PPL, as well as increased sales and marketing expenses because of higher compensation costs, as an open position was filled, higher fees for international trademark work and higher outside lab testing fees for new European products.

Interest expense for Cobra increased $636,000 in 2007 primarily because of the debt relating to the purchase of PPL. Other income increased $622,000 in
2007 primarily due to an increase of $567,000 in cash surrender value life insurance.



21



---

PPL Business Segment

For the first six months of 2007, PPL had net sales of $6.9 million, which were less than expected primarily because of lower sales of satellite navigation products. This was due to the failure of a new vendor to produce a key satellite
navigation model, causing a six month delay to produce a replacement model, as well as delays in the launches of two other satellite navigation models. Together these delays reduced sales by approximately $4.0 million. Also contributing to the lower
net sales was a charge of $446,000, reflecting intangible amortization, that reduced PPLs Enigma data base download fee revenue recognized for the first six months of 2007. The remaining amount of the intangible amortization pertaining to
download fees at June 30, 2007 amounted to $612,000, of which $287,000 will be amortized during the last six months of 2007 with the remainder to be amortized during 2008.

For the first six months of 2007, PPL had a pre-tax segment profit of $210,000, which reflected a gross margin of 40.9 percent and was lower than anticipated primarily because of non-cash charges of $239,000
associated with the intangible amortization that increased cost of sales and lowered gross margin by 3.5 points. The pre-tax segment profit also reflected $2.7 million of selling, general and administrative expenses which included $348,000 of
non-cash charges associated with the intangible amortization, and were slightly lower than expected due to a decrease in certain advertising expenses offset in part by higher professional fees for assistance to comply with U.S. GAAP requirements.



22



---

LIQUIDITY AND CAPITAL RESOURCES

On January 31, 2002, the Company executed a new three-year Revolving Credit Agreement (Credit Agreement) with three financial institutions. In November 2005, the term of the agreement was amended to
January 31, 2007. In October 2006, in connection with the PPL acquisition, the Credit Agreement was amended and restated for a five-year term and maximum loan limit of $53.6 million, including the $40 million revolver, and a $7.0 million Term
Loan. The balance of $6.6 million was for a Delayed-Draw Term Loan available until November 15, 2007 that could only be used to fund the first earn-out payment of up to approximately $6.5 million under the PPL purchase agreement which was
contingent upon PPLs operating performance for the twelve-month period ending March 31, 2007. At the Companys option, the revolver may be increased to $50 million upon sixty days advance notice. Borrowings and letters of credit
issued under the Credit Agreement are secured by substantially all of the assets of the Company.

The amended and restated credit agreement continues to
allow the Company to pay dividends and distributions on its stock, and repurchases of its stock, up to $1.2 million per calendar year.

The amended and
restated credit agreement contained certain financial and other covenants, including but not limited to, a Tangible Net Worth Minimum, a Fixed Charge Coverage Ratio and a Debt-to-EBITDA Ratio. The revolver portion of the credit agreement was also
subject to an unused line fee of 37.5 basis points. Prior to the execution of the Waiver and Amendment of July 26, 2007 (as discussed below), loans outstanding on the revolver bore interest, at the Companys option, at the prime rate plus
an applicable margin or LIBOR plus an applicable margin. The Company elected the LIBOR option on the $7.0 million Term Loan and entered into a 5-year interest rate swap in January 2007, as required by the credit agreement, which effectively fixed
the total interest rate at 5.34 percent plus applicable basis points, currently 225 points, or a total interest rate of 7.59 percent. The $7.0 million Term Loan was subject to quarterly installment payments and mandatory prepayments based on certain
asset sales, excess cash flow and issuance of equity or debt.

At June 30, 2007, the Company had interest bearing debt outstanding of $17.1 million,
consisting of the $6.5 million term loan and $10.6 million in the Revolver. As of June 30, 2007, availability was approximately $14.3 million under the revolving credit line based on asset advance formulas.

On July 26, 2007, the Company entered into a Waiver and Amendment to the loan agreement pursuant to which its lenders waived certain covenant violations that would
have otherwise occurred with respect to the quarter ended June 30, 2007 due to the Company not achieving the required EBITDA level and Debt-to-EBITDA ratio, as defined in the revolving credit agreement. This amendment also amended the
Debt-to-EBITDA Ratio covenant and Fixed Charge Coverage Ratio covenant and increased the applicable margin used to calculate the interest rate charged. In addition, the amendment provides that the Company is required to have excess availability
under the credit agreement of not less than $5 million at all times. As of July 1, 2007, the interest on LIBOR rate loans is LIBOR plus 225 points compared to the LIBOR plus 175 points prior to the amendment. The amendment also eliminated the
delayed draw term loan facility that was in place to pay the first earn-out payment to the former shareholders of Performance Products since the required performance for this payment was not achieved.



23



---

On October 20, 2006, Cobra Electronics U.K. Limited, a wholly-owned subsidiary of Cobra Electronics Corporation
completed the acquisition of 100 percent of the issued and outstanding share capital of PPL. Under the acquisition agreement, the purchase price for the issued share capital of PPL consisted of $21.2 million paid in cash at the closing of the
transaction. The former shareholders of PPL were eligible to receive additional cash consideration of up to approximately $6.5 million based on the achievement of certain performance targets by PPL for the twelve month period ended March 31,
2007 (the first earn-out period) and up to approximately $9.4 million for the fourteen month period ended May 31, 2008 (the second earn-out period). No additional consideration was paid to the former shareholders for this first earn-out period;
the former shareholders are eligible to recapture all or a portion of this first earn-out payment should the performance in the second earn-out period exceed the performance targets established for the payment of the entire second earn-out.
Additionally, the former shareholders could earn additional consideration if the performance of Performance Products exceeds certain cumulative targets for the combined earn-out periods.

For the six months ended June 30, 2007, net cash flows provided by operating activities were $4.2 million. Significant net cash inflows from operations included a reduction in accounts receivable of $7.7 million
and non-cash depreciation and amortization of $3.8 million. The decrease in accounts receivable resulted from collections on increased fourth quarter of 2006 sales. Significant offsets to the inflows were a decrease in accrued liabilities of $2.2
million, a decrease in accrued income taxes of $1.5 million, an increase in other current assets of $1.1 million and an increase in inventory of $753,000. The decrease in accrued liabilities was due to payments for year-end accruals for professional
fees and advertising and promotional funds. The increase in other current assets was due primarily to $1.2 million of tax benefit that resulted from the Companys loss before taxes and $652,000 due from a financial institution for a euro
contract that matured at the end of the second quarter. These increases were offset in part by a payment of a $1.2 million receivable from PPL shareholders as a result of working capital adjustments that reduced the purchase price paid upon closing
for the issued share capital of PPL. The increase in inventory represented a build-up resulting from normal seasonal requirements and forecasted sales for the third quarter.

Working capital requirements are seasonal, with demand for working capital being higher later in the year as customers begin purchasing for the holiday selling season. The Company believes that cash generated from
operations and from borrowings under its credit agreement will be sufficient in 2007 to fund its working capital needs.

Investing activities used cash of
$2.7 million in the first six months of 2007 due to a $1.6 million increase in intangible assets, primarily for Mobile Navigation product software, and $845,000 for capital expenditures, primarily for purchases of tooling.

At June 30, 2007 and 2006, the Company had outstanding inventory purchase orders with suppliers totaling approximately $37.6 million and $35.5 million,
respectively.

The Company declared an annual dividend of $0.16 per share, payable on April 27, 2007 to shareholders of record as of April 13,
2007, which utilized $1.0 million.



24



---

CRITICAL ACCOUNTING POLICIES

The Companys significant accounting policies are discussed in the notes to the consolidated financial statements. The application of certain of these policies requires significant judgments or a historical based
estimation process that can affect the results of operations and financial position of the Company as well as the related footnote disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are
reasonable. If actual amounts ultimately differ from previous estimates, the revisions are included in the Companys results of operations for the period in which the actual amounts become known.

Critical accounting policies generally consist of those that are reflective of significant judgments and uncertainties and could potentially result in materially
different results under different assumptions. For a description of the Companys critical accounting polices refer to the Companys Annual Report on Form 10-K for the year ended December 31, 2006.



25



---

Item 3. Qualitative and Quantitative Disclosures About Market Risk

Market risks related to changes in foreign currency exchange risks and interest rates are inherent to the Companys operations. Changes to these factors could cause
fluctuations in the Companys net earnings, cash flows and the fair values of financial instruments subject to market risks. The Company identifies these risks and mitigates the financial impact with hedging and interest rate swaps.

There have been no material changes in the Companys market risk since December 31, 2006.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of that term in
the Private Securities Litigation Reform Act of 1995 found at Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Additional written or oral forward-looking statements may be made by the Company from time to time
in filings with the SEC, press releases, or otherwise. Statements contained in this report that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act.
Forward-looking statements may include, but are not limited to, projections of revenue, income or loss and capital expenditures, statements regarding future operations, anticipated financing needs, compliance with financial covenants in loan
agreements, liquidity, plans for acquisitions or sales of assets or businesses, plans relating to products or services, assessments of materiality, expansion into international markets, growth trends in the consumer electronics business,
technological and market developments in the consumer electronics business, the availability of new consumer electronics products and predictions of future events, as well as assumptions relating to these statements. In addition, when used in this
report, the words anticipates, believes, should, estimates, expects, intends, plans and variations thereof and similar expressions are intended to identify
forward-looking statements.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified
based on current expectations. Consequently, future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements contained in this report or in other Company filings, press
releases, or otherwise. Factors that could contribute to or cause such differences include, but are not limited to, unanticipated developments in any one or more of the following areas:



| |  |  | global economic and market conditions, including continuation of or changes in the current economic environment;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | ability of the Company to introduce new products to meet consumer needs, including timely introductions as new consumer technologies are introduced, and customer
and consumer acceptance of these new product introductions;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pressure for the Company to reduce prices for older products as newer technologies are introduced;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | significant competition in the consumer electronics business, including introduction of new products and changes in pricing;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | factors related to foreign manufacturing, sourcing and sales (including foreign government regulation, trade and importation, and health and safety concerns, and
effects of fluctuation in exchange rates);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ability of the Company to maintain adequate financing, to bear the interest cost of such financing and to remain in compliance with financing covenants;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in law;
| | - |  | ---------------



| |  |  | ability to successfully integrate acquisitions including PPL;
| | - |  | -------------------------------------------------------------



| |  |  | and other risk factors, which may be detailed from time to time in the Companys SEC filings.
| | - |  | ---------------------------------------------------------------------------------------------

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this report, which speak only as of the date set forth on the signature
page hereto. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after such date or to reflect the occurrence of anticipated or
unanticipated events.



26



---

Item 4. Controls and Procedures

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms. The Companys disclosure controls and procedures have also been designed to ensure that information required to be disclosed in the reports that the Company files
or submits under the Exchange Act is accumulated and communicated to the Companys management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

As of June 30, 2007, the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the
Companys principal executive officer and principal financial officer, of the effectiveness of the Companys disclosure controls and procedures. Based on this evaluation, the principal executive officer and principal financial officer of
the Company have concluded that the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective as of June 30, 2007.

There has been no change in the Companys internal control over financial reporting that occurred during the second quarter of 2007 that has materially affected, or
is reasonably likely to materially affect, the Companys internal control over financial reporting.



27



---

PART II

OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes to the risk factors as previously disclosed under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2006.

Item 4. Submission of Matters to a Vote of Security Holders

The
2007 Annual Meeting was held on May 8, 2007. The election of two directors was submitted to the shareholders for vote. The following persons were elected Directors of the Company to serve until the annual meeting of the term specified below:



|              |  |       |  |           |  |                |  |     
|------------- |  | ----- |  | --------- |  | -------------- |  | ----
|Name          |  | Class |  | Votes For |  | Votes Withheld |  | Term
|Carl Korn     |  | III   |  | 4,792,536 |  | 1,124,659      |  | 2010
|Ian R. Miller |  | III   |  | 4,396,745 |  | 1,520,450      |  | 2010

The Class I Directors continuing in office until the 2008 Annual Meeting of Shareholders are James R. Bazet and
William P. Carmichael. In addition, on July 26, 2007, John S. Lupo was elected as a Class I Director continuing in office until the 2008 Annual Meeting.

The Class II Director continuing in office until the 2009 Annual Meeting of Shareholders is Robert P. Rohleder. In addition, on June 6, 2007, S. Sam Park was elected as a Class II Director continuing in office until the 2009 Annual
Meeting.

Item 6. Exhibits



|a) | Exhibit 31.1 Rule 13a-14(a)/15(d)-14(a) Certification of the Chief Executive Officer.
|-- | -------------------------------------------------------------------------------------



|b) | Exhibit 31.2 Rule 13a-14(a)/15(d)14(a) Certification of the Chief Financial Officer.
|-- | -------------------------------------------------------------------------------------



|c) | Exhibit 32.1 Section 1350 Certification of the Chief Executive Officer.
|-- | -----------------------------------------------------------------------



|d) | Exhibit 32.2 Section 1350 Certification of the Chief Financial Officer.
|-- | -----------------------------------------------------------------------



28



---

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



COBRA ELECTRONICS CORPORATIONBy

/s/    MICHAEL SMITHMichael Smith Senior Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)


Dated: August 13, 2007



29



---

INDEX TO EXHIBITS



|              |  |                                                                  
|------------- |  | -----------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                          
|31.1          |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|              | 
|31.2          |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|              | 
|32.1          |  | Section 1350 Certification of Chief Executive Officer            
|              | 
|32.2          |  | Section 1350 Certification of Chief Financial Officer            



30