---

---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

---

FORM 10-Q

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

For the quarterly period ended September 30,
2000

OR

| | [   ] | 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)

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ENDWAVE CORPORATION(Exact name of registrant as specified in its charter)

---

| | Delaware(State of
      incorporation) |  | 95-4333817(I.R.S.
      Employer Identification No.) | 
| | -------------------------------------- |  | ---------------------------------------------------- | 

| | 321 Soquel
      Way,Sunnyvale, CA(Address of principal executive
      offices) |  | 94085(Zip code) | 
| | -------------------------------------------------------------------------------- |  | --------------- | 

(408) 522-3100(Registrant's telephone
number, including area code)

NONE(Former name, former address and
former fiscal year, if changed since last report)

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) Yes [x] No [  ], and (2) has been subject to
such filing requirements for the past 90 days. Yes [  ] No
[x].

The
number of shares outstanding of the Registrant's Common Stock as of November 29,
2000 was 34,116,182 shares.

---

---

---

ENDWAVE CORPORATION

INDEX

|         |  |                                                                                                                                            | Page
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ | ----
|PART I.  |  | FINANCIAL
    INFORMATION                                                                                                                  |     
|Item 1.  |  | Financial Statements
      (Unaudited)                                                                                                     |     
|         |  | Unaudited Condensed Balance Sheets
      as of September 30, 2000 and
            December 31, 1999                                        | 3   
|         |  | Unaudited Condensed Statements of
      Operations for the three months
      and      nine months ended September 30,
      2000 and 1999 | 4   
|         |  | Unaudited Condensed Statements of
      Cash Flows for the nine months
      ended      September 30, 2000 and 1999                        | 5   
|         |  | Notes to Unaudited Condensed
      Financial Statements                                                                                    | 6   
|Item 2.  |  | Management's Discussion and Analysis
      of Financial Condition and       Results
      of Operations                                    | 9   
|Item 3.  |  | Qualitative and Quantitative
      Disclosure about Market Risk                                                                            | 12  
|         |  |                                                                                                                                            |     
|PART II. |  | OTHER INFORMATION                                                                                                                          |     
|Item 1.  |  | Legal Proceedings                                                                                                                          | 12  
|Item 2.  |  | Changes in Securities and Use of
      Proceeds                                                                                            | 12  
|Item 3.  |  | Defaults Upon Senior Securities                                                                                                            | 13  
|Item 4.  |  | Submission of Matters to a Vote of
      Security Holders                                                                                  | 13  
|Item 5.  |  | Other Information                                                                                                                          | 13  
|Item 6.  |  | Exhibits and Reports on Form 8-K                                                                                                           | 13  

|          |   
|--------- | --
|SIGNATURE | 14
|          |   

---

PART I. FINANCIAL INFORMATION

Item 1.   Financial
Statements

ENDWAVE CORPORATIONCONDENSED BALANCE
SHEETS(In thousands, except share
amounts)(unaudited)

|                                                                                                                                                                         |  | September 30,2000 |         | December
      31,1999 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------- | ---------------------- | -
|                                                                                                                                                                         |  |                   |         |                        |  
|ASSETS                                                                                                                                                                   |  |                   |         |                        |  
|Current assets:                                                                                                                                                          |  |                   |         |                        |  
|Cash and cash equivalents                                                                                                                                                |  | $                 | 20,085  |                        | $
|Accounts receivable, net                                                                                                                                                 |  |                   | 6,150   |                        |  
|Accounts receivable from
      affiliates                                                                                                                                |  |                   | 3,402   |                        |  
|Inventories                                                                                                                                                              |  |                   | 17,831  |                        |  
|Other current assets                                                                                                                                                     |  |                   | 1,122   |                        |  
|                                                                                                                                                                         |  |                   |         |                        |  
|Total
      current assets                                                                                                                                               |  |                   | 48,590  |                        |  
|Property and equipment, net                                                                                                                                              |  |                   | 18,490  |                        |  
|Goodwill and other intangible
      assets, net                                                                                                                          |  |                   | 99,827  |                        |  
|Other assets, net                                                                                                                                                        |  |                   | 50      |                        |  
|                                                                                                                                                                         |  |                   |         |                        |  
|                                                                                                                                                                         |  | $                 | 166,957 |                        | $
|                                                                                                                                                                         |  |                   |         |                        |  
|LIABILITIES AND
      STOCKHOLDERS' EQUITY                                                                                                                               |  |                   |         |                        |  
|                                                                                                                                                                         |  |                   |         |                        |  
|Current liabilities:                                                                                                                                                     |  |                   |         |                        |  
|Accounts payable                                                                                                                                                         |  | $                 | 2,333   |                        | $
|Accounts payable to affiliates                                                                                                                                           |  |                   | 13,709  |                        |  
|Accrued liabilities                                                                                                                                                      |  |                   | 3,773   |                        |  
|Deferred revenue                                                                                                                                                         |  |                   | 391     |                        |  
|Capital lease obligations,
      current                                                                                                                                 |  |                   | 910     |                        |  
|                                                                                                                                                                         |  |                   |         |                        |  
|Total
      current liabilities                                                                                                                                          |  |                   | 21,116  |                        |  
|Deferred revenue                                                                                                                                                         |  |                   | 251     |                        |  
|Deferred income taxes                                                                                                                                                    |  |                   | -       |                        |  
|Capital lease obligations, less
      current portion                                                                                                                    |  |                   | 1,813   |                        |  
|                                                                                                                                                                         |  |                   |         |                        |  
|Stockholders' equity:                                                                                                                                                    |  |                   |         |                        |  
|Convertible preferred stock:
      $0.001 par value; and 27,000,000 shares
                   authorized
      and 25,881,302 and 0 issued and outstanding, respectively |  |                   | 187,167 |                        |  
|Common stock, $0.001 par value
      per share; 50,000,000 shares authorized,
                   675,354
      and 0 issued and outstanding, respectively                |  |                   | 1       |                        |  
|Additional paid-in capital                                                                                                                                               |  |                   | 21,997  |                        |  
|Advances from TRW, Inc.                                                                                                                                                  |  |                   | -       |                        |  
|Deferred stock compensation                                                                                                                                              |  |                   | (16,675 | )                      |  
|Accumulated deficit                                                                                                                                                      |  |                   | (48,713 | )                      |  
|                                                                                                                                                                         |  |                   |         |                        |  
|Total
      stockholders' equity                                                                                                                                         |  |                   | 143,777 |                        |  
|                                                                                                                                                                         |  |                   |         |                        |  
|                                                                                                                                                                         |  | $                 | 166,957 |                        | $
|                                                                                                                                                                         |  |                   |         |                        |  

See accompanying notes.

---

ENDWAVE CORPORATIONCONDENSED
STATEMENTS OF OPERATIONS(In thousands, except share and per share
amounts)(unaudited)

|                                                                                                                           |  | Three
      Months EndedSeptember 30, |         | Nine
      Months EndedSeptember 30, |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------- | ------- | ------------------------------------ | -
|                                                                                                                           |  |                                       |         |                                      |  
|                                                                                                                           |  | 2000                                  |         | 1999                                 |  
|                                                                                                                           |  |                                       |         |                                      |  
|Revenues:                                                                                                                  |  |                                       |         |                                      |  
|Product revenues ($4,913,
      $3,049, $13,589 and $4,858
      from             affiliates,
      respectively)          |  | $                                     | 12,257  |                                      | $
|Development fees                                                                                                           |  |                                       | 233     |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|Total
      revenues                                                                                                       |  |                                       | 12,490  |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|Costs and expenses:                                                                                                        |  |                                       |         |                                      |  
|Cost of product revenues
      ($5,386, $2,458, $14,382 and $3,968
                   from
      affiliates, respectively) |  |                                       | 15,715  |                                      |  
|Research and development ($0,
      $0, $781 and $0 from affiliates,
                   respectively)                      |  |                                       | 2,939   |                                      |  
|Selling, general and
      administrative ($0, $71, $310 and $296 from
                   affiliates,
      respectively)  |  |                                       | 2,009   |                                      |  
|Amortization of goodwill and
      other intangible assets                                                                 |  |                                       | 4,802   |                                      |  
|In-process research and
      development                                                                                  |  |                                       | -       |                                      |  
|Amortization of deferred stock
      compensation                                                                          |  |                                       | 2,633   |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|Total
      costs and expenses                                                                                             |  |                                       | 28,098  |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|Loss from operations                                                                                                       |  |                                       | (15,608 | )                                    |  
|Interest income, net                                                                                                       |  |                                       | 188     |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|Net loss before income tax                                                                                                 |  |                                       | (15,420 | )                                    |  
|Income tax benefit (expense)                                                                                               |  |                                       | -       |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  
|Net loss                                                                                                                   |  | $                                     | (15,420 | )                                    | $
|                                                                                                                           |  |                                       |         |                                      |  
|Net loss applicable to common
      stockholders subsequent to the
            merger                                      |  | $                                     | (15,420 | )                                    |  
|                                                                                                                           |  |                                       |         |                                      |  
|Basic and diluted net loss per
      share                                                                                 |  | $                                     | (22.99  | )                                    |  
|                                                                                                                           |  |                                       |         |                                      |  
|Shares used in computing of
      basic and diluted net loss per share                                                     |  |                                       | 670,599 |                                      |  
|                                                                                                                           |  |                                       |         |                                      |  

See accompanying notes.

---

ENDWAVE CORPORATIONCONDENSED
STATEMENTS OF CASH FLOWS(In
thousands)(unaudited)

|                                                                                                                            |  | Nine
      Months EndedSeptember 30, |        
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | -------
|                                                                                                                            |  |                                      |        
|                                                                                                                            |  | 2000                                 |        
|                                                                                                                            |  |                                      |        
|Operating
      activities:                                                                                                 |  |                                      |        
|Net loss                                                                                                                    |  | $                                    | (42,821
|Adjustments to reconcile net
      loss to net cash used
      by             operating
      activities:                   |  |                                      |        
|Depreciation                                                                                                                |  |                                      | 1,967  
|Amortization
      of goodwill and other intangible assets                                                                  |  |                                      | 10,007 
|Amortization
      of deferred stock compensation                                                                           |  |                                      | 3,543  
|In-process
      research and development                                                                                   |  |                                      | 11,700 
|Deferred
      income taxes                                                                                                 |  |                                      | (327   
|Other
      non-cash charges                                                                                                |  |                                      | 1      
|Changes
      in operating assets and liabilities:                                                                          |  |                                      |        
|Accounts
      receivable, net                                                                                              |  |                                      | (5,286 
|Accounts
      receivable, affiliates                                                                                       |  |                                      | 1,981  
|Inventories                                                                                                                 |  |                                      | (9,610 
|Other
      assets                                                                                                          |  |                                      | (656   
|Accounts
      payable                                                                                                      |  |                                      | 8,079  
|Accounts
      payable, affiliates                                                                                          |  |                                      | (2,169 
|Other
      accrued liabilities                                                                                             |  |                                      | 2,233  
|Deferred
      revenue                                                                                                      |  |                                      | (62    
|                                                                                                                            |  |                                      |        
|Net cash used in operating
      activities                                                                                 |  |                                      | (21,420
|                                                                                                                            |  |                                      |        
|Investing
      activities:                                                                                                 |  |                                      |        
|Purchases of property and
      equipment                                                                                   |  |                                      | (4,874 
|Proceed from sales of fixed
      assets                                                                                    |  |                                      | 3      
|                                                                                                                            |  |                                      |        
|Net cash used in investing
      activities                                                                                 |  |                                      | (4,871 
|                                                                                                                            |  |                                      |        
|Financing
      activities:                                                                                                 |  |                                      |        
|Payments under capital lease
      obligations                                                                              |  |                                      | (918   
|Net advances from TRW Inc.                                                                                                  |  |                                      | 5,993  
|Net cash acquired in
      conjunction with the acquisition of Endgate                                                      |  |                                      | 20,882 
|Net proceeds from issuance of
      preferred stock in conjunction with
                   the
      acquisition of Endgate |  |                                      | 19,985 
|Proceeds from stock options
      exercised                                                                                 |  |                                      | 61     
|                                                                                                                            |  |                                      |        
|Net cash provided by financing
      activities                                                                             |  |                                      | 46,003 
|                                                                                                                            |  |                                      |        
|                                                                                                                            |  |                                      |        
|Net increase in cash and cash
      equivalents                                                                             |  |                                      | 19,712 
|Cash and cash equivalents at
      beginning of period                                                                      |  |                                      | 373    
|                                                                                                                            |  |                                      |        
|Cash and cash equivalents at end
      of period                                                                            |  | $                                    | 20,085 
|                                                                                                                            |  |                                      |        
|                                                                                                                            |  |                                      |        
|Supplemental cash flow
      information:                                                                                   |  |                                      |        
|Cash paid for interest                                                                                                      |  | $                                    | 943    
|                                                                                                                            |  |                                      |        
|                                                                                                                            |  |                                      |        
|Supplemental non-cash
      investing and
      financing      activity:                                                    |  |                                      |        
|Property and equipment acquired
      under capital leases                                                                  |  | $                                    | 1,936  
|                                                                                                                            |  |                                      |        

See accompanying notes.

---

ENDWAVE CORPORATIONNOTES TO CONDENSED
FINANCIAL STATEMENTS(unaudited)

DESCRIPTION OF BUSINESS

1. Basis of Presentation

On
March 31, 2000, Endgate merged with TRW Milliwave Inc., a formerly
wholly-owned subsidiary of TRW Inc. In the merger, TRW Milliwave Inc. merged
into Endgate and Endgate issued 13,963,063 shares of its capital stock to
TRW Inc. in exchange for TRW's shares in TRW Milliwave Inc. As a result, Endgate
was the surviving corporation in the merger and TRW Milliwave Inc. ceased to
exist as a separate legal entity. However, because TRW Inc. owned more than half
of Endgate's outstanding capital stock immediately after the merger, TRW
Milliwave Inc. is treated as the acquiring company for accounting purposes. As a
result, Endgate ceased to be a separate accounting entity as of the date of the
merger, and the combined company's financial statements prior to the merger are
those of TRW Milliwave Inc.. In connection with the merger, the combined company
was renamed Endwave Corporation.

The
accompanying unaudited condensed financial statements for the nine months ended
September 30, 2000 are derived from the historical financial statements of
Endwave Corporation. Such financial information is based on the historical
financial information of TRW Milliwave Inc. for the nine months ended
September 30, 2000 plus the effect of reflecting the acquisition of Endgate
as of March 31, 2000 using the purchase method of accounting. The
accompanying unaudited condensed financial statements for the nine months ended
September 30, 1999 are derived from the historical unaudited financial
statements of TRW Milliwave Inc.

Giving
effect to the merger retroactively, the Company has no outstanding common stock
prior to the merger. Accordingly, a basic net loss per share has not been
presented for periods prior to March 31, 2000. The net loss applicable to
common stockholders subsequent to the merger represents the net loss incurred
since March 31, 2000, including the charge for purchased in-process
research and development. The shares used in computing the net loss per share is
the weighted average shares outstanding since the merger date. Since the Company
incurred losses for all periods presented, the convertible preferred stock would
be anti-dilutive and accordingly, diluted net loss per share is the same as
basic net loss per share.

2. Unaudited Interim Financial
Information

The
accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not contain all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the accompanying unaudited
condensed financial statements reflect all adjustments (consisting of only
normal recurring adjustments) considered necessary for a fair presentation of
the company's condensed financial position as of September 30, 2000 and
December 31, 1999, the condensed results of its operations for the three
and nine month periods ended September 30, 2000 and 1999 and its cash flows
for the nine months ended September 30, 2000 and 1999. Condensed operating
results for the three- and nine-month periods ended September 30, 2000 are
not necessarily indicative of the operating results that may be expected for the
year ending December 31, 2000 or other future periods.

These
condensed financial statements should be read in conjunction with the audited
financial statements of TRW Milliwave Inc. and Endgate Corporation included in
the Company's Registration Statement on Form S-1, filed with the Securities and
Exchange Commission and effective as of October 16, 2000. The condensed balance
sheet at December 31, 1999 is derived from audited statements of TRW
Milliwave Inc. as of that date.

3. Revenue Recognition and Warranty

The
Company recognizes product revenue at the time title passes, which is upon
product shipment and provides for estimated warranty expense at the time of
sale. The Company's customers are primarily wireless systems integrators and
equipment manufacturers and the Company's products are integrated into the
products of its customers. There are no significant acceptance requirements or
post-shipment obligations on the part of Endwave.

---

The Company recognizes development fees ratably over
the estimated term of the development period. Up-front fees, if any, associated
with development agreements are recognized over the estimated development and
production period. In no event are revenues recognized prior to becoming payable
by the customer. The costs incurred under these agreements are included in
research and development expenses.

4. Amortization of Purchased
Intangibles

In
connection with the merger of TRW Milliwave Inc. and Endgate Corporation, the
company has recorded the amortization of purchased intangibles over the
estimated useful lives as follows (in years):

|                     |  | EstimatedUseful Life |  
|-------------------- |  | -------------------- | -
|                     |  |                      |  
|Purchased technology |  |                      | 6
|Customer list        |  |                      | 5
|Acquired workforce   |  |                      | 5
|Goodwill             |  |                      | 6

5. Inventories

Inventories
are stated at the lower of cost or market (on a first-in, first-out basis) and
are comprised of the following as of September 30, 2000 (in
thousands):

|Raw materials   |  | $ | 14,243 | 
|--------------- |  | - | ------ | 
|Work in process |  |   | 2,569  | 
|Finished goods  |  |   | 1,019  | 
|                |  |   |       
|                |  | $ | 17,831 | 
|                |  |   |       

6. Property and Equipment

Property
and equipment consists of the following as of September 30, 2000 (in
thousands):

|Land                                                                                                                         |  | $ | 200    |  
|---------------------------------------------------------------------------------------------------------------------------- |  | - | ------ | -
|Building                                                                                                                     |  |   | 3,119  |  
|Computer equipment                                                                                                           |  |   | 1,346  |  
|Software                                                                                                                     |  |   | 1,489  |  
|Furniture and fixtures                                                                                                       |  |   | 338    |  
|Leasehold improvements                                                                                                       |  |   | 254    |  
|Laboratory, demonstration and
      manufacturing equipment                                                                  |  |   | 20,383 |  
|                                                                                                                             |  |   |       
|                                                                                                                             |  |   | 27,129 |  
|Less accumulated depreciation
      and amortization (including amortization of assets held
            under capital lease) |  |   | (8,639 | )
|                                                                                                                             |  |   |       
|Property and equipment, net                                                                                                  |  | $ | 18,490 |  
|                                                                                                                             |  |   |       

7. Recent Accounting Pronouncements

In
June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133 "Accounting
for Derivative Financial Instruments and Hedging Activities" and in
June 2000 the FASB issued SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an amendment of FASB
Statement No. 133." These Statements establish methods of accounting for
derivative financial instruments and hedging activities. Because Endwave
currently holds no derivative financial instruments and does not engage in
hedging activities, adoption of these Statements will not have a significant
impact on our financial position, results of operations or cash flows. We will
adopt SFAS Nos. 133 and 138 in the first quarter of 2001.

In
December 1999, the SEC issued Staff Accounting Bulletin, or SAB 101,
"Revenue Recognition," which provides guidance on the recognition, presentation,
and disclosure of revenue in financial statements filed with the SEC.
SAB 101 outlines the basic criteria that must be met to recognize revenue
and provides guidance for disclosure related to revenue recognition policies.
The Company adopted SAB 101 in the second quarter of 2000.

---

In
March 2000, the FASB issued Interpretation No. 44 ("FIN 44") "Accounting for
Certain Transactions involving Stock Compensation-an Interpretation of APB
Opinion No. 25." FIN 44 clarifies the application of Opinion 25 for (a) the
definition of an employee for purposes of applying Opinion 25, (b) the criteria
for determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequence of various modifications to the terms of a previously
fixed stock option or award and (d) the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 was effective July 1,
2000 but certain conclusions cover specific events that occur after either
December 15, 1998 or January 12, 2000. We believe that FIN 44
will not have a material effect on our historical financial position or results
of operations.

8.   Segment
Disclosures

The
Company operates in a single industry segment. The Company's geographic sales
for the period reported on were as follows (in thousands):

|              |  | Three
      Months ended September 30, |       
|------------- |  | -------------------------------------- | ------
|              |  |                                        |       
|              |  | 2000                                   |       
|              |  |                                        |       
|United States |  | $                                      | 9,513 
|Europe        |  |                                        | 2,744 
|              |  |                                        |       
|              |  |                                        |       
|Total         |  | $                                      | 12,257
|              |  |                                        |       

|              |  | Nine
      Months ended September 30, |       
|------------- |  | ------------------------------------- | ------
|              |  |                                       |       
|              |  | 2000                                  |       
|              |  |                                       |       
|United States |  | $                                     | 23,611
|Europe        |  |                                       | 3,182 
|              |  |                                       |       
|              |  |                                       |       
|Total         |  | $                                     | 26,793
|              |  |                                       |       

Sales
to non-U.S. customers were 22.4% and 0% of net revenue for the three months
ended September 30, 2000 and 1999, respectively, and 11.9% and 0% of net
revenue for the nine months ended September 30, 2000 and 1999,
respectively.

For
the three and nine month periods ended September 30, 2000, two non-U.S.
customers each contributing in excess of 10% to the total sales accounted for
30.3% and 26.6% of total sales respectively.

For
the nine month period ended September 30, 2000, two non-U.S. customers each with
accounts receivable in excess of 10% accounted for 29.4% of total accounts
receivable for the Company.

9. Subsequent Events

On
October 2, 2000, DMC Stratex Networks purchased 428,572 shares of the
Company's common stock for total consideration of approximately
$6.0 million.

On
October 20, 2000, 6,000,000 shares of Common Stock were issued as part
of the Company's initial public offering at a price of $14.00 per share, before
underwriting discounts and commissions of $0.98 per share. On November 21, 2000,
we sold an additional 900,000 shares of our common stock to the underwriters of
our initial public offering pursuant to the exercise by the underwriters of the
overallotment option granted to them in connection with the offering. Such
additional 900,000 shares were sold at $14.00 per share before underwriting
discounts and commissions of $0.98 per share.

As
part of the initial public offering consummated October 20, 2000, all
25,881,302 previously outstanding shares of the Company's preferred stock were
converted into the same number of shares of the Company's common
stock.

In
addition, warrants to purchase 223,203 shares of preferred common stock
were exercised for total consideration of $1.1 million on October 20,
2000 and converted into the same number of shares of common stock on the same
day.

---

Item 2.   Management's
Discussion and Analysis of Financial Condition and Results of
Operations

This
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve risks and
uncertainties. The statements contained in this report on Form 10-Q that
are not purely historical include forward-looking statements, including
statements regarding our expectations, beliefs, intentions or strategies
regarding the future. All forward-looking statements included in this document
are based on information available to us on the date hereof, and we assume no
obligation to update any such forward-looking statements. Our actual results
could differ materially from those described in our forward-looking statements.
Readers are cautioned not to place undue reliance on these forward looking
statements. In the past, our operating results have fluctuated and are likely to
continue to fluctuate in the future.

The
following discussion should be read together with our financial statements,
notes to those financial statements included elsewhere in this Form 10-Q, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations in our Registration Statement on Form S-1 declared effective on
October 16, 2000 by the Securities and Exchange Commission.

Overview

We
provide RF subsystems that enable the transmission and reception of data signals
in broadband wireless systems. We sell our products to wireless systems
integrators that provide the broadband wireless equipment used by communications
service providers to offer data services. Our customers use our products in high
speed cellular backhaul, point-to-point access and point-to-multipoint access
applications. Wireless systems integrators who have used our products in their
broadband wireless systems include Allgon, Hughes Network Systems, Nokia, Nortel
Networks, P-Com, Rockwell International, Toshiba and WinNet MCS.

On
March 31, 2000, Endgate merged with TRW Milliwave Inc., a wholly-owned
subsidiary of TRW Inc. Endgate was the surviving corporation in the merger and
Milliwave ceased to exist as a separate legal entity. However, because TRW owned
more than half of Endgate's outstanding capital stock immediately after the
merger, Milliwave is treated as the acquiring company for accounting purposes.
As a result, Endgate ceased to be a separate accounting entity as of the date of
the merger. In connection with the merger, we renamed the combined company
Endwave Corporation. When we refer to our business or other corporate activities
prior to March 31, 2000, the date of the merger, we are generally referring
to Endgate's business and corporate activities unless otherwise
specified.

We
depend, and expect to remain dependent, on a small number of wireless systems
integrators for sales of our products. For the nine months ended September 30,
2000, sales attributable to Nortel Networks, Nokia, Hughes Network Systems and
Rockwell International accounted for 31%, 28%, 15% and 11%, respectively. We had
production contracts with TRW, under which we delivered products to Nokia and
Nortel Networks in satisfaction of TRW's direct contractual obligations. In
November 2000 we entered into a production agreement for RF subsystems directly
with Nokia. Our agreement with TRW under which we delivered products directly to
Nortel Networks in satisfaction of TRW's direct contractual obligations expired
in October 2000, together with TRW's corresponding agreement with Nortel
Networks. We are, however, presently still delivering products to Nortel
Networks in satisfaction of customer orders placed prior to the expiration of
these agreements. We are in the process of negotiating a new direct production
contract with Nortel Networks, however we may not be able to successfully
negotiate this contract on favorable terms, or at all.

Our
revenues consist of product revenues and development fees. Product revenues are
generated through sales of our custom and standard RF subsystem products to
wireless systems integrators and equipment manufacturers and are recognized upon
product shipment. We sell our products through our direct sales force and
network of independent international sales representatives. Development fees are
generated by developing product prototypes and custom products pursuant to
development agreements that provide for payment of a portion of our research and
development or other expenses. Any up-front development fees paid under a
development contract are recognized ratably over the expected term of the
contract, except that in no event are revenues recognized prior to becoming
billable under the terms of the contract. These agreements, which we enter into
with key customers from time to time if we expect them to result in a
significant product order, are for one-time projects and are non-recurring. We
expect development fees to represent a decreasing percentage of our total
revenues in future periods.

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Results of Operations





Our
revenues consist of product revenues and development fees. Product revenues are
generated through sales of our custom and standard RF subsystem products to
wireless system integrators and equipment manufacturers. Product revenues were
$12.3 million for the three months ended September 30, 2000, a 193%
increase from $4.2 million for the same period in 1999. For the three
months ended September 30, 2000, sales attributable to Nokia, Nortel
Networks, Hughes Network Systems and Rockwell International accounted for 29%,
28%, 14% and 12%, respectively. Product revenues were $26.8 million for the
nine months ended September 30, 2000, a 257% increase from
$7.5 million for the same period in 1999. For the nine months ended
September 30, 2000, sales attributable to Nortel Networks, Nokia, Hughes Network
Systems and Rockwell International accounted for 31%, 28%, 15%, and 11%,
respectively. These increases are primarily attributable to an increase in the
number of transceiver and antenna products sold. We have production and supply
agreements with TRW, under which we deliver products to Nokia and Nortel
Networks, in satisfaction of TRW's direct contractual relationship with
them.

Development
fees are generated by developing product prototypes and custom products pursuant
to develop agreements that provide for payment of a portion of our research and
development or other expenses. Development fees were $233,000 for the three
months ended September 30, 2000. There were no development fees for the
three months period ended September 30, 1999. Development fees were
$1.2 million for the nine months ended September 30, 2000. There were
no development fees for the nine months period ended September 30, 1999.
The increases in development fees noted for both the three months and nine
months ended September 30, 2000 were attributable to development of a
custom designed product for Hughes Network Systems. We expect development fees
to represent a decreasing percentage of our total revenues in future
periods.



Cost
of product revenues. Cost of product revenues consists primarily of the
costs of direct materials and labor utilized to assemble and test our products,
costs associated with procurement, production control, quality assurance and
manufacturing engineering, costs associated with maintaining our manufacturing
facilities and costs associated with warranty returns. Cost of product revenues
for the three months ended September 30, 2000 was $15.7 million, a
362% increase from $3.4 million for the same period in 1999. Cost of
product revenues for the nine months ended September 30, 2000 was
$34.9 million, a 378% increase from $7.3 million for the same period
in 1999. The increase in costs were attributable primarily to a significant
increase in the number of RF subsystems and antenna products sold and
investments made during the second and third quarter of 2000 to increase our
manufacturing capacity. The decreases as a percentage of product revenues were
primarily attributable to increased utilization of our manufacturing capacity.
Our cost of product revenues has historically exceeded our product revenues due
in part to the low volumes of products we have sold and our investments in
increasing manufacturing capacity.

Research
and development expenses. Research and development expenditures for the
three months ended September 30, 2000 was $2.9 million, an increase
from $114,000 for the same period in 1999. This increase was primarily
attributable to the acquisition of Endgate's research and development operations
in March 2000. Research and development expenditures for the nine months ended
September 30, 2000 was $6.7 million, an increase from $256,000 for the
same period in 1999. Because the market for our products is characterized by
rapidly changing technology, industry standards and customer demands, we expect
our research and development expenses to continue to increase in future
periods.

Selling,
general and administrative expenses. Selling, general and administrative
expenses consist primarily of salaries and related expenses for executive,
sales, marketing, finance, accounting, information technology, facilities and
human resources personnel; professional fees; and, promotional activities.
Selling, general and administrative expenditures for the three months ended
September 30, 2000 was $2.0 million, a 307% increase from $491,000 for
the same period in 1999. Selling, general and administrative expenditures for
the nine months ended September 30, 2000 was $5.2 million, a 189%
increase from $1.8 million for the same period in 1999. These increases
were partly due to the merger between Endgate and TRW Milliwave Inc., in March
2000 as well as the hiring of additional sales and administrative personnel as
our production and sales activities have grown. We

---

anticipate that selling, general and administrative
expenses will continue to increase in future periods for the reasons mentioned
above.

Amortization
of intangible assets. The merger between Endgate and TRW Milliwave Inc. was
recorded using the purchase method of accounting. In connection with the
purchase, Milliwave recorded goodwill of $80.2 million and a purchase cost
in other intangible assets of $23.6 million. We are amortizing goodwill and
other intangible assets acquired on a straight-line basis of five to six years.
Amortization of intangibles for the three months ended September 30, 2000
was $4.8 million, a 1,150% increase from $384,000 for the same period in
1999. Amortization of intangibles for the nine months ended September 30,
2000 was $10.0 million, a 733% increase from $1.2 million for the same
period in 1999.

In-process
research and development expense.The Company allocated $11.7 million
to in-process-research and development expense.

Amortization
of deferred stock compensation. Deferred stock compensation charges consist
of charges related to the difference between deemed fair market values on the
date of employee option grants and the option price. Amortization of deferred
stock compensation for the three months ended September 30, 2000 was
$2.6 million; and, for the nine months ended September 30, 2000, was $3.5
million. There was no deferred stock compensation charge in the three months and
nine months ended September 30,1999.



Interest
income, net. Interest income, net, for the three months ended
September 30, 2000 was $188,000 and for the nine months ended
September 30, 2000 was $541,000. There was no interest income for the three
and nine months ended September 30, 1999. The increase in interest income
for both periods in fiscal 2000 compared to the same periods in fiscal 1999 was
due to interest earned on invested cash, offset by interest expense related to
capital leases.

Liquidity and Capital Resources

Our
principal source of liquidity as of September 30, 2000 consisted of
approximately $20.1 million in cash and cash equivalents. Since our
inception, we have financed our operations through private sales of debt and
equity securities, bank borrowings and equipment lease financing.

During
the nine months ended September 30, 2000, we used $21.4 million from
operating activities, as compared to the same period in the prior year where we
used $569,000 in operating activities. The use of cash in the nine months ended
September 30, 2000 compared to the same period 1999 was primarily due to a
higher operating loss, an increase in accounts receivable offset by an increase
in accounts payable and accrued liabilities. We anticipate that accounts
receivable and accounts payable will continue to increase in the future if our
business continues to grow and revenues continue to rise.

Investments
in property and equipment decreased to $4.9 million in the nine months
ended September 30, 2000 from $6.3 million in the same period in 1999.
Investments consisted primarily of purchases of computer and manufacturing
equipment and tenant improvements related to our new research and development
facility. We expect our capital expenditures to remain at high levels as we
further expand our manufacturing facilities, research and development efforts
and our employee base. The timing and amount of future capital expenditures will
depend primarily on our future growth.

We
raised net proceeds of $88.5 million from our issuance of 6.9 million
shares of common stock as part of the Company's initial public offering from the
shares sold by us on October 20 and November 21, 2000. We anticipate using these
net proceeds for working capital and other general corporate purposes, including
financing growth, product development and capital expenditures. Should the
opportunity arise, we may also use a portion of the net proceeds to fund
acquisitions of, or investments in, businesses, partnerships, products or
technologies that complement or expand our businesses.

We
believe that our existing cash and investment balances and anticipated cash
flows from operations will be sufficient to meet our operating and capital
requirements for at least the next twelve months. However, we could be required,
or could elect, to raise additional funds during that period and we may need to
raise additional capital in the future. Additional capital may not be available
at all, or may only be available on terms unfavorable to us.

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Item 3.   Qualitative and
Quantitative Disclosures about Market Risk

As
of September 30, 2000, the Company maintained cash and cash equivalents of
$20.1 million. All investments were of a short duration and there is
minimal exposure to fluctuations in interest rates.

The
Company's sales to customers in foreign countries are denominated in U.S.
dollars. Accordingly, the company is not directly exposed to market risks from
currency exchange rate fluctuations. However, significant fluctuations in
foreign exchange rates relative to the U.S. dollar could impact our customers'
ability to pay for our products. Any changes in foreign exchange rates relative
to the U.S. dollar could have a material adverse effect on the Company's
financial position, results of operations and cash flow.

PART II. OTHER INFORMATION

Item 1.   Legal
Proceedings

The
Company is not aware of any pending legal proceedings against it that,
individually or in the aggregate, would have a material adverse effect on its
business, results of operations or financial condition. We may in the future be
party to litigation arising in the course of our business, including claims that
we allegedly engaged in unfair hiring practices or infringed third-party
trademarks and other intellectual property rights. These claims, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources.

Item 2.   Changes in
Securities and Use of Proceeds



On
October 16, 2000, the Securities and Exchange Commission declared effective
a Form S-1 Registration Statement (File No. 333-41302) filed by the Company
in connection with the initial public offering of an aggregate of 6.0 million
shares of its common stock. Such offering commenced on October 17, 2000 and
closed on October 20, 2000 (with respect to 6.0 million shares) which
shares were sold at a price of $14.00 per share for the aggregate price of
$84.0 million. On November 21, 2000, we sold an additional 900,000 shares
of our common stock to the underwriters of our initial public offering pursuant
to the exercise by the underwriters of the overallotment option granted to them
in connection with the offering. Such additional 900,000 shares were sold at
$14.00 per share for an aggregate price of $12.6 million. All shares were sold
by the Company; there were no selling stockholders. Deutsche Bank Alex. Brown,
J.P. Morgan & Co., U.S. Bancorp Piper Jaffray, and Epoch Partners were the
co-managers of the offering.

The
gross proceeds from the shares sold by us on October 20 and November 21, 2000
were $96.6 million. As of November 21, 2000 we incurred approximately
$8.1 million of expenses in connection with this offering, of which
approximately $6.8 million represented underwriter's discounts and commissions
and approximately $1.3 million representing offering expenses, including
legal fees, accounting fees and printing fees.

We
received approximately $88.5 million in proceeds, net of underwriting
discounts and commission and estimated offering expenses. The net proceeds will
be used for general corporate purposes, including working capital, expansion of
our research and development activities and to increase our manufacturing
capacity. We may also use a portion of the proceeds to acquire or invest in
complementary businesses or products or to obtain the right to use complementary
technologies. As of November 21, 2000 the entire net proceeds have been invested
in short term, interest bearing investment grade securities pending our usage
for the above mentioned purposes.

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On
October 2, 2000, we issued an aggregate of 428,572 shares of our common stock to
DMC Stratex Networks at a per share purchase price of $14.00 for gross proceeds
to us of $6.0 million. The sale and issuance of these securities without
registration under the Securities Act was in reliance on Section 4(2) contained
within the Securities Act.



The
Company has never declared or paid any cash dividends. We currently intend to
retain any future earnings to fund the development and growth of our business.
Therefore, we currently do not anticipate paying cash dividends in the
foreseeable future.

Item 3.   Defaults Upon
Senior Securities

None.

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

None

Item 5.   Other
Information

None.

Item 6.   Exhibits and
Reports on Form 8-K

(a)  Exhibit
10.1 Purchase Agreement No. 1201000 made and entered into by and between Nokia
Networks Oy and Endwave Corporation on November 7, 2000.*

(b)  Exhibit
27.1 Financial Data Schedule

(c)  Reports on
Form 8-K

The
Company filed no reports on Form 8-K during the three months ended
September 30, 2000.

______________



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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.

|                        |  |     | ENDWAVE
      CORPORATION                                                                                                                           
|----------------------- |  | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Date: November 30, 2000 |  | By: | /s/ Bruce Margetson                                                                                                                                 
|                        |  |     |                                                                                                                                                     
|                        |  |     | Bruce MargetsonSenior Vice
      President and, Chief Financial Officer(Duly Authorized Officer and
      PrincipalFinancial and Accounting
Officer)