================================================================================
                       Securities and Exchange Commission
                              Washington D.C. 20549

                                   Form 10-KSB
(Mark One)
  [  X  ]     ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934

                     For the Fiscal Year Ended May 31, 2004

                                       OR
  [     ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE EXCHANGE ACT OF 1934

                         Commission file number 0-12866
                                                -------
                                   PHAZAR CORP
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                     75-1907070
 (State or other jurisdiction of              (IRS Employer Identification No.)
  Incorporation or organization)

101 S.E. 25th Avenue, Mineral Wells, Texas 76067            (940) 325-3301
------------------------------------------------            --------------
    (Address of principal executive offices)         (Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Act:
                                                              None
Securities registered pursuant to Section 12(g) of the Act:

                               Title of each class
                               -------------------
                          Common Stock, $0.01 par value

Check  whether  the issuer has (i) filed all  reports  required by Section 13 or
15(d) of the  Exchange  ACT during the past 12 months,  and (ii) been subject to
such filing requirements for the past ninety (90) days. Yes [ X ] No [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements  incorporated by reference in Part III of the Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

The Company's net sales for Fiscal Year ended May 31, 2004 was $11,713,910.

As of July 12, 2004,  2,197,828  shares of Common Stock were outstanding and the
aggregate  market  value of the Common Stock (based on the latest price of known
transactions  on the Nasdaq  Smallcap  Market) held by  non-affiliates  (967,639
shares) was approximately $4,189,877.

DOCUMENTS INCORPORATED BY REFERENCE                         None

Transitional Small Business Disclosure Format (check one):  Yes [   ]  No [ X ]

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<PAGE>


                                     PART 1

Item 1.  Description of Business.

General

PHAZAR CORP  operates as a holding  company with Antenna  Products  Corporation,
Tumche Corp. (fka Phazar Aerocorp,  Inc.), Phazar Antenna Corp. and Thirco, Inc.
as its subsidiaries.  Antenna Products Corporation, and Phazar Antenna Corp. are
operating subsidiaries with Thirco, Inc. serving as an equipment leasing company
to PHAZAR CORP's  operating units.  PHAZAR CORP has no other business  activity.
PHAZAR CORP's address is 101 S.E. 25th Avenue,  Mineral Wells,  Texas 76067. The
telephone number is (940) 325-3301.

Product   information   is   available   from   the   Internet   web   page  at:
//www.antennaproducts.com and at: //www.phazar.com.

Antenna Products Corporation

Antenna  Products  Corporation  was  incorporated in Texas in 1984 to continue a
business  started in 1972 and operated as a closely held "C"  corporation  until
January 24, 1992.  Thereafter,  Antenna Products Corporation has operated,  as a
wholly owned Subsidiary of PHAZAR CORP. Antenna Products  Corporation's  address
is 101 S.E. 25th Avenue,  Mineral Wells,  Texas 76067.  The telephone  number is
(940) 325-3301.

Antenna  Products  Corporation  designs,  manufactures  and markets standard and
custom antennas, guyed and self supported towers, support structures,  masts and
communication accessories worldwide. Customers include the U.S. Government, both
military and civil agencies,  U.S.  Government prime  contractors and commercial
clients.  Examples of Antenna Products  Corporation's U.S.  Government  supplied
products include ground to air collinear  antennas,  instrument landing antennas
and  towers,  fixed  system  multi-port  antenna  arrays,  tactical  quick erect
antennas  and masts,  shipboard  antenna  tilting  devices,  transport  pallets,
surveillance  antennas,  antenna  rotators,  positioners and controls,  and high
power broadcast baluns.  Examples of the Company's  commercial  products include
panel,  sector,  omnidirectional  and closed loop  telecommunications  antennas,
automatic meter reading (AMR),  instrument  scientific medical (ISM),  cellular,
paging and yagi antennas, guyed towers and self supported towers.

The majority of Antenna  Products  Corporation's  revenues come from fixed-price
contracts,  secured through a bidding  process,  for particular,  custom ordered
antenna production systems that Antenna Products Corporation builds according to
the  specifications  of the customer.  Except for inventory of standard products
including small antennas,  accessories and some towers in the amount of $378,060
at May 31,  2004,  Antenna  Products  Corporation  does not build and  inventory
equipment  for future off the shelf  sales.  The sales  volume for a  particular
antenna or antenna system is, therefore, a function of the fixed price contracts
for build to order antennas or systems awarded to Antenna Products  Corporation.
However,  a general  product sales  breakdown for fiscal year ended May 31, 2004
and the fiscal year ended May 31, 2003,  as a percentage  of total sales are, as
follows:




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                                     For fiscal year          For fiscal year
                                    ended May 31, 2004       ended May 31, 2003
                                    ------------------       ------------------

Antenna Sales                               3%                      7%

Shipboard Equipment Sales                   1%                     19%

Instrument Landing System Sales             8%                     19%

Collinear Antenna Sales                     7%                     14%

Tower Sales                                 1%                      6%

Mast Sales                                  2%                      2%

Standard Product Sales                      2%                      5%

Spares and Accessories Sales               11%                     18%

Commercial Antenna Sales                    6%                     10%

BAE SYSTEMS ATI Sales                      59%                      0%

Antenna  Products  Corporation's  customer  base  is  primarily  government  and
government  prime  contractor  focused,  but this is slowly  changing as Antenna
Products  Corporation  continues to develop and market new commercial  products.
Antenna  Products  Corporation's  market  is  international  in  scope.  Antenna
Products Corporation  currently focuses on developing domestic markets and has a
limited  amount of foreign  sales.  The  specialized  need of  Antenna  Products
Corporation's  customers and the technology  required to meet those needs change
constantly.  Accordingly, Antenna Products Corporation stresses its engineering,
installation,   service  and  other  support   capabilities.   Antenna  Products
Corporation  uses its own sales and  engineering  staff to service its principal
markets. Some of Antenna Products Corporation's  contracts are large relative to
total annual sales volume and,  therefore,  the composition of the customer base
is different  year to year.  In 2004 the BAE SYSTEMS ATI was the single  largest
customer and accounted for 59% of the total sales  volume.  The U.S.  Government
was the second largest customer and accounted for 8% of total sales.  Orders for
equipment in some of these product categories are in backlog and, therefore, BAE
SYSTEMS ATI and the U.S.  Government  are expected to be major  clients again in
2005.

Antenna  Products  Corporation  is one of many suppliers of antennas and related
manufacturing  services to the  government  and  government  prime  contractors.
Antenna  Products  Corporation  competes  on  the  basis  of  cost  and  product
performance in a market with no dominant supplier.  Due to fixed-price contracts
and pre-defined contract  specifications  prevalent within this market,  Antenna
Products  Corporation  competes primarily on the basis of its ability to provide
state-of-the-art  solutions in the technologically  demanding  marketplace while
maintaining its competitive pricing.

Antenna  Products  Corporation,  including it  predecessors,  have been building
antennas and related  structures and systems for over 30 years.  We believe that
Antenna Products  Corporation  enjoys a reputation for building quality products


                                       3
<PAGE>
at a  competitive  price,  because we  continue to be asked to bid for new work.
Because  of  our  size  and  lack  of  significant  liquid  assets  we  are at a
competitive  disadvantage to larger companies that have greater  resources to be
able to bid a job at lower margins.  In terms of gross assets,  sales and number
of  employees,  Antenna  Products  Corporation  is a  relatively  small  company
compared to the companies with which we compete.

On the other hand,  our customers know us, know our personnel and can rely on us
to  build  the   antennas  or  towers  or  masts,   etc.   according   to  their
specifications.  We,  therefore,  compete  on the  basis of our  reputation  and
history of building quality products at reasonable prices.

As discussed above,  Antenna Products  Corporation is primarily a build to order
company and most manufacturing requirements are established on a contract basis.
For this reason, the majority of the inventory is work in process. Approximately
26% of total inventory,  $378,060 is currently  maintained in stock for delivery
to  customers.  Some raw  materials  are also  inventoried  to support  customer
delivery schedules.  Antenna Products  Corporation  performs work for the United
States Government  primarily under fixed-price prime contracts and subcontracts.
Under fixed-price  contracts,  Antenna Products Corporation realizes any benefit
or detriment occasioned by lower or higher costs of performance.

Antenna Products Corporation is subject to certain risks common to all companies
that derive a portion of their revenues from the United States Government. These
risks  include  rapid  changes in  technology,  changes in levels of  government
spending, and possible cost overruns.  Recognition of profits on major contracts
is based upon  estimates  of final  performance,  which may change as  contracts
progress.   Contract  prices  and  costs  incurred  are  subject  to  Government
Procurement  Regulations,  and costs may be questioned by the Government and are
subject to disallowance.  United States Government contracts contain a provision
that they may be terminated at any time for the  convenience of the  Government.
In such event,  the contractor is entitled to recover  allowable  costs plus any
profits  earned to the date of  termination.  Collections  are  generally set in
accordance  with  federal  acquisition  standards,   which  require  payment  in
accordance  with "Net 30" terms  after  acceptance  of goods.  Antenna  Products
Corporation is not directly  regulated by any governmental  agency in the United
States. Most of Antenna Products  Corporation's  customers,  and the antenna and
tower  industries  in  general,   are  subject  to  meeting  various  government
standards.    These   performance   standards   necessitate   Antenna   Products
Corporation's  ability  to  produce  antenna  designs,  which can be  updated to
conform to customer  requirements in a changing  regulatory  environment.  These
regulations have not adversely affected operations.

Antenna  Products  Corporation  does  not  depend  on  any  license,  patent  or
trademark,  other that its good name, to secure business. While Antenna Products
Corporation does hold certain patents, they are not material to its business.

While Antenna Products  Corporation  complies with all  environmental  laws, the
costs and effects of compliance are not material to its operations.

Antenna  Products  Corporation  plans  to  reinvest  from 2% to 5% of  sales  in
research and development  projects and bid and proposal  activities.  The mix of
expenditures between the two areas in any given year is a function of the demand
for new independently developed innovative systems and the level of requirements
solicited.  In 2004  Antenna  Products  Corporation  invested  2.1% of  sales in


                                       4
<PAGE>
independent  research  and  development  (R&D) and bid and  proposal  activities
(B&P).  The level of expenditures as a ratio to sales is expected to continue at
this  level in 2005.  The  level of  expenditures  for R&D and B&P as a ratio to
sales was 2.9% of sales in 2003. Antenna Products  Corporation does not consider
patents  to be  material  to its  operations  nor would the loss of any  patents
adversely affect operations.

Tumche Corp. (fka Phazar Aerocorp, Inc.)

On May 31, 2003 PHAZAR CORP sold the assets and business of Phazar Aerocorp Inc.
to Phaero  LLC, a new  corporation  that was formed by Gary  Havener,  principal
shareholder and President of PHAZAR CORP and Brian Perryman,  General Manager of
Phazar  Aerocorp Inc.  Phaero LLC  purchased the assets of Phazar  Aerocorp Inc.
including the name Phazar  Aerocorp and assumed the  liabilities,  including all
indebtedness   and  lease   obligations  of  Phazar  Aerocorp  Inc.  except  the
intercompany  debt.  Phaero LLC also assumed PHAZAR CORP's  subsidiary,  Antenna
Products  Corporation's  $800,000  indebtedness to Sinan Corp. as a condition of
the sale.

On June 16, 2003 the name of Phazar  Aerocorp  Inc.  was changed to Tumche Corp.
Tumche Corp is a wholly  owned  subsidiary  of PHAZAR  CORP.  It has no sales or
operations.

Phazar Antenna Corp.

Phazar Antenna Corp. is a wholly owned  Subsidiary of PHAZAR CORP. It was formed
as a Delaware  Corporation  and activated on June 1, 2000.  Phazar Antenna Corp.
operates as a marketing,  research and development  unit. Phazar Antenna Corp.'s
address is 101 S.E.  25th Avenue,  Mineral  Wells,  Texas 76067.  The  telephone
number is (940) 325-3301.

Phazar Antenna Corp.  provides a complete line of commercial  wireless fixed and
mobile  antennas for ISM (instrument  scientific  medical),  wireless  Internet,
wireless LAN, wireless local loop, fixed GPS, MMDS (fixed wireless) and embedded
Bluetooth market  applications.  This product line complements  Antenna Products
Corporations  existing  product  lines of  cellular,  PCS,  paging,  ISM and AMR
(automatic meter reading)  omni-directional and sector wireless antennas. Phazar
Antenna  Corp.  sales for the  twelve  months  ended May 31,  2004  amounted  to
approximately  3% of total  sales.  We expect that for fiscal year ended May 31,
2005  this  percentage  will be  approximately  3%.  The  Phazar  Antenna  Corp.
commercial   wireless   product  lines  are  manufactured  at  Antenna  Products
Corporation's plant in Mineral Wells, Texas.

Thirco, Inc.

Thirco,  Inc.  was formed on November 1, 1993 as a Delaware  company to purchase
and lease  equipment and facilities to the other operating units of PHAZAR CORP.
The primary lease  arrangements  are with Antenna Products  Corporation.  Thirco
will  occasionally  assist in  servicing  the  banking  needs of  PHAZAR  CORP's
operating units. Since all activity is internal to PHAZAR CORP and its operating
subsidiaries,  financial data is consolidated  with PHAZAR CORP. Thirco does not
employ  any full  time  employees  and  does not  intend  to  employ  any in the
foreseeable  future.  Thirco does not intend to engage in any  outside  business
transactions.



                                       5
<PAGE>
Seasonality

PHAZAR CORP's businesses are not dependent on seasonal factors.

Backlog

The backlog of orders at Antenna  Products  Corporation and Phazar Antenna Corp.
was $6.8  million at year-end.  This  compares to $8.2 million in backlog at the
end of fiscal year 2003. In June, the backlog was $5.4 million. Over 95% of this
backlog will be delivered in the 2005 fiscal year.

Raw Material Source and Supply

PHAZAR  CORP's  operating  subsidiaries'  principal  raw  materials  are  steel,
aluminum, other metal alloys, plastic and composite tubing, hardware, electrical
wire, wire rope, electronic components and  electro-mechanical  components.  The
materials  are  commonly  available  from  numerous  sources,   including  local
distributors in quantities sufficient to meet the needs of the subsidiaries. The
availability  and supply of raw materials is not  considered to be a problem for
PHAZAR CORP.

Employees

As of July 12,  2004  Antenna  Products  Corporation  and Phazar  Antenna  Corp.
combined  employed a total of eighty-five  employees,  eighty-one  full time and
four part time. Of the eighty-five,  eleven are employed in  administration  and
sales,   nine  in  engineering   and  technical   support,   and  sixty-five  in
manufacturing.  None of Antenna Products  Corporation and Phazar Antenna Corp.'s
employees are subject to collective bargaining agreements.

Thirco does not employ any full time employees and does not intend to employ any
in the foreseeable future.

Foreign Sales

Antenna Products  Corporation's sales in international  markets are primarily to
foreign  governments or prime  contractors to foreign  governments and, as such,
represent a small percentage of the overall Company annual volume.  The level of
profits  from the  commitment  of assets to this  portion of the  business is no
greater or no less than that of other market segments.  International  sales for
2004 and 2003 were 4.5% and 6.8%, respectively, of total sales.

Phazar Antenna Corp. has no significant sales to international customers.

Item 2.  Description of Property.

Antenna Products  Corporation  owns a ten-acre  industrial site located along US
Highway 180 in Mineral Wells,  Texas.  The facility  consists of a main building
containing  60,000 square feet of  manufacturing  area and 10,000 square feet of
administrative  and engineering  offices,  a second building  containing  20,000
square feet of manufacturing and shipping area; and a third building  containing
15,000 square feet utilized for receiving and material control. Three additional
auxiliary  buildings,  which total in excess of 13,350 square feet, are utilized
for chemical etching, painting and storage. The facilities are in good condition
and with the current compliment of machinery and equipment are suitable and more


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than adequate to meet production  requirements.  Dependent on the mix of product
types in process in any given time period,  the Company could  potentially  more
than double  output with  current and planned  plant,  property  and  equipment.
Antenna Products  Corporation carries a bank note on the manufacturing  facility
that is amortized over twenty years ending in the year 2011.

Phazar Antenna Corp. has no facilities. Phazar Antenna Corp. uses the facilities
of Antenna Products Corporation in Mineral Wells, Texas.

Thirco owns a fifty-acre  test site in Mineral Wells,  Texas.  The site includes
three  buildings with 28,000 square feet of space.  The space is currently being
leased to Antenna  Products  Corporation  for test activity with some storage of
inventory.  The two larger buildings, if needed, are suitable with rearrangement
and some conversion expense, for additional manufacturing utilization.

Item 3.  Legal Proceedings.

None required by this item.

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

No matters were submitted to a vote of security holders through the solicitation
of proxies or otherwise during the fourth quarter of fiscal year 2004.

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

The  information in this item should be read in conjunction  with the Management
Discussion and Analysis of Financial Condition and Results of Operations in Item
6, and the  consolidated  financial  statements and the related notes thereto in
Item 7.

Market Information For The Common Stock

PHAZAR CORP's common stock is traded on the Nasdaq Smallcap Market and is quoted
under the symbol "ANTP".

The table below  presents  the high and low prices for the last two fiscal years
and  reflects  inter-dealer  prices,   without  retail  mark-up,   mark-down  or
commission and may not represent actual transactions.

                                            BID
Quarter Ended                       High             Low

August 2002                         1.90             1.51
November 2002                       2.01             1.22
February 2003                       2.05             1.60
May 2003                            2.20             1.74

August 2003                         3.00             1.90
November 2003                       5.37             2.46
February 2004                       9.19             4.70
May 2004                            8.80             4.45



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Holders

At July 12,  2004,  there  were  approximately  622  holders of record of common
stock.

Dividends

PHAZAR CORP has never paid a regular  cash  dividend on common  stock and has no
plans to institute payment of regular dividends.

Recent Sales of Unregistered Securities

As partial  consideration  for  attending  the PHAZAR  CORP Board of  Directors'
meetings,  Gary W. Havener,  Clark D. Wraight,  James Miles, James Kenney and R.
Allen Wahl each  received  1,800 shares of PHAZAR CORP common  stock.  Also,  as
partial  consideration  for attending the PHAZAR CORP audit committee  meetings,
James  Miles,  James  Kenny and R. Allen Wahl each  received an  additional  600
shares of PHAZAR CORP common stock.  Each Director agreed to hold the shares for
investment and not for further distribution.  The certificates  representing the
shares  bear  a  legend   restricting   transfer  without  compliance  with  the
registration  requirements of the Federal  Securities Act of 1933 or in reliance
upon an applicable  exemption  therefrom.  PHAZAR CORP relied on section 4(2) of
the Securities Act of 1933 as its exemption from registration.

The  following  table  presents  selected  financial  data of PHAZAR CORP.  This
historical  data  should  be read in  conjunction  with  consolidated  financial
Statements and the related notes thereto in Item 7.

                           FISCAL YEAR ENDING MAY 31
                           -------------------------

                                        2004                   2003
                                  -----------------     ------------------
Net Sales                           $ 11,713,910           $  7,414,397
Income (loss) from continuing
  Operations                        $  1,422,113           $    251,038

Income per share from
  continuing operations             $        .65           $       0.12

Total Assets                        $  5,718,331           $  4,718,754

Long Term Debt                      $    568,114           $    631,719

Dividends                           $       0.00           $       0.00

Item 6.  Management's Discussion and Analysis or Plan of Operation.

PHAZAR CORP's continuing operation is that of its subsidiaries, Antenna Products
Corporation,  Phazar Antenna Corp.,  Tumche Corp. and Thirco, Inc. As previously
discussed in Item 1, for the purpose of this  discussion,  all results of Phazar
Antenna Corp. are included with the results of Antenna Products Corporation. The
management  discussion  presented  in this item  relates  to the  operations  of
Subsidiary units and the associated consolidated financials as presented in Item
7.


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Overview

PHAZAR CORP  operates as a holding  company with Antenna  Products  Corporation,
Phazar  Antenna  Corp.,  Tumche  Corp.  and  Thirco,  Inc.  as its wholly  owned
subsidiaries.   Antenna  Products  Corporation  and  Phazar  Antenna  Corp.  are
operating subsidiaries with Thirco, Inc. serving as an equipment leasing company
to PHAZAR  CORP's  operating  units.  Tumche Corp.  has no sales or  operations.
Antenna Products Corporation designs,  manufactures and markets antenna systems,
towers and communication  accessories  worldwide.  The United States government,
military  and  civil  agencies  and  prime   contractors  are  Antenna  Products
Corporation's  principal  customers.  Phazar  Antenna Corp.  designs and markets
fixed and mobile  antennas for  commercial  wireless  applications  that include
cellular,  PCS,  ISM  (instrument  scientific  medical),  AMR  (automatic  meter
reading), wireless internet, and wireless local area network.

PHAZAR CORP is primarily a build to order company.  As such,  most United States
government and  commercial  orders are negotiated  firm  fixed-price  contracts.
PHAZAR CORP's sales to major  customers at May 31, 2004 as a percentage of total
sales were BAE SYSTEMS ATI 60 percent,  United  States  Government 8 percent and
Thales ATM, Inc. (a prime contractor to the Federal Aviation  Administration for
Instrument Landing Systems) 4 percent.

PHAZAR  CORP sold the assets and  business  of Phazar  Aerocorp  Inc. on May 31,
2003.  Phazar  Aerocorp Inc. was an 80 percent  owned  subsidiary of PHAZAR CORP
that operated in the aircraft interior refurbishing market. Phaero LLC purchased
the assets  except for  deferred  tax asset for net  operating  losses of Phazar
Aerocorp Inc.  including the name Phazar  Aerocorp and assumed the  liabilities,
including all indebtedness and lease  obligations of Phazar Aerocorp Inc. except
intercompany  debt.  Phaero LLC also assumed PHAZAR CORP'S  subsidiary,  Antenna
Products  Corporation's  $800,000  indebtedness to Sinan Corp. as a condition of
the sale.  The result of the sale of the assets and business of Phazar  Aerocorp
Inc. is identified in the consolidated financials and related notes in Item 7 as
discontinued operations of the aircraft interiors segment.

Critical Accounting Policies

The preparation of PHAZAR CORP's consolidated financial statements in accordance
with accounting principles and practices generally accepted in the United States
of America  requires PHAZAR CORP to make estimates and assumptions  that affect:
the reported  amounts of assets and  liabilities  and  disclosure  of contingent
assets and liabilities at the date of the financial statements; and the reported
amounts of revenues and expenses  during the reporting  periods.  PHAZAR CORP is
required to make  judgments and  estimates  about the effect of matters that are
inherently uncertain.  Actual results could differ from PHAZAR CORP's estimates.
The most  significant  areas involving PHAZAR CORP's judgments and estimates are
described below.

Inventory Valuation

Inventory  is  stated  at the  lower of cost or  market,  net of any  applicable
progress  payments,  with cost being determined on a first-in,  first-out basis.
Provisions are made to reduce excess or obsolete  inventory to its estimated net
realizable  value.  The process for  evaluating the value of excess and obsolete
inventory often requires PHAZAR CORP to make subjective  judgments and estimates
concerning  future sales levels,  quantities  and prices at which such inventory


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will be able to be sold in the  normal  course  of  business.  Accelerating  the
disposal   process  or  incorrect   estimates  of  future  sales  potential  may
necessitate future adjustments to these provisions.

Accounts Receivable Valuation

PHAZAR CORP  maintains an allowance for doubtful  accounts for estimated  losses
resulting  from the  inability  of  PHAZAR  CORP's  customers  to make  required
payments.  If the  financial  condition  of  PHAZAR  CORP's  customers  were  to
deteriorate  resulting  in an  impairment  of their  ability  to make  payments,
additional allowances may be required.

Revenue from short-term contracts calling for delivery of products is recognized
as the product is shipped. Revenue and costs under certain long-term fixed price
contracts  with the U.S.  Government  are  recognized  on the units of  delivery
method.  This method  recognizes  as revenue the contract  price of units of the
product  delivered  during each period and the costs  allocable to the delivered
units as the cost of earned revenue.  Costs  allocable to undelivered  units are
reported in the  balance  sheet as  inventory.  Amounts in excess of agreed upon
contract price for customer directed  changes,  constructive  changes,  customer
delays or other causes of additional  contract  costs are recognized in contract
value if it is probable  that a claim for such amounts will result in additional
revenue and the  amounts  can be  reasonable  estimated.  Revisions  in cost and
profit  estimates are  reflected in the period in which the facts  requiring the
revision  become known and are estimable.  Losses on contracts are recorded when
identified.

Income Taxes

PHAZAR CORP  accounts  for income  taxes  pursuant  to  Statement  of  Financial
Accounting  Standards  No. 109,  "Accounting  for Income Taxes" (SFAS 109) which
utilizes the asset and liability method of computing  deferred income taxes. The
objective of the asset and liability method is to establish  deferred tax assets
and liabilities for the temporary  differences  between the financial  reporting
basis and the tax basis of PHAZAR CORP's assets and  liabilities  at enacted tax
rates  expected to be in effect when such amounts are  realized or settled.  The
current  and  deferred  tax   provision  is  allocated   among  members  of  the
consolidated group of the separate income tax return basis.

Results of Operations

Year ended May 31, 2004 ("2004") Compared with Year Ended May 31, 2003 ("2003")

PHAZAR CORP's  consolidated sales from operations were $11,713,910 in 2004. This
is  $4,299,513  or 58% more than the  $7,414,397  in sales in 2003.  PHAZAR CORP
recorded a net profit of  $1,422,113  in 2004 compared to a net loss of $132,169
in 2003.

PHAZAR CORP's sales and income improved in 2004 due to the revenue of $5,408,816
on the $6.2  million  BAE  SYSTEMS ATI  production  contract  and the revenue of
$477,116  on the $604  thousand  BAE  SYSTEMS  ATI pack and ship  contract.  The
scheduled  completion  date for  both  contracts  is July  31,  2004 and the two
contracts are on schedule.




                                       10
<PAGE>
On April 23, 2004 Antenna Products  Corporation signed a third contract with BAE
SYSTEMS ATI for $5,393,247 to install the antennas,  antenna support  structures
and ground screens in Alaska.  PHAZAR CORP  recognized  revenue of $1,059,639 in
2004 on the firm fixed-price  installation  contract.  The scheduled  completion
date for the  installation  contract is November 4, 2004 and the  contract is on
schedule.  The BAE SYSTEMS ATI contracts include  milestone  payments during the
lives of the three contracts as shown below:


              Production Contract                 Pack and Ship Contract
   Milestone Date      Schedule Amount     Milestone Date     Schedule Amount
   April 18, 2003      $       500,000     January 9, 2004    $       123,626
   April 30, 2003      $     1,500,000     February 27, 2004  $        96,000
   September 30, 2003  $     1,000,000     March 31, 2004     $        96,000
   December 30, 2003   $     1,000,000     April 30, 2004     $        96,000
   April 30, 2004      $       500,000     May 31, 2004       $        96,000
   June 30, 2004       $       500,000     July 31, 2004      $        96,000
   July 31, 2004       $       227,008

            Installation Contract
   Milestone Date      Schedule Amount
   April 23, 004       $     1,350,000
   May 4, 2004         $       760,000
   June 4, 2004        $       760,000
   July 4, 2004        $       760,000
   August 4, 2004      $       760,000
   September 4, 2004   $       760,000
   November 4, 2004    $       243,247

When a milestone payment is received,  it is recorded on the balance sheet under
current assets as cash and under current  liabilities as deferred  revenue:  BAE
SYSTEMS ATI. PHAZAR CORP totals material costs,  labor cost,  overhead costs and
profit on the contract work orders monthly and recognizes this amount as revenue
at the end of the month.  The amount  recognized  as revenue on the contracts is
applied against the deferred revenue,  reducing the deferred revenue balance. As
of May 31, 2004 a total of  approximately  $6.9 million has been  recognized  as
revenue on the three  contracts in fiscal year 2004. The three  contracts are on
schedule and it is anticipated  that the balance of the three  contracts  value,
approximately  $5.2  million,  will be  recognized  as  revenue in the first six
months of fiscal year 2005.

United  States  Government  contracts  contain  a  provision  that  they  may be
terminated at any time for the convenience of the Government.  This provision is
included in the three BAE SYSTEMS ATI contracts.  In such event,  the contractor
is entitled to recover  allowable  costs plus any profits  earned to the date of
termination.  The possibility that Government priorities could change, causing a
delay or cancellation of these contracts and any potential follow-on work, makes
it impossible to accurately  predict whether  revenues will increase or decrease
in the upcoming year.

Orders  decreased in both military and commercial  markets from a total of $12.5
million in 2003 to $7.4 million in 2004.  This resulted in an ending  backlog of
firm  orders at May 31,  2004 of $6.8  million,  down  from the  prior  year-end
backlog of $8.4 million.  The year-end backlog includes the balance on the three
BAE SYSTEMS ATI contracts of $5.2 million.


                                       11
<PAGE>
Cost of sales and contracts for the  continuing  operations and gross profit for
fiscal year 2004 were $8.23  million and $3.48  million,  respectively.  For the
same period in 2003,  cost of sales and contracts for the continuing  operations
and gross profit were $4.59 million and $2.83 million,  respectively.  The gross
profit  margin  for the  continuing  operations  for  fiscal  year  2004 was 30%
compared  to 38% in 2003.  The  decrease  in gross  margin  is due to the mix of
products  sold  in  2004  and  is  expected  to  improve  in  2005.   Sales  and
Administration  expenses were $1.31 million in 2004 compared to $2.38 million in
2003. When expressed as a ratio to sales, sales and administration expenses were
11% of sales in 2004 compared to 32% in 2003. Sales and administration  expenses
decreased  when  charges to overhead  accounts  decreased  and labor  charges to
contract work orders  increased.  This  resulted in operating  margins of 19% in
2004  compared to 6% in 2003.  Bid and  proposal  activities  and  discretionary
product  development  spending totaled $240,314,  or 2.1% of sales in 2004. This
compares  to $215,338 or 2.9% of sales in 2003.  The  increase in  discretionary
product development was required to develop new wireless antennas for commercial
applications.  Interest  expense for the  continuing  operations  decreased from
$101,866 in 2003 to $51,716 in 2004 due to the  reduction in  indebtedness  that
occurred  when PHAZAR CORP sold the assets and business of Phazar  Aerocorp Inc.
on May 31, 2003 and the  reduction in notes  payable in 2004 from  $1,020,000 to
$0.

Income from  continuing  operations  before income taxes was  $2,153,377 in 2004
compared to a pre-tax income of $389,837 in 2003.

The result of the sale of the assets and business of Phazar Aerocorp Inc. on May
31, 2003 is identified in the consolidated financials as discontinued operations
of  the  aircraft  interiors  segment.  The  net  loss  from  operations  of the
discontinued aircraft interiors segment in 2003 was $705,882.  The net income as
a result of the sale of the aircraft interiors segment in 2003 was $322,675. See
the related Note 2 of the consolidated financial statements in Item 7.

Product Warranties

PHAZAR CORP's  management  estimates  accrued warranty expense based on warranty
work received but not performed and on analysis of historical  trends  including
actual expense as a percent of sales.

Changes  in  accrued  warranty  liability  for the years  ended  May 31,  are as
follows:

                                               2004          2003
                                            ---------     ---------
Beginning balance                           $ 30,000       $ 30,000
Cost incurred for rework                     (37,190)       (31,092)
Accrual for current year estimate            211,000         30,000
Change in accrued estimate                     7,190          1,092
                                            --------       --------
Ending balance                              $211,000       $ 30,000

Liquidity and Capital Resources

Funds generated from operations are the major internal  sources of liquidity and
are  supplemented  by funds  derived  from  capital  markets,  principally  bank
facilities.  PHAZAR CORP has a $1.0 million revolving demand line of credit with


                                       12
<PAGE>
a bank and an unused $3.0 million  letter of credit with a bank. The credit line
is regulated  under a borrowing  base  formula  using  inventories  and accounts
receivable as  collateral.  The interest rate is  established  as one percentage
point over Wall Street prime and is subject to a loan agreement with restrictive
covenants.  The most  restrictive  financial  covenant  requires  PHAZAR CORP to
maintain $2.0 million in tangible net worth and Antenna Products  Corporation to
maintain  $1.0  million of working  capital.  At May 31,  2004 PHAZAR CORP had a
tangible net worth of $4.0 million and Antenna  Products had working  capital of
$2.8 million.  As of May 31, 2004 Antenna  Products  Corporation had drawn $0 of
the $1.0  million  line of  credit  with  $1.0  million  of the  borrowing  base
available  and unused.  The  revolving  credit line  agreement  is  renewable in
September  2004. The BAE SYSTEMS ATI contract  milestone  payments  schedule was
designed to provide Antenna  Products  Corporation with the cash to complete the
contract  without  drawing on the Company's line of credit.  As of May 31, 2004,
Antenna  Products  Corporation has received $5.8 million in milestone  payments.
Milestone payments received in advance of the completion of the related phase of
the BAE SYSTEMS ATI  contract are  recorded as deferred  revenue when  received.
With customer  funding in place on this contract,  PHAZAR CORP believes that its
cash  and the  credit  available  at May  31,  2004 is  sufficient  to fund  the
Company's operations for at least 12 months.

Management  of the operating  subsidiaries  evaluate the  facilities  and review
equipment  requirements for existing and projected contracts on a regular basis.
An annual  capital plan is generated by management and submitted to the Board of
Directors for review and approval.  In fiscal year 2004 capital expenditures for
new and  replacement  equipment  totaled  approximately  $222,000.  The  Company
anticipates  that the existing  facilities  and equipment are adequate to handle
the projected business in fiscal year 2005 and intends to limit the 2005 capital
program to less than $250,000 for improvements and new equipment.

At May 31, 2004 PHAZAR CORP had cash and cash equivalents of $717,865.  Deferred
revenue recorded under the BAE SYSTEMS ATI contracts at May 31, 2004 is $0.

The increase in accounts  receivable to $1,803,444 at May 31, 2004 from $984,556
at May 31, 2003  reflects the increase in sales  activity on the BAE SYSTEMS ATI
contracts  and a decrease in sales in other  products.  The backlog of orders of
other  products was $1.6 million at May 31, 2004 compared to $2.1 million at May
31, 2003. Based on the number of inquiries received in the fourth quarter, sales
of other products including  instrument landing systems and commercial  wireless
antennas are  expected to remain down in the first  quarter of fiscal year 2005.
The  increase  in accounts  payable and accrued  expenses to $676,995 at May 31,
2004 from $453,926 at May 31, 2003  reflects the material  purchased for the BAE
SYSTEMS ATI contracts and normal  increases due to the increased sales volume in
2004. Inventories decreased to $1,455,450 at May 31, 2004 from $1,690,716 at May
31, 2004 as a result of PHAZAR CORP's continuing effort to reduce inventories.

Cash provided by the continuing  operating  activities in the year ended May 31,
2004 was  $1,822,851  compared to cash  provided  by  continuing  operations  of
$213,164 for the same period in 2003. PHAZAR CORP sold Phazar Aerocorp Inc. (the
aircraft  interiors  segment)  on May 31,  2003.  This  resulted in the net cash
provided by  discontinued  operations in the year ended May 31, 2003 of $20,022.
$1,422,113 of the cash provided by  continuing  operating  activities at May 31,
2004  represented  PHAZAR CORP's net income compared to $251,038 net income from
continuing operating activities at May 31, 2003.



                                       13
<PAGE>
Cash used in  investing  activities  in the year ended May 31, 2004 was $222,369
compared to cash used in investing  activities of $59,498 for the same period in
2003. In the years ended May 31, 2004 and 2003, these amounts related  primarily
to capital expenditures for production machinery and test equipment.

Cash used in financing  activities in the year ended May 31, 2004 was $1,073,605
compared to cash used in financing activities of $184,506 for the same period in
2003.  The  financing  activities  for the year  ended  May 31,  2004  consisted
primarily  of  payments on the  revolving  demand line of credit with a bank and
principal  payments on long term debt.  The  financing  activities  for the year
ended May 31, 2003 also consisted  primarily of payments on the revolving demand
line of credit with a bank and principal payments on long term debt..
Antenna  Products  Corporation  has a  long-term  bank  note  for  $1.2  million
collateralized  by  the  Antenna  Products  Corporation  plant,   property,  and
equipment.  The balance as of May 31, 2004 is  approximately  $632 thousand with
payments amortized over 20 years ending in 2011. The interest is variable at one
half point over prime interest rate with the note supported by an FmHA guarantee
under the federal  guidelines of a rural  business  industry  loan.  The note is
guaranteed by a principal shareholder.

Item 7.  Financial Statements.

PHAZAR CORP consolidated  financial statements for the fiscal year ended May 31,
2004.


                                 C O N T E N T S


                                                                        Page

CONSOLIDATED FINANCIAL STATEMENTS

     Consolidated Balance Sheets.........................................15

     Consolidated Statements of Operations...............................17

     Consolidated Statements of Shareholders' Equity.....................18

     Consolidated Statements of Cash Flows...............................19

     Notes to Consolidated Financial Statements..........................21















                                       14
<PAGE>
                          PHAZAR CORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              MAY 31, 2004 AND 2003

                                     ASSETS

                                            2004         2003
                                       ------------- -------------
CURRENT ASSETS
  Cash and cash equivalents            $    717,865  $    190,988
  Accounts receivable:
     Trade, net of allowance for
      doubtful accounts of $7,021
      in 2004 and 2003                    1,673,065       808,708
     United States Government               130,379       175,848
Inventories                               1,455,450     1,690,716
Prepaid expenses and other assets            63,069        68,314
Income taxes receivable                           -         2,000
Deferred income taxes                       115,138        71,207
                                       ------------  ------------
  Total current assets                    4,154,966     3,007,781

Property and equipment, net               1,475,316     1,509,782

Identifiable Intangible Assets               88,049       185,030

Deferred income taxes                             -        16,161
                                       ------------  ------------
TOTAL ASSETS                           $  5,718,331  $  4,718,754
                                       ------------  ------------





















The Notes to Consolidated Financial Statements
are an integral part of these statements.




                                       15
<PAGE>
                          PHAZAR CORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              MAY 31, 2004 AND 2003

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                            2004         2003
                                       ------------- -------------
CURRENT LIABILITIES
  Notes payable                        $          -  $  1,020,000
  Current portion of long-term debt          63,804        63,804
  Accounts payable                           64,285        67,402
  Accrued expenses                          612,710       386,524
  Income tax payable                        310,751         6,314
                                       ------------  ------------
Total current liabilities                 1,051,550     1,544,044
                                       ------------  ------------
Long-term debt                              568,114       631,719
Deferred income taxes                        69,914             -
                                       ------------  ------------
Total long-term liabilities                 638,028       631,719
                                       ------------  ------------
   Total liabilities                      1,689,578     2,175,763
                                       ------------  ------------
COMMITMENTS AND CONTINGENCIES                     -             -

SHAREHOLDER'S EQUITY

Preferred stock, $1 par, 2,000,000
  shares authorized, none issued
  or outstanding, attributes to be
  determined when issued                          -             -
Common stock, $0.01 par, 6,000,000
  shares authorized 2,197,828 and
  2,182,028 issued and outstanding           21,979        21,820
  Additional paid in capital              2,829,029     2,765,539
  Retained earnings (deficit)             1,177,745      (244,368)
                                       ------------  ------------
   Total shareholders' equity             4,028,753     2,542,991
                                       ------------  ------------
TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY                $  5,718,331  $  4,718,754
                                       ============  ============









The Notes to Consolidated Financial Statements
are an integral part of these statements.




                                       16
<PAGE>
                          PHAZAR CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        YEARS ENDED MAY 31, 2004 AND 2003


                                                   2004               2003
                                             --------------      --------------
Sales and contract revenues                  $  11,713,910       $   7,414,397
Cost of sales and contracts                      8,232,995           4,585,467
                                             -------------       -------------
   Gross Profit                                  3,480,915           2,828,930

Sales and administration expenses                1,306,380           2,381,850
                                             -------------       -------------
   Operating Profit                              2,174,535             447.080

Other income (expense)
     Interest expense                              (51,716)           (101,866)
     Interest income                                   700                 499
     Other Income                                   29,858              44,124
                                             -------------       -------------
Total Other Expense                                (21,158)            (57,243)
                                             -------------       -------------
Income from operations before
     income taxes                                2,153,377             389,837

Income tax provision                               731,264             138,799
                                             -------------       -------------
      Income from continuing operations          1,422,113             251,038

Discontinued operation
      Loss from operations of discontinued
        Aircraft Interiors segment, net of
        $363,636 tax benefit                             -            (705,882)
      Gain on disposal of Aircraft Interiors
        segment, net of $100,212 on tax
        provision                                        -             322,675
                                             -------------       -------------
Net income (loss)                                1,422,113            (132,169)
                                             =============       =============
Basic earnings (loss) per common share

       Continuing operations                          0.65                0.12
                                             -------------       -------------
       Discontinued operations                           -               (0.18)
                                             -------------       -------------
        Net earnings per common share        $        0.65       $       (0.06)
                                             =============       =============
Diluted earnings (loss) per common share     $        0.63       $       (0.06)
                                             =============       =============



The Notes to Consolidated Financial Statements
are an integral part of these statements.


                                       17
<PAGE>
                          PHAZAR CORP AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        YEARS ENDED MAY 31, 2004 AND 2003

                    Common Stock
                    ------------   Additional
                  Number            Paid In    Retained
                of Shares  Amount   Capital    Earnings      Total
                --------- -------- ---------- ----------- ------------
BALANCE,
MAY 31, 2002    2,174,828 $ 21,748 $2,753,136 $ (112,199) $ 2,662,685

Stock issued
to Directors        7,200       72     12,403          -       12,475

Net loss                -        -          -   (132,169)    (132,169)
                --------- -------- ---------- ----------  -----------
BALANCE,
MAY 31, 2003    2,182,028   21,820  2,765,539   (244,368)   2,542,991

Stock issued
to Directors       10,800      109     53,540          -       53,649

Stock options
exercised           5,000       50      9,950          -       10,000

Net income              -        -          -  1,422,113    1,422,113
                --------- -------- ---------- ----------  -----------
BALANCE,
MAY 31, 2004    2,197,828 $ 21,979 $2,829,029 $1,177,745  $ 4,028,753
                ========= ======== ========== ==========  ===========




















The Notes to Consolidated Financial Statements
are an integral part of these statements.




                                       18
<PAGE>
                          PHAZAR CORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        YEARS ENDED MAY 31, 2004 AND 2003

                                                          2004         2003
                                                     ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                  $  1,422,113  $   (132,169)

  Adjustments to reconcile net income (loss)
   to net cash provided by operating activities

   Depreciation                                           255,615       281,841
   Amortization                                            96,981        96,226
   Stock based compensation                                53,649        12,475
   Loss on disposal of fixed assets                         1,220         5,392
   Gain on disposal of subsidiary net assets                    -      (422,887)
   Deferred federal income tax                             42,144      (130,940)
   Changes in assets and liabilities:
   Accounts receivable                                   (818,888)     (211,069)
   Inventory                                              235,266       326,004
   Prepaid expenses                                         5,245        15,221
   Income taxes receivable                                  2,000       477,282
   Accounts payable                                        (3,116)     (172,266)
   Accrued expenses                                       226,186        61,740
   Income taxes payable                                   304,436         6,314
                                                     ------------  ------------
     Net cash provided by continuing operations         1,822,851       213,164

     Net cash provided by discontinued operations               -        20,022
                                                     ------------  ------------
     Net cash provided by operating activities          1,822,851       233,186
                                                     ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from disposal of fixed assets                        -         2,500
  Purchase of property and equipment                     (222,369)      (61,998)
                                                     ------------  ------------
     Net cash used in investing activities               (222,369)      (59,498)














The Notes to Consolidated Financial Statements
are an integral part of these statements.



                                       19
<PAGE>
                          PHAZAR CORP AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                        YEARS ENDED MAY 31, 2004 AND 2003

                                                          2004         2003
                                                     ------------- -------------
CASH FLOWS FROM FINANCING ACTIVIITES
  Net payments under bank lines of credit            $ (1,020,000) $   (125,000)
  Principal payments on long-term debt                    (63,605)      (59,506)
  Proceeds from exercise of stock options                  10,000             -
                                                     ------------  ------------
     Net cash used in financing activities             (1,073,605)     (184,506)

     Net increase (decrease) in cash and cash
         equivalents                                      526,877       (10,818)

CASH AND CASH EQUIVALENTS, beginning of year              190,988  $    201,806
                                                     ------------  ------------

CASH AND CASH EQUIVALENTS, end of year                    717,865  $    190,988
                                                     ============  ============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
  Cash paid during the period for:
    Interest (none capitalized)                      $     51,716  $    220,062
                                                     ============  ============
    Income taxes paid                                $    370,550  $          -
                                                     ============  ============
SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES

  Stock based compensation                           $     63,649  $     12,475
                                                     ============  ============
















The Notes to Consolidated Financial Statements
are an integral part of these statements.






                                       20
<PAGE>
NOTE 1.   BUSINESS AND NATURE OF OPERATION

     PHAZAR  CORP   operates  as  a  holding   company  with  Antenna   Products
     Corporation, Phazar Antenna Corp., Tumche Corp. (fka Phazar Aerocorp, Inc.)
     and  Thirco,  Inc.  as its  wholly  owned  subsidiaries.  Antenna  Products
     Corporation  is an operating  Subsidiary  that  designs,  manufactures  and
     markets antenna systems,  towers, and communication  accessories worldwide.
     The  United  States  government,  military  and civil  agencies,  and prime
     contractors represent Antenna Products  Corporation's  principal customers.
     Phazar Antenna Corp. is a separate legal entity that currently  operates as
     a small  division  of Antenna  Products  Corporation.  Thirco  serves as an
     equipment  leasing company to Antenna Products  Corporation.  The Company's
     operations are performed in Texas for customers throughout the country.

     Following is a schedule of the  Company's  sales to major  customers at May
     31, as a percentage of total sales:

                                                           2004         2003
                                                           ----         ----
        BAE SYSTEMS ATI                                     59%           1%
        Federal Government                                   8%          21%
        Thales ATM, Inc. (fka AIRSYS ATM, Inc.)              4%          16%
        Titan                                                0%          15%
        Raytheon                                             3%           2%

     At May 31, 2004 and 2003, trade  receivables from four customers  comprised
     approximately 84% and 51%, respectively, of the trade receivable balance at
     those dates.

NOTE 2.   DISCONTINUED OPERATIONS

     On January  27,  2000 the  Company's  subsidiary,  Phazar  Aerocorp,  Inc.,
     purchased the assets and the  operations of the  Upholstery  Shop Inc.! for
     cash  of  $2,000,000.  Phazar  Aerocorp  Inc.  operated  as  an  80%  owned
     subsidiary  of PHAZAR CORP in the  aircraft  interior  refurbishing  market
     through May 31, 2003.

     The Company sold the assets and business of Phazar  Aerocorp Inc. to Phaero
     LLC,  a  new  corporation  that  was  formed  by  Gary  Havener,  principal
     shareholder  and  President  of  PHAZAR  CORP and Brian  Perryman,  General
     Manager of Phazar  Aerocorp Inc. Phaero LLC purchased the assets except for
     deferred  tax  asset for net  operating  losses  of  Phazar  Aerocorp  Inc.
     including the name Phazar Aerocorp and assumed the  liabilities,  including
     all indebtedness  and lease  obligations of Phazar Aerocorp Inc. except the
     intercompany  debt.  Phaero  LLC also  assumed  PHAZAR  CORP's  subsidiary,
     Antenna Products  Corporation's  $800,000  indebtedness to Sinan corp. as a
     condition  of the  sale.  The sale was  effective  May 31,  2003 and  total
     consideration received was $2,488,119.  Condensed balance sheets and income
     statements for the discontinued operations are as follows:








                                       21
<PAGE>
NOTE 2.   DISCONTINUED OPERATIONS - continued

                                                     2004            2003
                                                -------------   -------------
       Current assets                           $          0    $    357,253
       Deferred income taxes                               0          75,992
       Property and equipment, net                         0         326,602
       Identifiable intangible assets                      0         839,667
       Intangible assets (goodwill)                        0         461,969
                                                ------------    ------------
           Total Assets                         $          0    $  2,061,483
                                                ============    ============
       Current liabilities                                 0         698,900
       Long-term debt                                      0         989,219
       Note payable to shareholder                         0         800,000
       Deferred taxes on non-current                       0          (3,749)
       Shareholders' equity                                0        (422,887)
                                                ------------    ------------
       Total liabilities and shareholder's
             equity                             $          0    $  2,061,483
                                                ============    ============

                                                     2004            2003
                                                -------------   -------------
       Sales and contract revenues              $          0    $  3,159,731
       Cost of sales and contract revenues                 0       3,310,261
       Sales and administrative expenses                   0         771,763
       Other income (expense)                              0        (147,225)
                                                ------------    ------------
       Income (loss) before taxes                          0      (1,069,518)
                                                ------------    ------------
       Income tax benefit                                  0         363,636
       Minority interest                                   0               -

       Net (loss)                               $          0    $   (705,882)
                                                ============    ============

     As a result of this sale, the Company operates in one business segment.

NOTE 3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The consolidated  financial  statements include the accounts of the Company
     and  its   subsidiaries.   All   significant   intercompany   balances  and
     transactions are eliminated in consolidation.

  Sales and Contract Revenues and Related Costs - Antennas

     Antenna Products  Corporation  manufactures and markets standard and custom
     antennas,  guyed and self-supported towers,  support structures,  masts and
     communication accessories worldwide. Customers include the U.S. Government,
     military  and  civil  agencies,   U.S.  Government  prime  contractors  and
     commercial  clients.   Examples  of  Antenna  Products  Corporation's  U.S.
     Government  supplied  products  include  ground to air collinear  antennas,
     instrument  landing antennas and towers,  fixed system  multi-port  antenna

                                       22
<PAGE>
NOTE 3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

     arrays,  tactical quick erect antennas and masts, shipboard antenna tilting
     devices,  transport  pallets,   surveillance  antennas,  antenna  rotators,
     positioners and controls, and high power broadcast baluns.  Examples of the
     Company's commercial products (Phazar Antenna Corp.) include panel, sector,
     omnidirectional  and closed  loop PCS  antennas;  automatic  meter  reading
     (AMR), cellular,  paging and yagi antennas, guyed towers and self supported
     towers.

     Antenna  Products  Corporation  is primarily a build to order  company.  As
     such,  most  orders  are  negotiated  firm  fixed-price   contracts.   Most
     commercial  contracts are single order and single delivery firm fixed-price
     contracts.  Some  government  contracts  are  multi-year  performance  with
     established option dates with a predetermined  escalated price for delivery
     in that  outyear.  These types of  contracts  can be valid from two to five
     years.  Other types of government  contracts  are called  supply  contracts
     where the  government  buys a  particular  product  and has  estimated  the
     quantity required over an expected period. Antenna Products Corporation has
     contracts with major prime  contractors  who negotiate  contracts  based on
     large  quantities  with set escalation  rates for future  prices.  The U.S.
     Government  is  attempting  to  procure  more and more  products  that have
     commercial  equivalents  to military  standards.  These  purchases  are for
     off-the-shelf  products  and,  therefore,   use  credit  cards  and  accept
     commercial  terms  and  shipping  methods.   Antenna  Products  Corporation
     recognizes  an  order or  resultant  sale  when  official  notification  is
     received that an option is being exercised and the order is shipped.

     Revenue  from  short-term  contracts  calling  for  delivery of products is
     recognized  as the  product is shipped.  Revenue  and costs  under  certain
     long-term  fixed price  contracts  with  governments  are recognized on the
     units of delivery  method.  This method  recognizes as revenue the contract
     price of units of the  product  delivered  during each period and the costs
     allocable  to the  delivered  units as the cost of  earned  revenue.  Costs
     allocable  to  undelivered  units  are  reported  in the  balance  sheet as
     inventory.  Amounts in excess of agreed upon  contract  price for  customer
     directed changes,  constructive changes, customer delays or other causes of
     additional  contract  costs  are  recognized  in  contract  value  if it is
     probable  that a claim for such amounts will result in  additional  revenue
     and the amounts can be reasonably  estimated.  Revisions in cost and profit
     estimates  are  reflected  in the period in which the facts  requiring  the
     revision  become known and are estimable.  Losses on contracts are recorded
     when identified.

  Inventories

     Inventories are stated at the lower of first-in,  first-out cost or market,
     net of any applicable progress payments.

  Property and Equipment

     Property  and  equipment  are  recorded  at  cost  and  depreciated  by the
     straight-line  method  over  the  expected  useful  lives  of  the  assets.
     Expenditures for normal  maintenance and repairs are charged to income, and
     significant  improvements  are  capitalized.  The  cost of  assets  sold or


                                       23
<PAGE>
NOTE 3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

     abandoned and the related accumulated  depreciation are eliminated from the
     accounts and the net amount,  less  proceeds from  disposal,  is charged or
     credited to income.

  Use of Estimates and Assumptions

     Management uses estimates and assumptions in preparing financial statements
     in  accordance  with  generally  accepted  accounting   principles.   Those
     estimates  and  assumptions  affect  the  reported  amounts  of assets  and
     liabilities,  the disclosure of contingent assets and liabilities,  and the
     reported  revenues  and  expenses.  Actual  results  could  vary  from  the
     estimates that were used.

  Income Taxes

     The Company  accounts for income  taxes  pursuant to Statement of Financial
     Accounting  Standards  No. 109,  "Accounting  for Income  Taxes" (SFAS 109)
     which utilizes the asset and liability method of computing  deferred income
     taxes.  The  objective  of the asset and  liability  method is to establish
     deferred tax assets and liabilities for the temporary  differences  between
     the financial reporting basis and the tax basis of the Company's assets and
     liabilities at enacted tax rates expected to be in effect when such amounts
     are  realized  or  settled.  The  current and  deferred  tax  provision  is
     allocated  among the  members  of the  consolidated  group on the  separate
     income tax return basis.

  Research and Development Costs

     Research and development  costs are charged to operations when incurred and
     are included in operating expenses. The amounts charged for the years ended
     May  31,  2004  and  2003  were   approximately   $226,000  and   $207,000,
     respectively.

  Cash and Cash Equivalents

     For purposes of reporting  cash flows,  cash and cash  equivalents  include
     cash and  certificates of deposit with original  maturities of three months
     or less.

  Stock-based Employee Compensation

     The Company accounts for stock based  compensation  arrangements  under the
     provisions of Accounting  Principles Board Opinion No. 25,  "Accounting for
     Stock Issued to Employees", which requires compensation cost to be measured
     at the date of grant based on the intrinsic  value of the options  granted.
     The  intrinsic  value of an option is equal to the  difference  between the
     market  price of the  common  stock on the date of grant  and the  exercise
     price  of the  option.  No  stock  options  were  granted  in  2004 or 2003
     therefore there were no pro-forma effects on earnings to disclose using the
     fair value method under FASB 148.

     The Financial  Accounting Standards Board has issued Statement of Financial
     Accounting   Standards   (SFAS)  No.  123,   "Accounting   for  Stock-Based


                                       24
<PAGE>
NOTE 3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

     Compensation",  which provides for an alternative  measure of  compensation
     cost based on the fair value of the options  granted.  The fair value of an
     option  is based on the  intrinsic  value as well as the time  value of the
     option. The Company has adopted the disclosure provisions of SFAS No. 123.

  Shares, Per Share Data, Earnings Per Share,
  and Stock Split, and Common Stock Par Value


     Earnings per share are computed by dividing net income available for common
     stock by the weighted  average number of common shares  outstanding  during
     the year.  Weighted average shares outstanding were 2,190,080 and 2,177,613
     for the years  ended May 31,  2004 and 2003,  respectively.  Stock  options
     outstanding  at  May 31, 2003  were  not  included in   earnings  per share
     because their effect would be anti-dilutive.

  Dilutive effect of stock options  outstanding for the year ended May 31, 2004
  is computed as follows:

  Numerator:
      Net income                                             $ 1,422,113
                                                             -----------
      Numerator for basic and diluted earnings per share       1,422,113

  Denominator:
      Weighted-average shares outstanding-basic                2,190,080

  Effect of dilutive securities:
      Stock options                                               75,905
                                                             -----------
  Dilutive potential common shares                                75,905
                                                             -----------
      Denominator for diluted earning per share-weighted-
      average shares                                           2,265,985
                                                             ===========

      Basic earnings per share                               $      0.65
                                                             ===========

      Diluted earnings per share                             $      0.63
                                                             ===========
  Deferred Revenue

In April 2003,  Antenna Products  Corporation was awarded a $6,227,008  contract
from BAE SYSTEMS ATI to  manufacture  a 132 high power,  high-frequency  antenna
system in Alaska.  The fixed-price  contract has a scheduled  completion date of
July  31,  2004 and  stipulates  scheduled  milestone  payments  throughout  the
contract period.  In January 2004,  Antenna  Products  Corporation was awarded a
$603,626  contract  from BAE SYSTEMS ATI to pack and ship the antenna  system to
Alaska.  The  fixed-price  contract has a scheduled  completion date of July 31,
2004 and stipulates scheduled milestone payments throughout the contract period.
In April 2004,  Antenna Products  Corporation was awarded a $5,393,247  contract
from BAE SYSTEMS ATI to install the antenna  system in Alaska.  The  fixed-price
contract  has a scheduled  completion  date of  November 4, 2004 and  stipulates


                                       25
<PAGE>
NOTE 3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

scheduled milestone payments throughout the contract period.  Milestone payments
are received in advance of the  completion  of the related phase of the contract
and are recorded as deferred  revenue when received.  Revenue is recognized when
earned based on cost incurred to date plus  estimated  profit margin in relation
to the total estimated cost plus profit margin on the entire project.  Estimated
losses will be recognized in their  entirety  when they become  apparent.  These
estimates are subject to change in the near term and could significantly  impact
the financial  statements.  Deferred revenue recorded under the contract at each
of the years ended May 31, 2004 and 2003 is $0.

  Shipping and Handling Costs

     The Company  includes all shipping and handling costs together with cost of
     sales on the accompanying statements of operations.

  New Accounting Pronouncements

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
     Obligations.  SFAS No. 143 requires  that the fair value of a liability for
     an asset  retirement  obligation  be  recorded in the period in which it is
     incurred and the corresponding  cost capitalized by increasing the carrying
     amount of the related  long-lived  asset.  The liability is accreted to its
     present value each period, and the capitalized cost is depreciated over the
     useful life of the related asset. If the liability is settled for an amount
     other than the recorded amount, a gain or loss is recognized.  The standard
     is effective  for the Company for the fiscal year ending May 31, 2004,  but
     earlier adoption is encouraged.  The adoption of this standard did not have
     a material impact on the Company's financial statements.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
     with Exit or Disposal  Activities.  SFAS No. 146 liabilities  related to an
     exit or disposal  activity will be  recognized  when the liability has been
     incurred  instead of  recognizing  the liability at the date of an entity's
     commitment  to an exit plan.  The standard is effective for the Company for
     any exit or disposal  activities  initiated  after  December 31, 2002,  but
     earlier adoption is encouraged.  The adoption of this standard did not have
     an impact on the Company's financial statements.

     In  January  2003,  the FASB  issued  FIN 46,  "Consolidation  of  Variable
     Interest  Entities"  (VIE's),  an  interpretation  of  Accounting  Research
     Bulletin No. 51. FIN 46 requires certain variable  interest  entities to be
     consolidated  by the  primary  beneficiary  of  the  entity  if the  equity
     investors in the entity do not have the  characteristics  of a  controlling
     financial  interest or do not have sufficient equity at risk for the entity
     to finance its activities without additional subordinated financial support
     from other  parties.  In December  2003,  the FASB issued FIN 46R  (revised
     December  2003),  which delays the effective date of the application of FIN
     46 to  non-special  purpose VIE's  acquired or created  before  February 1,
     2003,  to the  interim  period  ending  December  31,  2004,  and  provides
     additional technical  clarifications to implementation  issues.  Management
     does  not  anticipate  the  adoption  of this  interpretation  will  have a
     material impact on the consolidated financial statements.



                                       26
<PAGE>
NOTE 4.   INVENTORIES

     The major components of inventories are as follows:

                                                 2004                 2003
                                          ----------------    -----------------
         Raw materials                        $   609,808           $  791,375
         Work in process                          467,582              559,965
         Finished goods                           378,060              339,376
                                          ----------------    -----------------
                                             $  1,455,450          $ 1,690,716
                                          ================    =================

     Certain allocable overhead costs such as depreciation,  insurance, property
     taxes and  utilities  are  included  in  inventory  based upon  percentages
     developed by the Company.  The aggregate  amount of these costs included in
     inventory  during the years ended May 31, 2004 and 2003 were  $527,884  and
     $554,806, respectively.

     All of the above stated  inventories are that of the operating  Subsidiary,
     Antenna Products Corporation. No other Subsidiaries carry inventory.

NOTE 5.   PROPERTY AND EQUIPMENT

     The following is a summary of the  Company's  property and equipment at May
     31:

                                    Estimated
                                   Useful Life        2004         2003
                                   -----------    -----------  -----------
      Land                                        $  375,136   $  375,136
      Buildings and improvements   15-30 years     1,873,217    1,873,217
      Machinery and equipment         10 years     3,406,569    3,187,501
      Automobiles and equipment        3 years       106,898      106,898
      Office furniture and fixtures   10 years       454,266      590,438
                                                  ----------   ----------
                                                   6,216,086    6,133,190
      Less accumulated depreciation                4,740,770    4,623,408
                                                  ----------   ----------
      Net property and equipment                  $1,475,316   $1,509,782
                                                  ==========   ==========

NOTE 6.   INTANGIBLE ASSETS
                                                     2004         2003
                                                  -----------  -----------
Included in intangible assets at May 31
       are the following:
   Noncompete agreements (Phazar Antenna Corp.)   $   60,000   $   60,000
   Patents, copyrights and other                     389,593      389,593
       intellectual property (Phazar Antenna      ----------   ----------
       Corp.)                                        449,593      449,593

   Accumulated amortization                         (361,544)    (264,563)
                                                  ----------   ----------
                                                  $   88,049   $  185,030
                                                  ==========   ==========

                                       27
<PAGE>
NOTE 6.   INTANGIBLE ASSETS - continued

     Patents,  copyrights and other intellectual property are being amortized on
     the   straight-line   basis  over  a  weighted  average  five-year  period.
     Non-compete  agreements are being amortized on the straight-line basis over
     weighted average three and one third year contractual basis.

     Aggregate amortization expense for the year ended May 31, 2004 was $96,981.
     Aggregate  amortization  expense  for each of the next  five  years  are as
     follows:

         2005                                         $81,799
         2006                                           5,000
         2007                                           1,250

NOTE 7.   NOTES PAYABLE

     At May 31, 2004 and 2003, notes payable consist of a revolving note payable
     to a bank, with a maximum amount not to exceed the lesser of $1,000,000 and
     $2,000,000,  respectively  or a calculated  borrowing base  determined by a
     formula  based  upon  the  amount  of  certain  qualified  receivables  and
     inventories as defined in the loan agreement.  Amounts  available under the
     revolving  note at May 31,  2004 and 2003  were  $1,000,000  and  $681,000,
     respectively.

     Interest  is  payable  monthly at the prime rate (4.0% and 4.25% at May 31,
     2004 and 2003,  respectively)  plus 1% until  September 30, 2004,  when any
     unpaid principal and interest shall be due.  Borrowings under the revolving
     note payable are  collateralized  by accounts  receivable and  inventories.
     Under  the  agreement,  the  Company  must  maintain  minimum  net worth of
     $2,000,000 and working capital of $1,000,000.

     The  Company  has an unused  letter of credit  from a bank in the amount of
     $3,000,000. The letter of credit was obtained in procurement of a contract.

NOTE 8.   LONG-TERM DEBT

     At May 31, 2004 and 2003, long-term debt consists of the following:

                                                    2004        2003
                                                -----------  -----------
      Mortgage note to a bank, guaranteed 80%
      by a U.S.  government  agency,  payable
      $10,050 per month,  including  interest
      at the  prime  rate  (4.0% and 4.25% at
      May 31,  2004 and  2003,  respectively)
      plus 0.5% (matures September 11, 2011);
      collateralized  by certain real estate,
      fixtures   and   assignment   of   life
      insurance   policy   with  a  principal

      shareholder.    The    note   is   also
      guaranteed  by a principal  shareholder
      and the Company is required to maintain
      certain covenants including  $1,000,000


                                       28
<PAGE>
NOTE 8.   LONG-TERM DEBT - continued

      in  working  capital  and  a  ratio  of
      maximum  debt to net  worth of seven to
      one. The Company was in compliance with
      these  covenants  at May 31,  2004  and
      2003.                                      $ 631,918    $ 695,523

      Less current portion of long-term debt        63,804       63,804
                                                 ---------    ---------
                                                 $ 568,114    $ 631,719
                                                 =========    =========

         Maturities of long-term  debt for each of the five years  subsequent to
May 31, 2004 are as follows:

      2005                                            $  63,804
      2006                                               73,362
      2007                                               78,665
      2008                                               84,352
      2009                                               90,450
      Thereafter                                        241,285
                                                      ---------
                                                      $ 631,918
                                                      =========
































                                       29
<PAGE>
NOTE 9.   INCOME TAXES

     Components of the income tax provision are as follows:
                                                        2004        2003
                                                    -----------  -----------
     Federal income taxes at statutory rate
                 on income before income taxes      $  721,018   $  132,544
     State income taxes statutory rate                   7,819        6,315
     Non-deductible expenses and other                   2,427          (60)
                                                    ----------   ----------
     Total provision                                $  731,264   $  138,799
                                                    ==========   ==========
     Deferred portion of provision                  $   42,144   $  132,484
     Current portion of provision                      689,120        6,315
                                                    ----------   ----------
     Total provision                                $  731,264   $  138,799
                                                    ==========   ==========

     The tax  effects of  temporary  differences  that give rise to  significant
     portions  of the  deferred  tax assets and  deferred  tax  liabilities  are
     presented below:
                                                        2004        2003
                                                    -----------  -----------
      Deferred tax assets:
        Accounts receivable, due to allowance
                for doubtful accounts               $    2,388   $    2,388
        Accrued expenses, due to warranty accrual       71,400       10,200
        Accrued expenses, due to vacation accrual       27,750       25,299
        Accrued expenses, due to bonus accrual               -       33,320
        Intangible assets, due to difference in
                amortization                            76,411       55,929
        Net operating loss carryforward                      -      133,407
        Inventories, due to estimated losses on
                contracts                               13,600            -
                                                    ----------   ----------
      Total deferred tax assets                     $  191,549   $  260,543

      Deferred tax liabilities:

            Property and equipment, principally
              due to difference in depreciation     $ (146,325)  $ (173,175)
                                                    ----------   ----------
      Total deferred tax liability                  $ (146,325)  $ (173,175)
                                                    ----------   ----------
            Net deferred tax asset                  $   45,224   $   87,368
                                                    ==========   ==========

      The net deferred tax assets are classified
      on the balance sheet as follows:

            Current deferred tax assets             $  115,138   $   71,207
            Long-term deferred tax assets                    -       16,161
            Long-term deferred tax liabilities         (69,914)           -
                                                    ----------   ----------
                                                    $   45,224   $   87,368
                                                    ==========   ==========

                                       30
<PAGE>
NOTE 10.   COMMITMENTS AND CONTINGENCIES

     The  Company  has adopted an employee  profit  sharing  plan under  Section
     401(k) of the Internal  Revenue Code.  All employees  with a minimum of one
     year of  employment  are  eligible to  participate.  The Company will match
     employee  contributions for an amount up to 3% of each employee's salary if
     certain earnings  requirements are met.  Contributions  are invested at the
     direction of the employee in one or more funds. Company  contributions vest
     after three years of service. Company contributions amounted to $63,144 and
     $0 for the years ended May 31, 2004 and 2003, respectively.

     Concentration of Credit Risk

        The Company  deposits its cash primarily in deposit  accounts with major
        banks.  Certain cash deposits may occasionally be in excess of federally
        insured limits. The Company has not incurred losses related to its cash.

        The  Company  sells many of its  products to the U.S.  Government,  both
        military and civil agencies, and prime contractors. Although the Company
        might be directly  affected  by the well being of the defense  industry,
        management  does not believe  significant  credit risk exists at May 31,
        2004.

        Ongoing  credit  evaluations  of  customer's   financial  condition  are
        performed  and,  generally,  no  collateral  is  required.  The  Company
        maintains  reserves for potential credit losses and such losses have not
        exceeded management's expectations.

     Fair Value of Financial Instruments

        The  following  disclosure  of the  estimate  fair  value  of  financial
        instruments is made in accordance with the requirements of SFAS No. 107,
        Disclosures  about Fair Value of Financial  Instruments.  The  estimated
        fair value amounts have been determined by the Company,  using available
        market information and appropriate valuation methodologies.

        The fair value of financial instruments  classified as current assets or
        liabilities  including  cash  and  cash  equivalents,   receivables  and
        accounts  payable  approximate  carrying  value  due to  the  short-term
        maturity of the instruments.  The fair value of short-term and long-term
        debt approximate  carrying value based on their effective interest rates
        compared to current market rates.

     Operating Leases

        The  Company  leases  software  under a  noncancelable  operating  lease
        arrangement.  Rent expense under this lease agreement during each of the
        years  ended May 31, 2004 and 2003 was  $31,925.  Future  minimum  lease
        obligations under the lease agreement are as follows:

                  2005                                                $   31,925
                  2006                                                     5,321
                                                                      ----------
                                                                      $   37,246



                                       31
<PAGE>
NOTE 10.   COMMITMENTS AND CONTINGENCIES - continued

        The software lease agreement will be paid in full in 2006.

     Legal Proceedings

        The  Company  is  currently  involved  in  litigation  with  one  former
        employee.  Management believes the lawsuit is without merit and will not
        have a  material  impact on the  financial  statements  and  intends  to
        vigorously defend against it.

        During the year ended May 31,  2004 final and  binding  arbitration  was
        finalized from litigation with two former  employees.  The  arbitrator's
        ruling was for the Company to pay a settlement of approximately $100,000
        to the two former  employees.  The Company intends to vigorously  appeal
        the arbitrator's  finding through the courts. The settlement against the
        company is included in accrued  expenses on the balance sheet at May 31,
        2004

     Product Warranties

        PHAZAR CORP's  management  estimates  accrued  warranty expense based on
        warranty  work  received but not performed and on analysis of historical
        trends including actual expense as a percent of sales.

        Changes in accrued warranty liability for the years ended May 31, are as
        follows:

                                              2004              2003
                                            --------          --------
        Beginning balance                   $ 30,000          $ 30,000
        Cost incurred for rework             (37,190)          (31,092)
        Accrual for current year estimate    211,000            30,000
        Change in accrued estimate             7,190             1,092
                                            --------          --------
        Ending balance                      $211,000          $ 30,000
                                            ========          ========


NOTE 11.   STOCK OPTIONS

     In 1999, the Board of Directors  approved a stock option plan that provided
     the option to purchase 60,000 shares at $2.00 to an officer of the Company.
     The plan has an  expiration  date of March 31,  2006 or the  earlier of the
     officer's last day of employment.

     During the years ended May 31, 2004 and 2003,  the Board of  Directors  did
     not grant any stock options.

     A summary of the status of the  Company's  stock  option plan as of May 31,
     2004 and 2003 and changes for the years then ended are as follows:






                                       32
<PAGE>
NOTE 11.   STOCK OPTIONS - continued

                                                                Weighted
                                                                 Average
                                                                Exercise
                                             Shares               Price
                                           ---------          ------------

     Outstanding at May 31, 2002             480,000                2.15
         Granted                                   -                   -
         Exercised                                 -                   -
         Forfeited                           345,000                2.21
                                             -------

     Outstanding at May 31, 2003             135,000                2.00
         Granted                                   -                   -
         Exercised                             5,000                   -
         Forfeited                                 0                0.00
                                             -------

     Outstanding at May 31, 2004             130,000
                                             =======

                                              2004              2003
                                            --------          --------
     Exercisable at May 31                   130,000           110,250
                                            ========          ========
     Weighted average fair value of
      options granted during the year       $      0          $      0
                                            ========          ========
     Weighted averaged remaining
      contractual life (in years) 2001          2.87               4.5
      and 2000 plans respectively           ========          ========

Item 8.  Changes In and Disagreements With Accountants on Accounting
         and Financial Disclosure.

None.



















                                       33
<PAGE>
                                    PART III

Item 9.  Directors and Executive Officers of the Registrant.

                                                                 Director
Name             Age Principal Occupation                        Since
----             ------------------------                        -----
Gary W. Havener  63  President and Chief Executive Officer,
                     PHAZAR CORP; Sole Director Antenna
                     Products Corp., Phazar Antenna Corp.
                     and Thirco, Inc., subsidiaries of
                     PHAZAR CORP; President,
                     Thirco, Inc. and Sinan Corp.                January 1992

Clark D. Wraight 60  Vice President and Secretary, Treasurer,
                     PHAZAR CORP; President and General
                     Manager, Antenna Products Corp. and
                     Phazar Antenna Corp.; Vice President,
                     Thirco, Inc.; Secretary, Treasurer,
                     Thirco, Inc., and Phazar Antenna Corp.      October 1996

R. Allen Wahl    76  Independent Business Consultant and
                     Past President & COO of Valmont
                     Industries                                  October 1999

James Miles      61  Past Vice President and General Manager,
                     GTE Media Ventures; Past President,
                     Contel of California                        November 1999

James Kenney     63  Executive Vice President and Owner
                     San Jacinto Securities, Inc.                November 1999

         Mr.  Havener  served as the  President of PHAZAR CORP from January 1992
until  October 1999.  Mr.  Havener  served as the President of Antenna  Products
Corporation from January 1996 until April 1999. Mr. Havener  currently serves as
President and CEO of PHAZAR CORP and President of Thirco,  Inc. Mr. Havener also
serves as sole director of Antenna  Products  Corporation,  Phazar Antenna Corp.
and Thirco,  Inc. Since December 1984 Mr. Havener has served as the President of
Sinan Corp., an investment company.  Sinan Corp. is not a parent,  subsidiary or
affiliate of the Company.

         Mr. Wraight served as Vice President and Secretary/Treasurer of Antenna
Products Corporation from 1996 until April 1999 when he was appointed President.
Mr. Wraight has been employed with Antenna Products since 1979 and has served as
an officer of the  Company  since 1981.  Mr.  Wraight  currently  serves as Vice
President and  Secretary/Treasurer of PHAZAR CORP, President and General Manager
of Antenna Products  Corporation,  President and Secretary  /Treasurer of Phazar
Antenna  Corp.  and Vice  President  and  Secretary/Treasurer  of Thirco,  Inc.,
subsidiaries of the Company.

         Mr. Wahl was  President  and COO of Valmont  Industries.  The principal
business of Valmont Industries is manufacturing  steel tubular poles and lattice
towers  for  the  communication  industry.  Mr.  Wahl  currently  serves  as  an
independent business consultant.



                                       34
<PAGE>
         Mr. Miles  served as Vice  President  and General  Manager of GTE Media
Ventures, a cable television design and operations company, from 1994 until 1999
and as President of Contel of California, a telecommunications company from 1984
until 1996. Mr. Miles was a Director of Desert Community Bank until 1994.

         Mr.  Kenney has served as  Executive  Vice  President  and owner of San
Jacinto Securities since 1993. San Jacinto Securities is an institutional  stock
brokerage firm.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's officers and directors, and persons who own more than ten percent of a
registered  class  of the  Company's  equity  securities,  to  file  reports  of
ownership  on Form 3 and  changes  in  ownership  on  Form 4 or Form 5 with  the
Securities and Exchange  Commission  (the "SEC").  Such officers,  directors and
ten-percent  shareholders  are also required by SEC rules to furnish the Company
with copies of all Section 16(a) forms they file.

         Based solely on its review of the copies of such forms  received by it,
or written  representations from certain reporting persons, the Company believes
that,  during the fiscal  year ended May 31,  2004,  all  Section  16(a)  filing
requirements applicable to its officers,  directors and ten-percent shareholders
have been filed.

Item 10.  Executive Compensation.

Name and Principal
------------------
Position                  Annual Compensation
--------                  -------------------
President and CEO
                    Fiscal Year                            Other Annual
                    Ended May 31  Salary ($)  Bonus ($)  Compensation ($)
                    ------------  ----------  ---------  ----------------
Gary W. Havener     2004          $0          $0         $     4,500(1)
                                                         $    98,000(2)

Gary W. Havener     2003          $0          $0         $     3,000(1)
                                                         $    98,000(3)

Gary W. Havener     2002          $0          $0         $     4,072(1)
                                                         $         1(4)

    (1)      PHAZAR CORP Director's Fee.
    (2)      2004 Antenna Products Corp. Director's Fee - $98,000 paid
    (3)      2003 Antenna Products Corp. Director's Fee - $98,000 accrued
    (4)      2002 Antenna Products Corp. Directors' Fee - $1 paid

             Accrued amounts are paid in the following year.

COMPENSATION OF DIRECTORS

Compensation  for PHAZAR  CORP  Board  members is set at $500 plus 200 shares of
PHAZAR CORP common stock for each board meeting attended.  A total of $4,500 and


                                       35
<PAGE>
1,800 shares was paid each to Gary W. Havener,  Clark D. Wraight, R. Allen Wahl,
James Kenney and James Miles in the fiscal year ended May 31, 2004.

Compensation  for PHAZAR  CORP audit  committee  members is set at $250 plus 100
shares of PHAZAR CORP common stock for each audit  committee  meeting  attended.
$1,500 and 600 shares were paid each to James  Kenney,  James Miles and R. Allen
Wahl in the fiscal year ended May 31, 2004.

Item 11.  Security Ownership of Certain Beneficial Owners and Management and
          Related Stockholder Matters.

The following table set forth the beneficial  ownership of the Company's  Common
Stock as of July 12,  2004,  (a) by each  director,  (b) by the named  executive
officers,  and (c) by all  persons  known to the  Company  to be the  beneficial
owners of more than 5% of the  Company's  Common Stock and (d) all directors and
executive officers as a group.

Name and Address             Shares Owned Directly      Percent of
of Beneficial Owners (1)     and Indirectly             Class (2)
------------------------     ---------------------      ---------
Gary W. Havener   (3)
Sinan Corp.                    883,436                  40.20%
P.O. Box 121697
Ft. Worth, TX 76121

R. Allen Wahl                    7,700                    .35%
13 Collinway Place
Dallas, TX 75230

Clark D. Wraight
Antenna Products Corporation   156,765                   7.13%
101 S.E. 25th Ave.
Mineral Wells, TX 76067

James Miles                      6,000                    .27%
420 Private Rd. 52363
Pittsburg, TX 75686

James Kenney                     5,400                    .25%
5949 Sherry Lane, Suite 960
Dallas, TX 75225

YDI Wireless, Inc.             470,250                  21.40%
8000 Lee Highway
Falls Church, VA 22042

All directors and officers   1,059,301                  48.20%
of PHAZAR CORP
as a group (Five Persons)

    (1)    The persons named herein have sole voting and  investment  power with
           respect to all shares of Common Stock shown as beneficially  owned by
           them, subject to community property laws where applicable and subject
           to the Texas laws for personal holding companies, as applicable.



                                       36
<PAGE>
    (2)    Based on total outstanding shares of 2,197,828 as of July 12, 2004.

    (3)    Sinan Corp.,  wholly owned by Mr.  Havener and his children,  owns of
           record  387,390  of these  shares  representing  17.63%  of the total
           outstanding  shares. Mr. Havener as President of Sinan Corp. has sole
           voting  and  investment  power  with  respect to all shares of common
           stock shown as beneficially owned by Sinan Corp.

Item 12.  Certain Relationships and Related Transactions.

On May 31, 2003 PHAZAR CORP sold the assets and business of Phazar Aerocorp Inc.
to Phaero  LLC, a new  corporation  that was formed by Gary  Havener,  principal
shareholder and President of PHAZAR CORP and Brian Perryman,  General Manager of
Phazar  Aerocorp Inc.  Phaero LLC  purchased the assets of Phazar  Aerocorp Inc.
including the name Phazar  Aerocorp and assumed the  liabilities,  including all
indebtedness   and  lease   obligations  of  Phazar  Aerocorp  Inc.  except  the
intercompany  debt.  Phaero LLC also assumed PHAZAR CORP's  subsidiary,  Antenna
Products  Corporation's  $800,000  indebtedness to Sinan Corp. as a condition of
the sale. Sinan Corp is Mr. Havener's family investment company.






































                                       37
<PAGE>
Item 13.  Exhibits and Reports on Form 8-K.

(a)  The following documents are filed as part of this report:

     1.  Financial Statements.  The following  consolidated statements of PHAZAR
         CORP and subsidiaries and related notes are presented in Item 7:

         Consolidated Balance Sheets - May 31, 2004 and 2003

         Consolidated  Statements  of  Operations - Years Ended May 31, 2004 and
         2003

         Consolidated  Statement  of  Shareholders' Equity - Years Ended May 31,
         2004 and 2003

         Consolidated  Statements  of  Cash Flows - Years Ended May 31, 2004 and
         20032

         Notes To Consolidated Financial Statements

     2.  Financial Statement Schedules.  Not applicable.

         All other schedules  have been omitted because the required information
         is shown in the consolidated financials or notes thereto, or  they  are
         not applicable.

     3.  Exhibits.

         2.     Sale of Assets  Agreement,  dated May 31, 2003 between and among
                Phazar Aerocorp,  Inc.,  PHAZAR CORP and Phaero LLC incorporated
                by reference to the Registrant's Form 8-K filed on June 13, 2003

         3.(i)  Registrant's Articles of Incorporation, as amended, incorporated
                by reference to the like  numbered  exhibit in the  Registrant's
                Annual Report on Form 10-KSB/A for the fiscal year ended May 31,
                2000 filed on February 20, 2004

         3.(ii) Registrant's  By Laws,  incorporated  by  reference  to the like
                numbered  exhibit  in the  Registrant's  Annual  Report  on Form
                10-KSB/A  for the  fiscal  year  ended  May 31,  2000,  filed on
                February 20, 2004

         4.(ii) Loan Agreement  between Antenna  Products  Corporation and Texas
                Bank, dated September 30, 1991, incorporated by reference to the
                like numbered exhibit in the Registrant's  Annual Report on Form
                10-KSB/A  for the  fiscal  year  ended  May 31,  2000,  filed on
                February 20, 2004

         10.(b) BAE  SYSTEMS  ATI  Contract  dated May 5, 2003  incorporated  by
                reference  to the  like  numbered  exhibit  in the  Registrant's
                Annual Report on Form 10-KSB/A for the fiscal year ended May 31,
                2004, filed on February 20, 2004

                BAE SYSTEMS ATI Subcontract dated April 23, 2004



                                       38
<PAGE>
         14.1   Code of Ethics and Business Conduct for the Senior Executive
                Officers and Senior Financial Officers

         15.    Independent Auditor's Report dated July 15, 2004.

         21.    A list of all  subsidiaries of the  Registrant,  incorporated by
                reference  to the  like  numbered  exhibit  in the  Registrant's
                Annual Report on Form 10-KSB/A for the fiscal year ended May 31,
                2000 filed on February 20, 2004

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

         31.2   Rule   13a-14(a)/15d-14(a)   Certification  of  Chief  Financial
                Officer

         32.1   Section 1350 Certification

(b)  Reports on Form 8-K.

                On June 13, 2003 the registrant filed a Form 8-K for the purpose
                of  disclosing  the sale of the  assets and  business  of Phazar
                Aerocorp Inc., a Texas  Corporation and 80% owned  subsidiary of
                PHAZAR CORP.  The sale was effective on May 31, 2003. The effect
                of the sale has been included in the consolidated  financials as
                discontinued operations.

Item 14.  Controls and Procedures.

As of May 31, 2004, an evaluation was performed  under the  supervision and with
the participation of the Company's management, including the CEO and CFO, of the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures.  Based on that evaluation,  the Company's management,  including
the CEO and CFO, concluded that the Company's disclosure controls and procedures
were  effective  as of May 31,  2004.  There  has not  been  any  change  in the
Company's  internal  controls  during the Company's last fiscal quarter that has
materially  affected  or is  reasonably  likely to  materially  affect  internal
controls over financial reporting as of May 31, 2004.





















                                       39
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
and  Exchange  Act of 1934,  the  Registrant  has duly  caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

DATE:  July 30, 2004

                                   PHAZAR CORP



                                    --------------------------------
                           BY:      Gary W. Havener
                                    Principal Executive Officer and Director

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities and on the dates indicated.

Signature                         Title                            Date
---------                         -----                            ----

                                  Principal Financial Officer      July 30, 2004
-------------------------------   and Principal Accounting Officer
Clark D. Wraight                  and Director

                                  Director                         July 30, 2004
-------------------------------
James Miles


                                  Director                         July 30, 2004
-------------------------------
James Kenney


                                  Director                         July 30, 2004
-------------------------------
R. Allen Wahl

















                                       40
<PAGE>
                                  EXHIBIT INDEX


Exhibit 2. -    Sale of Assets  Agreement,  dated May 31, 2003 between and among
                Phazar Aerocorp,  Inc.,  PHAZAR CORP and Phaero LLC incorporated
                by  reference  to the  Registrant's  Form 8-K  filed on June 13,
                2003.

Exhibit 3.(i) - Registrant's Articles of Incorporation, as amended, incorporated
                by reference to the like  numbered  exhibit in the  Registrant's
                Annual Report on Form 10-KSB/A for the fiscal year ended May 31,
                2000 filed on February 20, 2004

Exhibit 3.(ii) -Registrant's  By Laws,  incorporated  by  reference  to the like
                numbered  exhibit  in the  Registrant's  Annual  Report  on Form
                10-KSB/A  for the  fiscal  year  ended  May 31,  2000,  filed on
                February 20, 2004

Exhibit 4.(ii) -Loan Agreement  between Antenna  Products  Corporation and Texas
                Bank, dated September 30, 1991  incorporated by reference to the
                like numbered exhibit in the Registrant's  Annual Report on Form
                10-KSB/A  for the  fiscal  year  ended  May 31,  2000,  filed on
                February 20, 2004

Exhibit 10.(b) -BAE  SYSTEMS  ATI  Contract  dated May 5, 2003  incorporated  by
                reference  to the  like  numbered  exhibit  in the  Registrant's
                Annual  Report on Form 10-KSB/A for the year ended May 31, 2004,
                filed on February 20, 2004

                BAE SYSTEMS ATI Subcontract dated April 23, 2004

Exhibit 14.1 -  Code  of  Ethics  and  Business Conduct for the Senior Executive
                Officers and Senior Financial Officers

Exhibit 15. -   Independent Auditor's Report dated July 15, 2004

Exhibit 21. -   A list of all  subsidiaries of the  Registrant,  incorporated by
                reference  to the  like  numbered  exhibit  in the  Registrant's
                Annual Report on Form 10-KSB/A for the fiscal year ended May 31,
                2000 filed on February 20, 2004

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

Exhibit 31.2 -  Rule   13a-14(a)/15d-14(a)   Certification  of  Chief  Financial
                Officers

Exhibit 32.1 -  Section 1350 Certification









                                       41