##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 
 FORM
10-Q/A
 
 
 (Amendment No. 1)
 
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 000-31635  (Commission file number)
 
 ENDWAVE CORPORATION
  
 Delaware
(State of incorporation)
    
    95-4333817
(I.R.S. Employer Identification No.)776 Palomar Avenue,
Sunnyvale, CA
(Address of principal executive offices)
    
    94085
(Zip code)
 (408) 522-3100
 þ o
 o þ




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##### Table of Contents



ENDWAVE CORPORATION
 INDEX
 PageExplanatory Note
    
    
    3PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    4Condensed Consolidated Balance Sheets as of June 30, 2005 (unaudited) and December 31, 2004
    
    
    4Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2005 and 2004
    
    
    5Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and 2004
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Qualitative and Quantitative Disclosure about Market Risk
    
    
    29Item 4.
    
    Controls and Procedures
    
    
    30PART II.
    
    OTHER INFORMATIONItem 6.
    
    Exhibits
    
    
    31SIGNATURES
    
    
    33EXHIBITSEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
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EXPLANATORY NOTE
   31.1
    
    Certification by Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
   
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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ENDWAVE CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share amounts)
 June 30,
    
    December 31,2005
    
    2004(unaudited)
    
    (1)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    8,474
    
    
    $
    14,158Short-term investments
    
    
    13,550
    
    
    
    10,979Accounts receivable, net
    
    
    8,381
    
    
    
    8,673Accounts receivable from affiliate
    
    
    4
    
    
    
    15Inventories
    
    
    15,880
    
    
    
    7,866Other current assets
    
    
    785
    
    
    
    477Total current assets
    
    
    47,074
    
    
    
    42,168Property and equipment, net
    
    
    1,726
    
    
    
    2,394Other assets
    
    
    104
    
    
    
    125Goodwill and intangible assets, net
    
    
    5,100
    
    
    
    5,407$
    54,004
    
    
    $
    50,094LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    5,288
    
    
    $
    2,308Accounts payable to affiliate
    
    
    1,501
    
    
    
    1,279Accrued warranty
    
    
    4,141
    
    
    
    4,488Accrued compensation
    
    
    1,890
    
    
    
    1,370Restructuring liabilities, current
    
    
    60
    
    
    
    274Other current liabilities
    
    
    696
    
    
    
    752Total current liabilities
    
    
    13,576
    
    
    
    10,471Other long-term liabilities
    
    
    462
    
    
    
    559Total liabilities
    
    
    14,038
    
    
    
    11,030Commitments and contingencies (Note 11)Stockholders equity:Common stock, $0.001 par value per
share; 100,000,000 authorized,
10,763,546 and 10,499,944 issued and
outstanding on June 30, 2005 and
December 31, 2004, respectively
    
    
    11
    
    
    
    10Additional paid-in capital
    
    
    306,073
    
    
    
    304,658Treasury stock, at cost, 39,150 shares
    
    
    (79
    )
    
    
    (79
    )Accumulated other comprehensive loss
    
    
    (15
    )
    
    
    (30
    )Accumulated deficit
    
    
    (266,024
    )
    
    
    (265,495
    )Total stockholders equity
    
    
    39,966
    
    
    
    39,064$
    54,004
    
    
    $
    50,094
 
 (1)
    
    Derived from the Companys audited financial statements as of December 31, 2004 The accompanying notes are an integral part of these condensed consolidated financial statements.
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ENDWAVE CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except share and per share amounts)
 (unaudited)
 Three months ended
    
    Six months endedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Revenues:Product revenues
    
    $
    11,882
    
    
    $
    7,246
    
    
    $
    20,844
    
    
    $
    13,741Product revenues from affiliate
    
    
    4
    
    
    
    42
    
    
    
    14
    
    
    
    42Development fees
    
    
    356
    
    
    
    288
    
    
    
    484
    
    
    
    410Total revenues
    
    
    12,242
    
    
    
    7,576
    
    
    
    21,342
    
    
    
    14,193Costs and expenses:Cost of product revenues
    
    
    7,958
    
    
    
    5,241
    
    
    
    14,132
    
    
    
    9,212Cost of product revenues from affiliate
    
    
    1
    
    
    
    16
    
    
    
    2
    
    
    
    16Cost of product revenues, amortization of
intangible assets
    
    
    113
    
    
    
    
    
    
    
    226
    
    
    
    Research and development
    
    
    1,619
    
    
    
    1,083
    
    
    
    3,111
    
    
    
    2,057Selling, general and administrative
    
    
    2,459
    
    
    
    1,705
    
    
    
    4,733
    
    
    
    3,534Amortization of intangible assets
    
    
    39
    
    
    
    
    
    
    
    101
    
    
    
    Restructuring charges, net
    
    
    (46
    )
    
    
    
    
    
    
    (46
    )
    
    
    2,899Recovery on building sublease
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (359
    )Amortization of deferred stock compensation*
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    204Total costs and expenses
    
    
    12,143
    
    
    
    8,130
    
    
    
    22,259
    
    
    
    17,563Income (loss) from operations
    
    
    99
    
    
    
    (554
    )
    
    
    (917
    )
    
    
    (3,370
    )Interest and other income, net
    
    
    219
    
    
    
    125
    
    
    
    388
    
    
    
    762Net income (loss)
    
    $
    318
    
    
    $
    (429
    )
    
    $
    (529
    )
    
    $
    (2,608
    )Basic net income (loss) per share
    
    $
    0.03
    
    
    $
    (0.04
    )
    
    $
    (0.05
    )
    
    $
    (0.27
    )Diluted net income (loss) per share
    
    $
    0.03
    
    
    $
    (0.04
    )
    
    $
    (0.05
    )
    
    $
    (0.27
    )Shares used in computing basic net income
(loss) per share
    
    
    10,659,553
    
    
    
    9,655,341
    
    
    
    10,589,105
    
    
    
    9,563,724Shares used in computing diluted net income
(loss) per share
    
    
    11,699,649
    
    
    
    9,655,341
    
    
    
    10,589,105
    
    
    
    9,563,724* Amortization of deferred stock compensation:Cost of product revenues
    
    $
    
    
    
    $
    45
    
    
    $
    
    
    
    $
    109Research and development
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    44Selling, general and administrative
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    51$
    
    
    
    $
    85
    
    
    $
    
    
    
    $
    204
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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ENDWAVE CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Six months endedJune 30,2005
    
    2004Operating activities:Net loss
    
    $
    (529
    )
    
    $
    (2,608
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    778
    
    
    
    833Amortization of intangible assets
    
    
    327
    
    
    
    Amortization of deferred stock compensation
    
    
    
    
    
    
    204Restructuring charges, net
    
    
    (46
    )
    
    
    Loss on the sale of land and equipment
    
    
    (76
    )
    
    
    (469
    )Recovery on building sublease
    
    
    
    
    
    
    (359
    )Changes in operating assets and liabilities:Accounts receivable, net
    
    
    303
    
    
    
    1,044Inventories
    
    
    (8,014
    )
    
    
    678Other assets
    
    
    (287
    )
    
    
    227Accounts payable
    
    
    3,202
    
    
    
    (1,470
    )Accrued warranty
    
    
    (347
    )
    
    
    (1,081
    )Accrued compensation and other current and long-term liabilities
    
    
    275
    
    
    
    (172
    )Net cash used in operating activities
    
    
    (4,414
    )
    
    
    (3,173
    )Investing activities:Cash paid in business combination
    
    
    (20
    )
    
    
    Purchases of equipment
    
    
    (110
    )
    
    
    (114
    )Proceeds on sales of property and equipment
    
    
    
    
    
    
    5,056Purchases of short term investments
    
    
    (19,871
    )
    
    
    (12,037
    )Proceeds on maturities of short term investments
    
    
    17,315
    
    
    
    14,399Decrease in restricted cash
    
    
    
    
    
    
    778Net cash provided by (used in) investing activities
    
    
    (2,686
    )
    
    
    8,082Financing activities:Payments on notes payable
    
    
    
    
    
    
    (778
    )Proceeds from stock issuance
    
    
    230
    
    
    
    92Proceeds from exercises of stock options
    
    
    1,186
    
    
    
    461Net cash
provided by (used in) financing activities
    
    
    1,416
    
    
    
    (225
    )Net change in cash and cash equivalents
    
    
    (5,684
    )
    
    
    4,684Cash and cash equivalents at beginning of period
    
    
    14,158
    
    
    
    13,408Cash and cash equivalents at end of period
    
    $
    8,474
    
    
    $
    18,092Supplemental cash flow information:Cash paid for interest
    
    $
    
    
    
    $
    19
 The accompanying notes are an integral part of these condensed consolidated financial statements
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ENDWAVE CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Business and Basis of Presentation
  °
    
    integrated transceivers  combinations of electronic devices that
combine both the transmit and receive functions necessary or a bi-directional radio
link;°
    
    amplifiers  electronic devices used to increase the amplitude and
power of an electronic signal;°
    
    synthesizers  electronic devices that can be used to generate several
different radio frequency signals from a single source;°
    
    oscillators  electronic devices that generate alternating increasing
and decreasing signals at specific intervals;°
    
    up and down converters  electronic devices that shift the center
frequency of a radio signal without altering the signals data modulation;°
    
    frequency multipliers  electronic devices that increase the frequency
of a radio signal in integer multiples; and°
    
    microwave switch arrays  electronic devices that can switch the
routing of a radio signal.
  2. Warranty
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2005
    
    2004(in thousands)Balance at January 1
    
    $
    4,488
    
    
    $
    5,835Warranties accrued
    
    
    338
    
    
    
    574Warranties settled or reversed
    
    
    (685
    )
    
    
    (1,655
    )Balance at June 30
    
    $
    4,141
    
    
    $
    4,754
 3. Stock-Based Compensation
     Three months ended
    
    Six months endedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004(in thousands)Net income (loss), as reported
    
    $
    318
    
    
    $
    (429
    )
    
    $
    (529
    )
    
    $
    (2,608
    )Add: Stock-based employee compensation expense included
in reported net loss
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    204Deduct: Stock-based employee compensation expense
determined under the fair value method for all awards
    
    
    (1,027
    )
    
    
    (1,057
    )
    
    
    (2,006
    )
    
    
    (1,734
    )Net income (loss), pro forma
    
    $
    (709
    )
    
    $
    (1,401
    )
    
    $
    (2,535
    )
    
    $
    (4,138
    )Basic and diluted net income (loss) per share, as reported
    
    $
    0.03
    
    
    $
    (0.04
    )
    
    $
    (0.05
    )
    
    $
    (0.27
    )Basic and diluted net income (loss) per share, pro forma
    
    $
    (0.07
    )
    
    $
    (0.15
    )
    
    $
    (0.24
    )
    
    $
    (0.43
    )
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4. Goodwill and Other Intangible Assets
 Goodwill
  Intangible Assets
  Gross Carrying
    
    Accumulated
    
    Net CarryingAmount
    
    Amortization
    
    AmountDeveloped technology
    
    $
    2,250
    
    
    $
    (413
    )
    
    $
    1,837Tradename
    
    
    1,060
    
    
    
    
    
    
    
    1,060Customer relationships
    
    
    780
    
    
    
    (143
    )
    
    
    637Customer backlog
    
    
    140
    
    
    
    (140
    )
    
    
    Intangible assets
    
    $
    4,230
    
    
    $
    (696
    )
    
    $
    3,534
   Years Ending December 312005
    
    $
    3022006
    
    
    6062007
    
    
    6062008
    
    
    6062009
    
    
    354$
    2,474
 5. Inventories
  June 30,
    
    December 31,2005
    
    2004Raw materials
    
    $
    14,643
    
    
    $
    7,139Work in process
    
    
    169
    
    
    
    432Finished goods
    
    
    1,068
    
    
    
    295$
    15,880
    
    
    $
    7,866
 6. Restructuring Charges, Net
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Third Quarter 2004 Plan
    
    Severance Benefits(In thousands)Accrual at December 31, 2004
    
    $
    193Cash payments
    
    
    (147
    )Restructuring charge adjustment
    
    
    (46
    )Accrual at June 30, 2005
    
    $
    
  7. Recovery on Building Sublease
  8. Net Income (Loss) Per Share
   Three months ended June 30,
    
    Six months ended June 302005
    
    2004
    
    2005
    
    2004Weighted average common shares outstanding
    
    
    10,659,553
    
    
    
    9,655,341
    
    
    
    10,589,105
    
    
    
    9,563,724Dilutive effect of employee stock options
    
    
    1,040,096
    
    
    
    
    
    
    
    
    
    
    
    Diluted average common shares outstanding
    
    
    11,699,649
    
    
    
    9,655,341
    
    
    
    10,589,105
    
    
    
    9,563,724
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9. Comprehensive Income (Loss)
   10. Segment Disclosures
  Three months ended June 30,2005
    
    2004United States
    
    $
    2,566
    
    
    
    21.0
    %
    
    $
    1,212
    
    
    
    16.0
    %Finland
    
    
    6,269
    
    
    
    51.2
    %
    
    
    4,377
    
    
    
    57.8
    %Italy
    
    
    1,771
    
    
    
    14.5
    %
    
    
    299
    
    
    
    3.9
    %Singapore
    
    
    22
    
    
    
    0.2
    %
    
    
    1,061
    
    
    
    14.0
    %Other
    
    
    1,614
    
    
    
    13.1
    %
    
    
    627
    
    
    
    8.3
    %Total
    
    $
    12,242
    
    
    
    100.0
    %
    
    $
    7,576
    
    
    
    100.0
    %
 Six months ended June 30,2005
    
    2004United States
    
    $
    4,173
    
    
    
    19.6
    %
    
    $
    2,663
    
    
    
    18.8
    %Finland
    
    
    11,724
    
    
    
    54.9
    %
    
    
    7,541
    
    
    
    53.1
    %Italy
    
    
    2,781
    
    
    
    13.0
    %
    
    
    1,027
    
    
    
    7.2
    %Singapore
    
    
    107
    
    
    
    0.5
    %
    
    
    1,467
    
    
    
    10.3
    %Other
    
    
    2,557
    
    
    
    12.0
    %
    
    
    1,495
    
    
    
    10.6
    %Total
    
    $
    21,342
    
    
    
    100.0
    %
    
    $
    14,193
    
    
    
    100.0
    %
    11. Commitments and Contingencies
  11




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12. Related Party Transactions
      13. Recent Accounting Pronouncements
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
     °
    
    During the second quarter of 2005, we increased our inventory to
support our forecasted growth in the second half of the year and to better meet our
customers anticipated demand. Inventories increased $5.2 million from March 31,
2005 and $8.0 million from December 31, 2004.°
    
    In January 2005, we announced the formation of Endwave Defense Systems
Incorporated (EDSI) to provide focus on the defense electronics and homeland
security markets. The business consists of JCA Technology, Inc. (JCA), which we
purchased in July 2004, and our legacy defense electronics business. We plan to
continue to use the JCA tradename while providing highly integrated, value-added
subsystem solutions for the defense electronics and homeland security markets.°
    
    During 2005, we will continue to manufacture products based on our customers
designs at the location of our offshore partner in Southeast Asia. We believe that
this will allow us to increase
market share, establish relationships with new customers, increase revenues and
absorb fixed costs.
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Results of Operations
 Three and six months ended June 30, 2005 and 2004
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of product revenues
    
    
    65.0
    
    
    
    69.4
    
    
    
    66.2
    
    
    
    65.0Cost of product revenues, amortization of
intangible assets
    
    
    0.9
    
    
    
    
    
    
    
    1.1
    
    
    
    Research and development
    
    
    13.2
    
    
    
    14.3
    
    
    
    14.6
    
    
    
    14.5Selling, general and administrative
    
    
    20.1
    
    
    
    22.5
    
    
    
    22.2
    
    
    
    24.9Amortization of intangible assets
    
    
    0.3
    
    
    
    
    
    
    
    0.4
    
    
    
    Restructuring charges, net
    
    
    (0.3
    )
    
    
    
    
    
    
    (0.2
    )
    
    
    20.4Amortization of deferred stock
compensation
    
    
    
    
    
    
    1.1
    
    
    
    
    
    
    
    1.4Recovery on building sublease
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.5
    )Total costs and expenses
    
    
    99.2
    
    
    
    107.3
    
    
    
    104.3
    
    
    
    123.7Income (loss) from operations
    
    
    0.8
    
    
    
    (7.3
    )
    
    
    (4.3
    )
    
    
    (23.7
    )Interest and other income, net
    
    
    1.8
    
    
    
    1.6
    
    
    
    1.8
    
    
    
    5.3Net income (loss)
    
    
    2.6
    %
    
    
    (5.7
    )%
    
    
    (2.5
    )%
    
    
    (18.4
    )%
 Revenues
    Cost and Expenses
 Cost of product revenues .
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Research and development expenses .
   Selling, general and administrative expenses .
 16




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Restructuring charges, net .
  Amortization of intangible assets .
   Amortization of deferred stock compensation.
 Loss (recovery) on building sublease .
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Interest and other income, net .
  Liquidity and Capital Resources
   
  
 
  
   Years Ending December 31,
    
    Operating Leases(In thousands)2005
    
    $
    3002006
    
    
    3462007
    
    
    2002008
    
    
    2062009
    
    
    105Total minimum payments required
    
    $
    1,157
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Recent Accounting Pronouncements
     RISK FACTORS
 You should consider carefully the following risk factors as well as other information in this
report and the documents incorporated by reference herein or therein, before investing any of our
securities. If any of the following risks actually occur, our business, operating results and
financial condition could be adversely affected. This could cause the market price of our common
stock to decline, and you may lose all or part of your investment.
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##### Table of Contents



Risks Relating to Our Business
 We have had a history of losses and may not be profitable in the future.
  We depend on a small number of key customers in the telecommunications industry for a large portion
of our revenues. If we lose any of our major customers, particularly Nokia, or there is any
material reduction in orders for our products from any of these customers, our business, financial
condition and results of operations would be adversely affected.
  We depend on the telecommunications industry for most of our revenues. If this industry suffers
another downturn or fails to grow as anticipated, our revenues could decrease and our profitability
could suffer. In addition, consolidation in this industry could result in delays or cancellations
of orders for our products, adversely impacting our results of operations.
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Our future success depends in part on our ability to further penetrate into new markets, such as
defense electronics and homeland security, and we may be unable to do so.
  Our operating results fluctuate significantly based on seasonal factors in the telecommunications
network market.
  Because of the scarcity of some components and our dependence on single source suppliers for some
other components, we may be unable to obtain an adequate supply of components, or we may be
required to pay higher prices or to purchase components of lesser quality.
  
    
    semiconductor devices;
    
    application-specific monolithic microwave integrated circuits;
    
    voltage-controlled oscillators;
    
    voltage regulators;
    
    lead-free surface mount components;
    
    high-frequency circuit boards;
    
    custom connectors;
    
    electromagnetic housings;
    
    yttrium iron garnet components; and
    
    magnetic components.
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We rely heavily on a Thailand facility of HANA Microelectronics Co., Ltd., a contract manufacturer,
to produce our RF modules. If HANA is unable to produce these modules in sufficient quantities or
with adequate quality, or it chooses to terminate our manufacturing arrangement, we will be forced
to find an alternative manufacturer and may not be able to fulfill our production commitments to
our customers, which could cause sales to be delayed or lost and could harm our reputation.
  We rely on Velocium and other third-party semiconductor foundries to manufacture the semiconductors
contained in our products. The loss of our relationship with any of these foundries, particularly
Velocium, without adequate notice would adversely impact our ability to fill customer orders and
could damage our customer relationships.
   Implementing our acquisition strategy could result in dilution to our stockholders and operating
difficulties leading to a decline in revenues and operating profit.
  
    
    diversion of our management from the operation of our core business;
    
    assimilating the acquired operations and personnel;
    
    integrating information technology and reporting systems;
    
    retention of key personnel;
    
    retention of acquired customers; and
    
    implementation of controls, procedures and policies in the acquired business.
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Our products may contain component, manufacturing or design defects or may not meet our customers
performance criteria, which could cause us to incur significant repair expenses, harm our customer
relationships and industry reputation, and reduce our revenues and profitability.
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We depend on our key personnel. Skilled personnel in our industry can be in short supply. If we are
unable to retain our current personnel or hire additional qualified personnel, our ability to
develop and successfully market our products would be harmed.
   Competitive conditions may require us to reduce prices in the future and, as a result, we may need
to reduce our costs in order to be profitable.
  The length of our sales cycle requires us to invest substantial financial and technical resources
in a potential sale before we know whether the sale will occur. There is no guarantee that the sale
will ever occur and if we are unsuccessful in designing a high-frequency RF module for a particular
generation of a customers products, we may need to wait until the next generation of that product
to sell our products to that particular customer.
  We may not be able to design our products as quickly as our customers require, which could cause us
to lose sales and may harm our reputation.
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We may not be able to manufacture and deliver our products as quickly as our customers require,
which could cause us to lose sales and would harm our reputation.
  
    
    the failure of a supplier to deliver needed components on a timely basis or with acceptable quality;
    
    lack of sufficient capacity;
    
    poor manufacturing yields;
    
    equipment failures;
    
    manufacturing personnel shortages;
    
    labor disputes;
    
    transportation disruptions;
    
    changes in import/export regulations;
    
    infrastructure failures at the facilities of our offshore contract manufacturer;
    
    natural disasters;
    
    acts of terrorism; and
    
    political instability.
   Because we do not have long-term commitments from many of our customers, we must estimate customer
demand, and errors in our estimates could have negative effects on our inventory levels and
revenues.
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Some of our customer contracts require us to manufacture products designed by our customers. While
we intend to convert these products to products of our own design, such transitions may be
difficult to implement and delays or difficulties in doing so could harm our operating results.
  Any failure to protect our intellectual property appropriately could reduce or eliminate any
competitive advantage we have.
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Risks Relating to Our Industry
 Our acquisition of JCA Technology and our own marketing and sales efforts have increased the volume
of our products used by the United States government. Our revenues in this market largely depend
upon the funding and implementation decisions of Congress and United States government agencies.
These decisions could change abruptly and without notice, unexpectedly reducing our current or
future revenues in this market.
  Our failure to compete effectively could reduce our revenues and margins.
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Certain of our products must conform to new and evolving environmental restrictions, including
conformance to Restriction on Hazardous Substances (RoHS) requirements. Delays or failure to
transition current products to environmental compliance for the broad range of countries where our
products are deployed may negatively impact revenues.
  Government regulation of the communications industry could limit the growth of the markets that we
serve or could require costly alterations of our current or future products.
  Risks Relating to Ownership of Our Stock
 The market price of our common stock has historically fluctuated and is likely to fluctuate in the
future.
  
    
    our financial performance or the performance of our competitors;
    
    the sale of common stock by affiliates or other stockholders;
    
    technological innovations or other trends or changes in the telecommunications
network, defense electronics or homeland security markets;
    
    successes or failures at significant product evaluations or site demonstrations;
    
    the introduction of new products by us or our competitors;
    
    acquisitions, strategic alliances or joint ventures involving us or our competitors;
    
    decisions by major participants in the communications industry not to purchase
products from us or to pursue alternative technologies;
    
    decisions by investors to de-emphasize investment categories, groups or strategies
that include our company or industry;
    
    market conditions in the industry, the financial markets and the economy as a whole; and
    
    low trading volume of our common stock.
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Northrop Grumman Corporation controls a large percentage of our common stock and is able to
significantly affect the outcome of matters requiring stockholder approval.
  Our certificate of incorporation, bylaws and arrangements with executive officers contain
provisions that could delay or prevent a change in control.
  
 Item 3. Qualitative and Quantitative Disclosures about Market Risk
  29




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Item 4. Controls and Procedures.
 (a) Evaluation of disclosure controls and procedures.
   (b) Changes in internal controls over financial reporting.
  30




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PART II. OTHER INFORMATION
 
 Item 6. Exhibits
 Number
    
    Description2.1(1)
    
    Asset Purchase Agreement by and among M/A-COM Tech, Inc., Tyco Electronics Logistics AG and
Endwave Corporation dated April 24, 2001.2.2(2)
    
    Asset Purchase Agreement by and among Signal Technology Corporation and Endwave Corporation dated
September 24, 2002.2.3(3)
    
    Purchase and Sale Agreement by and Among New Focus, Inc., Bookham Technology PLC and the Endwave
Corporation dated July 21, 2004.3.1(4)
    
    Amended and Restated Certificate of Incorporation effective October 20, 2000.3.2(5)
    
    Certificate of Amendment of Amended and Restated Certificate of Incorporation effective June 28,
2002.3.3(4)
    
    Amended and Restated Bylaws effective October 20, 2000.4.1(4)
    
    Form of specimen Common Stock Certificate.4.2(4)
    
    Investors Rights Agreement by and among Endwave Corporation and certain investors named therein
dated March 31, 2000.4.3(6)
    
    Registration Rights Agreement by and between Northrop Grumman Space & Mission Systems Corp. and
Endwave Corporation dated March 23, 2005.10.1(4)
    
    Form of Indemnity Agreement entered into by Endwave Corporation with each of its directors and
officers.10.2(4)*
    
    1992 Stock Option Plan.10.3(4)*
    
    Form of Incentive Stock Option under 1992 Stock Option Plan.10.4(4)*
    
    Form of Nonstatutory Stock Option under 1992 Stock Option Plan.10.5(4)*
    
    2000 Equity Incentive Plan, as amended.10.6(4)*
    
    Form of Stock Option Agreement under 2000 Equity Incentive Plan.10.7(4)*
    
    2000 Employee Stock Purchase Plan.10.8(4)*
    
    Form of 2000 Employee Stock Purchase Plan Offering.10.9(11)*
    
    2000 Non-Employee Directors Stock Option Plan, as amended.10.10(4)*
    
    Form of Nonstatutory Stock Option Agreement under the 2000 Non-Employee Director Plan.10.11(7)*
    
    Description of Compensation Payable to Non-Employee Directors.10.12(7)*
    
    2005 Base Salaries for Named Executive Officers.10.13(7)*
    
    2005 Executive Incentive Compensation Plan.10.14(8)*
    
    Executive Officer Severance and Retention Plan.
 31




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Number
    
    Description10.15(8)*
    
    Transaction Incentive Plan.10.16(4)
    
    License Agreement by and between TRW Inc. and TRW Milliwave Inc. dated February 28, 2000.10.17(4)
    
    Production Agreement by and between TRW Inc. and Endwave Corporation dated March 31, 2000 for the
performance of the Development Agreement by and between TRW Inc. and Nokia Telecommunications OY
dated January 28, 1999.10.18(4)
    
    Services Agreement by and between TRW Inc. and Endwave Corporation dated March 31, 2000.10.19(9)
    
    Development Agreement by and between Nokia and Endwave Corporation dated August 14, 2003.10.20(10)
    
    Purchase Agreement by and between Nokia Corporation and Endwave Corporation dated December 31,
2003.10.21(5)
    
    Industrial Lease by and between The Irvine Company and Endwave Corporation dated January 28, 2004.10.22(5)
    
    Amended and Restated Supply Agreement by and between Northrop Grumman Space and Mission Systems
Corp. and Endwave Corporation dated March 26, 2004.10.23(6)
    
    Settlement and Release Agreement by and between Northrop Grumman Space & Mission Systems Corp. and
Endwave Corporation dated March 23, 2005.10.24(12)
    
    Manufacturing and Supply Agreement by and between HANA Microelectronics and Endwave Corporation
dated September 18, 2002.31.1
    
    Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Previously filed as an exhibit to Endwave Corporations Current Report on Form 8-K filed
on May 8, 2001.(2)
    
    Previously filed as an exhibit to Endwave Corporations Current Report on Form 8-K filed on
October 11, 2002.(3)
    
    Previously filed as an exhibit to Endwave Corporations Current Report on Form 8-K filed on
August 4, 2004.(4)
    
    Previously filed with Endwave Corporations Registration Statement on Form S-1 (Registration
No. 333-41302).(5)
    
    Previously filed with Endwave Corporations Quarterly Report on Form 10-Q for the quarter
ended March 31, 2004.(6)
    
    Previously filed as an exhibit to Endwave Corporations Current Report on Form 8-K filed on
March 25, 2005.(7)
    
    Previously filed as an exhibit to Endwave Corporations Current Report on Form 8-K filed on
February 3, 2005.(8)
    
    Previously filed with Endwave Corporations Quarterly Report on Form 10-Q for the quarter
ended September 30, 2003.(9)
    
    Previously filed with an amendment to Endwave Corporations Quarterly Report on Form 10-Q for
the quarter ended September 30, 2003 filed on August 4, 2004.(10)
    
    Previously filed with an amendment to Endwave Corporations Annual Report on Form 10-K for
the fiscal year ended December 31, 2003 filed on August 4, 2004.(11)
    
    Previously filed with Endwave Corporations Annual Report on Form 10-K for the fiscal year
ended December 31, 2004.(12)
    
    Previously filed with an amendment to Endwave Corporations Quarterly Report on Form 10-Q for
the quarter ended March 31, 2005 filed on May 13, 2005.*
    
    Indicates a management contract or compensatory plan or arrangement.
    
    Confidential treatment has been requested for a portion of this exhibit. 32




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SIGNATURES
  ENDWAVE CORPORATIONDate: September 23, 2005By:
    /s/ Edward A. Keible, Jr.Edward A. Keible, Jr.President and Chief Executive OfficerBy:
    /s/ Julianne M. BiaginiJulianne M. BiaginiExecutive Vice President
and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer) 33




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Index to Exhibits
 Number
    
    Description31.1
    
    Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.