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, 2001

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

                         Commission file number 0-12866

                                   PHAZAR CORP
                          (fka ANTENNA PRODUCTS, INC.)
             (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, 2001 was $15,060,237.

As of August 10, 2001 2,170,328  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  (880,082
shares) was approximately $1,408,131.

DOCUMENTS INCORPORATED BY REFERENCE

The Company's  Proxy  Statement  dated August 27, 2001 for its annual meeting of
shareholders  to be held October 9, 2001 is  incorporated by reference into Part
III of this report.

Transitional Small Business Disclosure Format (check one) : Yes [ ]  No [X]
<PAGE>
                                     PART 1

Item 1.  BUSINESS

General

A majority of the shareholders of Antenna  Products,  Inc. approved changing the
corporate  name to PHAZAR CORP because  there had been a tendency to confuse the
Antenna  Products,  Inc.  name with that of its original  operating  subsidiary,
Antenna  Products Corp. The name change was effective on the Nasdaq Stock Market
as of the open of  business  on March 12,  2001.  The  trading  symbol  remained
"ANTP".

At the same time, the name of API  Acquisition  Corp.  dba The Upholstery  Shop,
Inc.!,  another  operating  subsidiary  was changed to Phazar  Aerocorp Inc. The
Subsidiary  will commence  using the name Phazar  Aerocorp Inc. when it moves in
the fall of this year to its new 86,000  square foot  facility  currently  under
construction at Meacham International Airport in Fort Worth, Texas.

PHAZAR CORP  operates as a holding  company with Antenna  Products  Corporation,
Phazar Aerocorp Inc. (dba The Upholstery Shop, Inc.!),  Phazar Antenna Corp. and
Thirco, Inc. as its subsidiaries.  Antenna Products Corporation, Phazar Aerocorp
Inc. 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  Corporations'  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, monopoles, 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, self
supported towers and monopoles.

                                       2

<PAGE>
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 2001  AIRSYS  ATM,  Inc.  was the  single  largest
customer, and accounted for 10% of the sales volume. The U.S. Government totaled
8% of sales.  Orders for  equipment in some of these product  categories  are in
backlog and, therefore, AIRSYS ATM, Inc. and the U.S. Government are expected to
be major clients again in 2002.

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  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  27% of total
inventory,  $613,146 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

                                       3
<PAGE>
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  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 2001  Antenna  Products  Corporation  invested  2.1% of  sales in
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 2002.  The  level of  expenditures  for R&D and B&P as a ratio to
sales was 3.3% of sales in 2000. Antenna Products  Corporation does not consider
patents  to be  material  to its  operations  nor would the loss of any  patents
adversely affect operations.

Phazar  Aerocorp Inc. (fka API  Acquisition  Corp.) (dba "The  Upholstery  Shop,
Inc.!")

Phazar Aerocorp Inc. is an 80% owned subsidiary of PHAZAR CORP. It was formed on
January 24, 2000 as a Texas  corporation.  Phazar  Aerocorp  Inc.  purchased the
assets and business of The  Upholstery  Shop,  Inc.!  on January 27,  2000.  The
assets purchased included the machinery and equipment. No land or buildings were
included as part of this acquisition. The acquisition was recorded as a purchase
transaction and the operations of the Upholstery  Shop, Inc.! have been included
in the financials from the date of acquisition.  Phazar Aerocorp Inc.  currently
does  business as The  Upholstery  Shop,  Inc.!  at a leased  facility at 326 N.
Highway 377, Roanoke, Texas 76262. The telephone number is (817) 430-2306

The Company will commence  using the name Phazar  Aerocorp Inc. when it moves in
October 2001 to the new 86,000 square foot facility currently under construction
at Meacham International Airport in Fort Worth Texas. Phazar Aerocorp Inc.'s new
address at  Meacham  International  Airport  will be 4701 N. Main  Street,  Fort
Worth, Texas 76106. The new telephone number will be (817) 626-2842.

The Upholstery Shop, Inc.!  provides complete  refurbishment for a full range of
corporate  and  executive  aircraft  interiors.  The  range  and  scope of these
services  include  design and  fabrication  of seats,  side panels,  headliners,
galleys and cabinets, as well as the design and installation of custom lighting,
entertainment systems and cabin management systems.

The Upholstery Shop, Inc.!  removes existing  interiors of aircraft and installs
new  interiors   designed  to  customer   specifications   and  coordinates  the
refurbishment  of exteriors for customers  when required.  The Upholstery  Shop,
Inc.!  provides  this service on virtually  all-executive  and  corporate  class
aircraft,  including,  but not limited to:  Lear,  Cessna,  Gulfstream,  Galaxy,
Dassault,  and Bombardier.  The  refurbishments are diverse with the lower range
being a minor  upgrading of Lear 25's to total interior  upgrading of the larger
aircraft of the Gulfstream and Falcon family.


                                       4

<PAGE>
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 product  development unit. Phazar Antenna
Corp. currently leases space at 122 Remington Boulevard,  Ronkonkoma,  New York,
11779. The telephone number is (631) 471-6660.

On November 20, 2000,  Phazar Antenna Corp.  purchased the  non-mobile  wireless
antenna  systems  business  unit of  Hirschmann  Electronics,  Inc. The tangible
assets  purchased  consisted  of  the  tooling,  fixtures,  radome  molds,  test
equipment,  and office equipment.  The intangible assets purchased  included the
engineering  data,  manufacturing  drawings,  test  procedures,   vendor  lists,
customer lists, product data sheets, and pattern  information.  No real property
was  included  in the  purchase.  The  acquisition  was  recorded  as a purchase
transaction and has been included in the  consolidated  financials from the date
of purchase.  Key technical and marketing personnel from the Hirschmann business
unit also joined Phazar Antenna Corp.

The wireless  antenna  systems  business  purchased from  Hirschmann  provides a
complete  line of 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 the Company's  existing product lines of cellular,  PCS, paging, ISM
and AMR (automatic meter reading)  omni-directional and sector wireless antennas
and is  currently  being  produced 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.

Seasonality

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

Backlog

The  backlog  of orders at  Antenna  Products  Corporation  was $3.1  million at
year-end.  This  compares  to $3.9  million in backlog at the end of fiscal year
2000. In August, the backlog was $4.1 million.  Over 90% of this backlog will be
delivered in the 2002 fiscal year.

The backlog of orders at Phazar Aerocorp Inc. was $1.2 million at year-end. This
compares to $2.9  million in backlog at the end of fiscal year 2000.  In August,
the backlog was $1.1  million of which all will be  delivered in the 2002 fiscal
year.

                                       5
<PAGE>
Phazar Antenna Corp.  orders are normally  shipped within 2 weeks,  hence Phazar
Antenna Corp. backlog of orders was negligible at year-end.

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 or electro-mechanical  components,  leather, carpet,
wood veneers and laminates.  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  August  10,  2001  Antenna  Products  Corporation  employed  a  total  of
eighty-two employees.  Of the eighty-two,  eleven are employed in administration
and sales,  eight in  engineering  and technical  support,  and  sixty-three  in
manufacturing.  None of Antenna Products Corporation's  employees are subject to
collective bargaining agreements.

Phazar Aerocorp Inc. employed a total of thirty-nine  employees as of August 10,
2001. Of the thirty-nine,  seven are employed in administration  and sales, five
in avionics  design and support,  twenty-one  in the shop areas,  and six in the
installation  crew.  None of Phazar  Aerocorp  Inc.'s  employees  are subject to
collective bargaining agreements.

Phazar Antenna Corp.  employed a total of seven employees as of August 10, 2001.
Of the seven,  three are employed in  administration  and sales, and four are in
engineering.  None  of  the  Phazar  Antenna  Corp.  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
2001 and 2000 were 6.2% and 15.6%, respectively, of total sales.

Phazar  Aerocorp Inc. and Phazar  Antenna  Corp.  have no  significant  sales to
international customers.

Item 2.  PROPERTIES

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


                                       6
<PAGE>
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
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  Aerocorp  Inc.  leases a facility  located along Highway 377 in Roanoke,
Texas. The facility  consists of two buildings that contain 2,000 square feet of
administrative  and sales  offices  and 12,000  square  feet of shop  area.  The
facility is well equipped with machinery and equipment  owned by Phazar Aerocorp
Inc. The design and fabrication of seats,  side panels,  headliners and cabinets
is  completed  at  this  facility.   The  finished  custom  interiors  are  then
transported  to the airport  where the aircraft is located and  installed by the
installation crew.

Phazar  Aerocorp  Inc.  will move to a new  facility  on  Meacham  International
Airport in Fort Worth,  Texas in October 2001. This leased facility  consists of
three  hanger  buildings.   The  main  hanger  contains  2,000  square  feet  of
administrative  and sales  offices,  18,000  square feet of shop area and 39,500
square feet of aircraft hanger space. The two auxiliary hangers each contain 13,
375 square feet of aircraft storage space.

Phazar Antenna Corp. leases a facility in Ronkonkoma, New York. The leased space
consists of 4,000 square feet of administrative,  sales and engineering  offices
plus an outside area used as an antenna test range.

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.

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 2001.

                                     PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
         HOLDER MATTERS


                                       7
<PAGE>
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 1999                         1.531            1.25
November 1999                       3.313            1
February 2000                       6.25             1.313
May 2000                            4                2.313

August 2000                         3.125            1.5
November 2000                       2.938            1.063
February 2001                       2.50             1.00
May 2001                            2.219            1.30

Holders

At August 10, 2001 there were  approximately  1,348  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 consideration for the execution of noncompetition  agreements  between Phazar
Antenna  Corp.  and  John  Cosenza,  John  Kryspin  and  Steve  Schueler,  three
employees, John Cosenza received 15,000 shares of PHAZAR CORP common stock, John
Kryspin  received  7,500 shares of PHAZAR CORP common  stock and Steve  Schueler
received 7,500 shares of PHAZAR CORP common Stock. The three employees 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.

As partial  consideration  for  attending  the PHAZAR  CORP Board of  Directors'
meetings,  Gary W. Havener,  Clark D. Wraight,  James Miles,  James Kenney,  and
Billy J. Perry each  received  600 shares of PHAZAR  CORP common  stock,  and R.
Allen Wahl  received 400 shares of PHAZAR CORP common  stock.  Also,  as partial


                                       8
<PAGE>
consideration  for attending  the PHAZAR CORP audit  committee  meetings,  James
Miles and James Kenney each received an additional

100 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.

Item 6.  SELECTED FINANCIAL DATA

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 8.

                              FISCAL YEAR ENDING MAY 31


                                    2001             2000
                                    --------         ---------
Net Sales                           $15,060,237      $  7,861,707
Income (loss) from continuing
  Operations                        $   162,175     ($     84,769)
Income per share from
  continuing operations             $       .08     ($        .04)
Total Assets                        $ 8,454,149      $  9,762,254
Long Term Debt                      $ 2,851,385      $  3,124,387
Dividends                           $      0.00      $       0.00
---------

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Results of Operation

PHAZAR CORP's on-going  operation is that of its subsidiaries,  Antenna Products
Corporation,  Phazar  Aerocorp Inc.,  Phazar  Antenna 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 8.

Year ended May 31, 2001 ("2001") Compared with Year Ended May 31, 2000 ("2000")

Antenna Products Corporation  experienced improved sales in the first and second
quarter of fiscal year 2001, resulting in overall sales of $8.3 million in 2001.
This is $2.0 million or 32% more than the $6.3 million in sales in 2000.  Orders
improved in both military and commercial markets from a total of $7.3 million in
2000 to $7.6 million in 2001.  This resulted in an ending backlog of firm orders
at year-end of $3.1 million,  down 21% from the prior  year-end  backlog of $3.9
million.


                                       9
<PAGE>
The gross  profit  margin for fiscal year 2001 was 35%  compared to 26% in 2000.
Sales and administrative  expenses as a ratio to sales were 32% of sales in 2001
compared to 22% in 2000.  Antenna  Products  Corporation's  operating margin for
2001 was 3.4% compared to 5.1% in 2000.  Warranty  charges of $37,331 were lower
than  last  year's  rate  of  $84,590,  and  averaged  less  than  2% of  sales.
Discretionary  products development  spending was $274,563,  or 3.3% of sales in
2001. This was an increase from $205,218 or 3.3% of sales in 2000.

Interest  expense for Antenna  Products  Corporation  increased from $225,402 in
2000 to $235,504 in 2001. The Subsidiary experienced a pre-tax profit of $89,646
in 2001  compared  to a pre-tax  profit of  $79,303  in 2000.  Antenna  Products
Corporation is expected to continue to be profitable in 2002.

Phazar Aerocorp Inc.  experienced improved sales in the third and fourth quarter
of fiscal year 2001,  resulting in overall  sales of $6.8 million in 2001.  This
compares  to sales of $1.6  million  for the period  January  27,  2000 (date of
purchase)  through  May 31,  2000.  Demand for the  services  provided by Phazar
Aerocorp Inc.  slowed  during the fourth  quarter and this resulted in an ending
backlog of firm orders at year-end of $1.2 million, down 43% from the prior year
end backlog of $2.1  million.  The gross profit  margin for fiscal year 2001 was
18%. Sales and  administrative  expenses as a ratio to sales were 10%.  Interest
expense for Phazar Aerocorp Inc. totaled $166,219 in 2001.  Phazar Aerocorp Inc.
experienced  a pre-tax  profit of  $274,004  in 2001.  Phazar  Aerocorp  Inc. is
expected to be profitable in 2002.

PHAZAR CORP  consolidated  sales from  operations were $15.1 million with income
from operations  before taxes of $335,766 in 2001. This compares to $7.9 million
in  consolidated  sales with a loss from  operations  before taxes of $99,787 in
2000. The net income for 2001 was $162,175  compared to a net loss of $84,769 in
2000.  PHAZAR  CORP's  profit  resulted  from the  improved  volumes  at Antenna
Products  Corporation  and Phazar  Aerocorp  Inc.  PHAZAR CORP is expected to be
profitable in 2002.

Liquidity and Capital Resources
-------------------------------
Funds  generated  from  company  operations  are the major  internal  sources of
liquidity  and  are   supplemented  by  funds  derived  from  capital   markets,
principally  bank  facilities.  PHAZAR CORP has a $3.0 million  revolving demand
line of credit that is  partially  guaranteed  by a principal  shareholder.  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 Antenna
Products  Corporation  to maintain  $1.5  million in tangible net worth and $1.0
million of working capital.  At May 31, 2001 Antenna Products  Corporation had a
tangible net worth of $2,016,652 and working capital of $2,715,290. As of August
10, 2001 Antenna  Products  Corporation  and Phazar Aerocorp Inc. had drawn $605
thousand of the $3.0 million  line of credit with $1.3 million of the  borrowing
base available and unused.  The revolving  credit line agreement is renewable in
September  2001.  PHAZAR  CORP  anticipates  renewal of this credit line and has
projected  that the credit  available  is  sufficient  to cover the  operational
requirements of the subsidiaries in 2002.


                                       10
<PAGE>
Net cash flow from  operations  was a positive  $1,458,599 in 2001 compared to a
positive $204,298 in 2000.  Inventory  decreased $555,920 in 2001 compared to an
increase of $188,186 in 2000. Accounts payable and accrued liabilities increased
$6,205 and accounts  receivable  decreased  $386,822 in 2001.  In 2000  accounts
payable and accrued  liabilities  increased  $280,080  and  accounts  receivable
increased  $261,737.  Cash  flow  used  in  financing  activities  in  2001  was
$1,359,734  compared to net cash provided by financing  activities of $1,905,040
in 2000. Cash and cash equivalents at the end of 2001 were $341,413, an increase
from $337,348 at the end of the prior year.

Antenna  Products  Corporation  has a  long-term  bank  note  for  $1.2  million
collateralized  by  the  Antenna  Products  Corporation  plant,   property,  and
equipment.  The current balance is $810 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.

Antenna  Products  Corporation  also  has an  $800,000  subordinated  note  to a
principal shareholder on which it pays interest only at the prime interest rate.
The commencement of principal  payments on the  subordinated  note is prohibited
under the terms of the bank note until the bank debt is paid in full.

Phazar Aerocorp Inc. has a note payable to a bank for $1.75 million,  payable in
installments  of $28,724 per month until the maturity  date of January 26, 2007,
when the remaining balance is due, including interest at the prime rate plus 1%.
The current balance of the note is $1.51 million.  The note is collateralized by
Phazar  Aerocorp Inc.  equipment and guaranteed by PHAZAR CORP,  guaranteed by a
principal  shareholder,  and  otherwise  secured by a pledge of assets of PHAZAR
CORP subsidiaries.

PHAZAR CORP does not expect any changes in payments or other  provisions  of the
loan agreements now in place.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  consolidated  financial  statements  listed in Item 14 are included in this
report on pages F-1 through F-18.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.
                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

This information will be included in the definitive Proxy Statement dated August
27, 2001 filed with the Securities and Exchange  Commission and is  incorporated
herein by reference.


                                       11
<PAGE>
Item 11.  EXECUTIVE COMPENSATION

This  information  will be included in the Company's  definitive Proxy Statement
dated August 27, 2001 filed with the Securities  and Exchange  Commission and is
incorporated herein by reference.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

This  information  will be included in the Company's  definitive Proxy Statement
dated August 27, 2001 filed with the Securities  and Exchange  Commission and is
incorporated herein by reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This  information  will be included in the Company's  definitive Proxy Statement
dated August 27, 2001 filed with the Securities  and Exchange  Commission and is
incorporated herein by reference.

                                     PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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

         1.      Financial Statements.  The following consolidated financial
                 statements of Antenna Products, Inc. and subsidiaries and
                 independent auditors' reports are presented on pages
                 F-1 through F-18:

                 Independent Auditor's Report

                 Consolidated Balance Sheets - May 31, 2001 and 2000

                 Consolidated Statements of Operations - Years Ended
                 May 31, 2001 and 2000

                 Consolidated Statement of Shareholders' Equity - Years Ended
                 May 31, 2001 and 2000

                 Consolidated Statements of Cash Flows - Years Ended
                 May 31, 2001 and 2000

                 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.




                                       12
<PAGE>
         3.      Exhibits.
                 --------

                 None

   (b)   Reports on Form 8-K.

                  On June  6,  2000  the  registrant  filed  a Form  8-K for the
                  purpose of disclosing the May 31, 2000  resignation of William
                  Poulin as a Director of Antenna  Products,  Inc.  and from all
                  offices in Antenna  Products,  Inc and its'  subsidiaries.  On
                  June 1, 2000 the Board of Directors of Antenna Products,  Inc.
                  adopted a resolution  electing  Gary W.  Havener  President of
                  Antenna Products, Inc.

                                   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:  August 27, 2001

                                 PHAZAR CORP

                                       /s/Gary W. Havener
                                       -------------------------------
                                 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
---------                    -----                              ----

/s/Clark D. Wraight          Principal Financial Officer        August 27, 2001
-------------------
Clark D. Wraight             and Director


/s/James Miles               Director                           August 27, 2001
-------------------
James Miles

/s/James W. Kenney           Director                           August 27, 2001
-------------------
James Kenney

/s/R. A. Wahl                Director                           August 27, 2001
-------------------
R. Allen Wahl

/s/B. J. Perry               Director                           August 27, 2001
-------------------
Billy J. Perry
                                       13
<PAGE>




















                                   PHAZAR CORP
                          (fka Antenna Products, Inc.)

                             CONSOLIDATED FINANCIAL
                                   STATEMENTS

                                  MAY 31, 2001




























                                       i
<PAGE>


                                 C O N T E N T S



                                                                      Page


INDEPENDENT AUDITOR'S REPORT...........................................F1


CONSOLIDATED FINANCIAL STATEMENTS

     Consolidated Balance Sheets.......................................F2,F3

     Consolidated Statements of Operations.............................F4

     Consolidated Statements of Shareholders' Equity...................F5

     Consolidated Statements of Cash Flows.............................F6,F7

     Notes to Consolidated Financial Statements........................F8-F18

































                                       ii
<PAGE>





                          INDEPENDENT AUDITOR'S REPORT


To The Board of Directors and Stockholders
PHAZAR CORP and Subsidiaries

We have audited the accompanying consolidated balance sheets of PHAZAR CORP (fka
Antenna  Products,  Inc.) and  Subsidiaries as of May 31, 2001 and 2000, and the
related  consolidated  statements of operations,  shareholders'  equity and cash
flows for the years then ended. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of PHAZAR CORP and
subsidiaries  as of May 31, 2001 and 2000,  and the results of their  operations
and their cash flows for the years then ended,  in  conformity  with  accounting
principles generally accepted in the United States of America.



WEAVER AND TIDWELL, L.L.P.

Fort Worth, Texas
July 31, 2001

















                                      F-1
<PAGE>
            PHAZAR CORP (fka ANTENNA PRODUCTS, INC.) AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                              MAY 31, 2001 AND 2000

                                                  2001                2000
                                            -----------------   ---------------
                                 ASSETS
CURRENT ASSETS
  Cash and cash equivalents                 $      341,413       $     337,348
  Accounts receivable:
     Trade, net of allowances for
       doubtful accounts of
       $45,898 and $7,021 in 2001
       and 2000, respectively                    1,074,572           1,342,733
     United States Government                       88,620             207,281
  Inventories                                    2,270,438           2,826,358
  Costs and estimated earnings in excess
       of billings on refurbishing
       contracts in progress                       370,454             293,161
  Prepaid expenses and other assets                 33,340              55,872
  Income taxes receivable                                -              30,000
  Deferred income taxes                            128,343              69,528
                                            --------------       -------------
           Total current assets                  4,307,180           5,162,281

  Property and equipment, net                    2,165,288           2,435,624
  Intangible assets (Goodwill)                     498,440             534,912
  Identifiable intangible assets                 1,483,241           1,629,437
                                            --------------       -------------
  TOTAL ASSETS                              $    8,454,149       $   9,762,254
                                            --------------       -------------

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




















                                       F-2

<PAGE>
      LIABILITIES AND SHAREHOLDERS' EQUITY             2001             2000
                                                  --------------- -------------
CURRENT LIABILITIES
  Notes payable                                    $     250,000  $   1,365,000
  Current portion of long-term debt                      266,856        238,588
  Accounts payable                                       438,262        468,586
  Accrued expenses                                       418,919        382,390
  Billings in excess of costs and estimated
    earnings on refurbishing contracts in progress        52,907        320,689
  Income taxes payable                                   108,146              -
                                                   -------------  -------------
           Total current liabilities                   1,535,090      2,775,253

  Long-term debt                                       2,051,385      2,324,387
  Note payable to shareholder                            800,000        800,000
  Deferred income taxes                                  238,581        287,338
                                                   -------------  -------------
                                                       3,089,966      3,411,725
                                                   -------------  -------------
           Total liabilities                           4,625,056      6,186,978

COMMITMENTS AND CONTINGENCIES                                  -              -

MINORITY INTEREST IN SUBSIDIARY                           25,546              -

SHAREHOLDERS' EQUITY
  Commonstock, $0.01 par, 8,000,000 shares
    authorized,  2,169,328 shares and
    2,135,728 shares issued and outstanding
    in 2001 and 2000, respectively                        21,694         21,358
  Additional paid-in capital                           2,744,526      2,678,766
  Retained earnings                                    1,037,327        875,152
                                                   -------------  -------------
           Total shareholders' equity                  3,803,547      3,575,276
                                                   -------------  -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $   8,454,149  $   9,762,254
                                                   =============  =============
The Notes to Consolidated Financial Statements
  are an integral part of these statements.
















                                       F-3
<PAGE>
            PHAZAR CORP (fka ANTENNA PRODUCTS, INC.) AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       YEARS ENDED MAY 31, 2001 AND 2000

                                                    2001              2000
                                             ----------------- -----------------
Sales and contract revenues                     $  15,060,237   $     7,861,707
Cost of sales and contracts                        10,889,852         6,001,637
                                                -------------   ---------------
   Gross profit                                     4,170,385         1,860,070

Sales and administrative expenses                   3,443,836         1,695,521
                                                -------------   ---------------
   Operating profit                                   726,549           164,549

Other income (expense)
    Interest expense                            (     401,723)  (       282,571)
    Interest income                                       333               235
    Other                                              10,607            18,000
                                                -------------   ---------------
   Total other expense                          (     390,783)  (       264,336)
                                                -------------   ---------------
Income (loss) from operations before
  income taxes and minority interest                  335,766   (        99,787)

Income tax provision (benefit)                        148,045   (        14,818)
                                                -------------   ---------------
    Income (loss) before minority interest            187,721   (        84,969)

Minority interest in subsidiary's (Income) loss (      25,546)              200
                                                -------------   ---------------
Net income (loss)                               $     162,175   ($       84,769)
                                                =============   ===============
Earnings (loss) per common share                $        0.08   ($         0.04)
                                                =============   ===============
The Notes to Consolidated Financial Statements
  are an integral part of these statements.
















                                       F-4
<PAGE>
             PHAZAR CORP (fka ANTENNA PRODUCTS,INC.)AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        YEARS ENDED MAY 31, 2001 AND 2000

<TABLE>
<S>                           <C>        <C>         <C>          <C>          <C>
                             Common Stock
                             ---------------------   Additional
                               Number                 Paid In       Retained
                              of Shares   Amount      Capital       Earnings      Total
                              ---------  ----------  -----------  -----------  -------------
 BALANCE, MAY 31, 1999        1,862,928  $   18,630  $ 1,995,951  $   959,921  $   2,974,502
   Issuance of common stock     272,800       2,728      682,815            -        685,543

   Net loss                           -           -            -  (    84,769) (      84,769)
                              ---------  ----------  -----------  -----------  -------------
  BALANCE, MAY 31, 2000       2,135,728      21,358    2,678,766      875,152      3,575,276

   Issuance of common stock      33,600         336       65,760            -         66,096

   Net income                         -           -            -      162,175        162,175
                              ---------  ----------  -----------  -----------  -------------
BALANCE, MAY 31, 2001         2,169,328  $   21,694  $ 2,744,526  $ 1,037,327  $   3,803,547
                              =========  ==========  ===========  ===========  =============
</TABLE>

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


























                                       F-5
<PAGE>
            PHAZAR CORP (fka ANTENNA PRODUCTS, INC.) AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        YEARS ENDED MAY 31, 2001 AND 2000

                                                       2001             2000
                                                   --------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                 $ 162,175       ($   84,769)

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

   Depreciation                                       340,136           297,840
   Amortization                                       267,669            44,313
   Stock based compensation                             6,096                 -
   Deferred federal income tax                      ( 107,573)      (    14,818)
   Changes in assets and liabilities:
   Accounts receivable                                386,822       (   261,737)
   Costs and estimated earnings in excess of
    billings on refurbishing contracts in progress  (  77,293)      (   293,161)
   Inventory                                          555,920       (   188,186)
   Prepaid expenses                                    22,532       (    22,504)
   Income taxes receivable                             30,000           126,551
   Accounts payable                                 (  30,324)          221,179
   Accrued expenses                                    36,529            58,901
   Billings in excess of costs and estimated
    earnings on refurbishing contracts in progress  ( 267,782)          320,689
   Income taxes payable                               108,146                 -
   Minority interest                                   25,546                 -
                                                    ---------       -----------
     Net cash provided by operating activities      1,458,599           204,298
                                                    ---------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                (  69,800)      (   198,096)
  Purchase of intangible assets                     (  25,000)      ( 1,844,069)
                                                    ---------       -----------
     Net cash used in investing activities          (  94,800)      ( 2,042,165)

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














                                       F-6
<PAGE>
            PHAZAR CORP (fka ANTENNA PRODUCTS, INC.)AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        YEARS ENDED MAY 31, 2001 AND 2000

                                                           2001          2000
                                                       -----------   ----------
CASH FLOWS FROM FINANCING ACTIVIITES
 Net borrowings (payments) under bank lines of credit   (1,115,000)      65,000
 Proceeds on borrowings of long-term debt                        -    1,750,000
 Principal payments on long-term debt                     (244,734)     (82,460)
 Issuance of common stock                                        -      172,500
                                                       -----------   ----------
     Net cash (used in)
         provided by financing activities               (1,359,734)   1,905,040
                                                       -----------   ----------
     Net increase in cash and cash equivalents               4,065       67,173

CASH AND CASH EQUIVALENTS, beginning of year               337,348      270,175
                                                       -----------   ----------
CASH AND CASH EQUIVALENTS, end of year                 $   341,413   $  337,348
                                                       ===========   ==========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
  Cash paid during the period for:

   Interest (none capitalized)                         $   401,444   $  282,751
                                                       ===========   ==========
   Income taxes                                        $   100,000   $        -
                                                       ===========   ==========
SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
 Issuance of common stock in exchange
   for equipment and intangible assets                 $         -   $  513,043
                                                       ===========   ==========
 Stock based compensation                              $     6,096   $        -
                                                       ===========   ==========
 Issuance of common stock in
   exchange for noncompete agreements                  $    60,000   $        -
                                                       ===========   ==========
The Notes to Consolidated Financial Statements
  are an integral part of these statements.














                                       F-7
<PAGE>
NOTE 1.  BUSINESS AND NATURE OF OPERATION

     PHAZAR  CORP   operates  as  a  holding   company  with  Antenna   Products
     Corporation,  Phazar  Antenna  Corp.  and Thirco,  Inc. as its wholly owned
     subsidiaries,  and Phazar Aerocorp,  Inc. (fka API Acquisition Corp) an 80%
     owned subsidiary.  Antenna Products  Corporation is an operating subsidiary
     that  designs,  manufactures  and  markets  antenna  systems,  towers,  and
     communication  accessories  worldwide.  The U. S. 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.  Phazar  Aerocorp,  Inc. was formed  during the year
     ended May 31, 2000, and its operations  consist primarily of contracting to
     refurbish the  interiors of corporate  and private jets.  The length of the
     contracts  varies  but is  typically  less  than one  year.  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:
                                                       2001            2000
                                                       ----            ----
         Federal Government                             8%              18%
         AIRSYS ATM, Inc.                              10%              14%
         Gulfstream Aerospace, LP                       9%               -

     At May 31, 2001 and 2000,  trade  receivables  from four and two  customers
     comprised approximately 55% and 51%, respectively,  of the trade receivable
     balance at those dates.

NOTE 2.  BUSINESS SEGMENTS

     The  Company's  operations  are  classified  into  two  principal  business
     segments based upon the nature of products and services.

     Antennas             Design, manufacture  and marketing of antenna systems,
                          towers, and communications accessories worldwide.

     Aircraft  Interiors  Contracts to refurbish  the interiors of corporate and
                          private jets.

     Following is a summary of segmented information for 2001:

                                                           Aircraft
                                               Antennas    Interiors     Total
                                               --------    ---------   --------
         Revenues from external customers    $8,302,411   $6,757,826 $15,060,237
         Foreign sales                          938,251            -     938,251
         Interest revenue                           333            -         333
         Interest expense                       235,504      166,219     401,723
         Depreciation and amortization          388,171      219,633     607,804
         Income tax provision                    48,074      104,675     152,749
         Segment profit                          89,646      274,004     363,650
         Segment assets                       5,340,760    2,437,501   7,778,461
         Expenditures for segment assets         62,300            -      62,300


                                       F-8
<PAGE>
NOTE 2.  BUSINESS SEGMENTS - continued

         RECONCILIATIONS:
            REVENUES
              Total revenues for reportable segments                $15,060,237
              Other revenue                                                   -
                                                                    -----------
              Total consolidated revenues                           $15,060,237
                                                                    ===========
            PROFIT OR LOSS
              Total profit for reportable segments                     $363,650
              Other loss                                                (27,884)
                                                                    -----------
              Profit before income taxes                               $335,766
                                                                    ===========
            ASSETS
              Total assets for reportable segments                   $7,778,461
              Other assets                                              675,688
                                                                    -----------
              Consolidated total                                     $8,454,149
                                                                    ===========
     Following is a summary of segmented information for 2000:

                                                         Aircraft
                                              Antennas   Interiors     Total
                                              ---------- ----------  ----------
         Revenues from external customers    $6,304,222  $1,557,485  $7,861,707
         Foreign sales                          981,505           -     981,505
         Interest revenue                           235           -         235
         Interest expense                       225,402      57,169     282,571
         Depreciation and amortization          287,045      55,108     342,153
         Income tax provision (benefit)           7,128     (21,946)    (14,818)
         Segment profit (loss)                   79,303     (64,546)     14,757
         Segment assets                       7,248,316   2,409,689   9,658,005
         Expenditures for segment assets        148,450   2,042,165   2,555,208

         RECONCILIATIONS:
            REVENUES
              Total revenues for reportable segments                 $7,861,707
              Other revenue                                                   -
                                                                     ----------
              Total consolidated revenues                            $7,861,707
                                                                     ==========
            PROFIT OR LOSS
              Total profit for reportable segments                   $   14,757
              Other loss                                               (114,544)
                                                                     ----------
              Loss before income taxes                               ($  99,787)
                                                                     ==========
            ASSETS
              Total assets for reportable segments                   $9,658,005
              Other assets                                              104,249
                                                                     ----------
              Consolidated total                                     $9,762,254
                                                                     ==========

                                       F-9
<PAGE>
NOTE 2.  BUSINESS SEGMENTS - continued

     Adjustments to reconcile total segment to total consolidated  profit (loss)
     before taxes and total assets is  attributable  to corporate  headquarters,
     which is not  included  in  segment  information.  Corporate  headquarters'
     activity is recorded on PHAZAR CORP and consists primarily of non-allocated
     general and administrative overhead costs and cash in bank.

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,  monopoles,  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  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, self supported
         towers and monopoles.

         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  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.


                                      F-10
<PAGE>
NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

         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
         as the cost of earned  revenue  the costs  allocable  to the  delivered
         units, 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.

     Accounting Basis for Revenue Recognition - Aircraft Interiors

         Revenue  on  contracts  is  recognized  on the  basis of the  Company's
         estimates of the percentage of completion of individual contracts. That
         portion of the total  contract  price that is  recognized as revenue is
         based upon net contract costs incurred as a percentage of net estimated
         costs. That method is used because  management  considers total cost to
         be the best available measure of progress on the contracts.

         Contract  costs  include all direct  material and labor costs and those
         indirect costs related to contract performance, such as indirect labor,
         supplies,  tools,  and repairs.  General and  administrative  costs are
         charged to expense as  incurred.  Provisions  for  estimated  losses on
         contracts  in progress  are made in the period in which such losses are
         determined.  Changes in job performance,  job conditions, and estimated
         profitability  may result in revisions  to costs and income,  which are
         recognized in the period in which the revisions are determined. Changes
         in estimated job  profitability  resulting  from job  performance,  job
         conditions,  contract penalty  provisions,  claims,  change orders, and
         settlements,  are  accounted for as changes in estimates in the current
         period.

     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 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.


                                      F-11
<PAGE>
     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,  2001 and 2000  were  approximately  $275,000  and
         $205,000, 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.

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



                                      F-12
<PAGE>
     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
         2,153,028  and  1,919,620  for the years  ended May 31,  2001 and 2000,
         respectively.  No dilutive  securities  exist in the Company's  capital
         structure.

  New Accounting Pronouncements

         In June 2001 the  Financial  Accounting  Standards  Board (FASB) issued
         Financial Accounting Standards (SFAS) No. 141 "Business  Combinations".
         This statement will require all business combinations,  under the scope
         of this  Statement,  to be accounted for using only the purchase method
         of accounting.  This pronouncement applies to all business combinations
         initiated  after June 30, 2001 and will have no effect on the Company's
         current financial statement presentation.

         In addition,  FASB issued SFAS No. 142 "Goodwill  and Other  Intangible
         Assets".  This Statement addresses  financial  accounting and reporting
         for acquired  goodwill and other  intangible  assets and also addresses
         how goodwill and other intangible  assets should be accounted for after
         they have been initially  recognized.  Goodwill and  intangible  assets
         that have  indefinite  useful  lives  will no longer be  amortized  but
         rather will be tested at least  annually for impairment by comparing to
         fair value.  The  provisions of the statement  will be required for the
         fiscal year beginning June 1, 2001.  Implementation of these provisions
         may have an impact on the carrying value of the Company's  goodwill and
         intangible  assets upon  adoption.  However,  it is not  practicable to
         determine those effects at this time.

NOTE 4.  AIRCRAFT INTERIORS CONTRACTS RECEIVABLE

     Included in accounts  receivable  at May 31,  2001and  2000,  are  aircraft
     interior contracts receivable of $222,357 and $50,599, respectively. At May
     31, 2000 this balance consisted entirely of completed contracts, however at
     May 31, 2001 $144,040 of this balance pertains to contracts in progress.

NOTE 5.  AIRCRAFT INTERIORS CONTRACTS IN PROGRESS

     Information with respect to aircraft interior  contracts in progress at May
31, 2001 follows:

                                                       2001               2000
                                                  ------------   ---------------
         Cost incurred on contracts in progress  $   6,291,703      $   754,663
         Estimated earnings thereon                  1,504,170          282,586
                                                 -------------      -----------
                                                     7,795,873        1,037,249
         Less billings applicable thereto            7,478,326      ( 1,064,777)
                                                 -------------      -----------
         Net unbilled  (overbilled) costs        $     317,547      $(   27,528)
                                                 =============      ===========

                                      F-12
<PAGE>
NOTE 5.  AIRCRAFT INTERIORS CONTRACTS IN PROGRESS-continued

     These  amounts are  included in the  accompanying  balance  sheet under the
     following captions:

                                                            2001           2000
                                                    ------------   ------------
         Costs and estimated earnings in excess
           of billings on contracts in  progress    $    370,454     $  293,161
         Billings in excess of costs and estimated
           earnings on contracts in progress             (52,907)      (320,689)
                                                    ------------     ----------
         Net unbilled (overbilled) costs            $    317,547     $ ( 27,528)
                                                    ============     ==========

NOTE 6.  INVENTORIES

     The major components of inventories are as follows:
                                                            2001           2000
                                                    ------------     ----------
         Raw materials                              $    360,284     $  399,796
         Work in process                               1,297,008      1,730,276
         Finished goods                                  613,146        696,286
                                                    ------------     ----------
                                                      $2,270,438     $2,826,358
                                                    ------------     ----------

     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, 2001 and 2000 were  $864,001  and
     $988,405, respectively.

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

NOTE 7.  PROPERTY AND EQUIPMENT

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

                                      Estimated
                                    Useful Life        2001          2000
                                    -----------    ------------    -----------

      Land                                          $   375,136    $   375,136
      Buildings and improvements    15-30 years       1,873,217      1,873,217
      Machinery and equipment          10 years       3,280,719      3,226,999
      Automobiles and trucks            3 years         158,718        151,217
      Office furniture and fixtures    10 years         590,438        586,788
                                                    -----------    -----------
                                                      6,278,228      6,213,357
      Less accumulated depreciation                   4,112,940      3,777,733
                                                    -----------    -----------
      Net property and equipment                     $2,165,288    $ 2,435,624
                                                     ==========    ===========

                                      F-13
<PAGE>
NOTE 8.  INTANGIBLE ASSETS

Included in intangible assets at May 31, 2001 is the following:
                                                        2001            2000
                                                 -------------    -------------
    Goodwill (Phazar Aerocorp Inc.)                $   547,069      $   547,069
    Drawings, wiring diagrams, test procedures,
    production records, etc. (Phazar Aerocorp Inc.)  1,222,000        1,222,000
    Non-compete agreement (Phazar Aerocorp Inc.)        75,000           75,000
    Non-compete agreements (Phazar Antenna Corp.)       60,000                -
    Patents, copyrights and other
      intellectual property (Phazar Antenna Corp.)     389,593          364,593
                                                   -----------      -----------
                                                     2,293,662        2,208,662
    Accumulated amortization                      (    311,981)     (    44,313)
                                                  ------------      -----------
                                                  $  1,981,681      $ 2,164,349
                                                  ============      ===========

     Goodwill is being amortized on the straight-line  basis over a fifteen-year
     period.  Drawings,  wiring diagrams,  test procedures,  production records,
     etc. are being amortized on the straight-line basis over a ten-year period.
     Patents,  copyrights and other  intellectual  property and the  non-compete
     agreements are being  amortized on the  straight-line  basis over a five to
     six year period.

NOTE 9.  NOTES PAYABLE

     At May 31, 2001 and 2000, notes payable consist of a revolving note payable
     to a bank, with a maximum amount not to exceed the lesser of $3,000,000, 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.

     Interest is payable  monthly at the prime rate (7% and 9.5% at May 31, 2001
     and 2000,  respectively)  plus 1% until September 30, 2001, when any unpaid
     principal and interest  shall be due.  Borrowings  under the revolving note
     payable are  collateralized by accounts  receivable and inventories and are
     guaranteed by a principal  shareholder.  Under the  agreement,  the Company
     must  maintain  minimum  net worth of  $1,500,000  and  working  capital of
     $1,000,000.

     At May  31,  2001  and  2000,  note  payable  to  shareholder  consists  of
     subordinated note to a principal shareholder of the company. In the initial
     years,  only  interest  at the prime rate (7% and 9.5% at May 31,  2001 and
     2000,  respectively) is payable,  with monthly principal payments scheduled
     to begin in June  2002,  and  maturing  in May 2007.  Interest  charged  to
     operations  under the note was  $71,627 and $67,835 for the years ended May
     31, 2001 and 2000, respectively.

NOTE 10.  LONG-TERM DEBT

     At May 31, 2001 and 2000, long-term debt consists of the following:

<PAGE>
NOTE 10.  LONG-TERM DEBT - continued
                                                        2001           2000
                                                    -----------   --------------

      Mortgage note to a bank, guaranteed 80% by a
      U.S. government agency,  payable $10,050 per
      month,  including interest at the prime rate
      (7%  and  9.5%  at May 31,  2001  and  2000,
      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 in working capital and
      a ratio  of  maximum  debt to net  worth  of
      seven to one.                                    $    809,848 $   853,586

      Note   payable   to  a  bank,   payable   in
      installments  of  $28,724  per  month  until
      maturity  date of  January  26,  2007,  when
      remaining balance is due, including interest
      at the  prime  rate  (7% and 9.5% at May 31,
      2001  and  2000,   respectively)   plus  1%,
      secured by property and equipment.  The note
      is   also    guaranteed   by   a   principal
      shareholder.                                     $  1,508,393   1,691,458


      Loan to credit institution,  due on February
      11, 2004,  payable  monthly  installments of
      $495, including interest at 10.75%,  secured
      by a utility vehicle.                                       -      17,931


      Less current portion of long-term debt                266,856     238,588
                                                       ------------ -----------
                                                       $  2,051,385 $ 2,324,387
                                                       ============ ===========

     Maturities of long-term  debt for each of the five years  subsequent to May
     31, 2001 are as follows (including $160,000 per year beginning in June 2002
     for the shareholder  note,  although it is subordinated to the note payable
     to a bank):

         2002                                                        $  266,856
         2003                                                           428,213
         2004                                                           464,817
         2005                                                           504,578
         2006                                                           547,767
         Thereafter                                                     906,010
                                                                        -------
                                                                   $  3,118,241
                                                                   ============
                                      F-14
<PAGE>
NOTE 11.  INCOME TAXES

   Components of the income tax provision (benefit) are as follows:
                                                        2001           2000
                                                   ------------- --------------
     Federal Income taxes (benefit) at statutory
        rate on income before income taxes           $  114,161  ($     33,928)

     State income taxes statutory rate                   17,471              -

     Non-deductible expenses and other                   16,413         19,110
                                                     ----------  -------------
     Total provision                                 $  148,045  ($     14,818)
                                                     ==========  =============
     Deferred portion (benefit) of provision           (107,573) ($     14,818)
     Current portion (benefit)                          255,618              -
                                                     ----------  -------------
     Total provision (benefit)                       $  148,045  ($     14,818)
                                                     ==========  =============
   The tax  effects  of  temporary  differences  that give  rise to  significant
   portions  of the  deferred  tax  assets  and  deferred  tax  liabilities  are
   presented below:
                                                      2001              2000
                                                   -----------   --------------
     Deferred tax assets:
           Accounts receivable due to
               allowance for doubtful accounts     $    15,605    $      2,387

           Inventories, due to estimated
               losses on contracts                      34,000          17,000

           Accrued expenses, due to warranty accrual    48,456          25,500

           Accrued expenses, due to vacation accrual    30,282          20,780

           Intangible assets, due to difference in
               amortization                             40,425             444

           Net operating loss carryforward                   -           3,861
                                                   -----------    ------------
           Total deferred tax assets                   168,768          69,972

     Deferred tax liabilities:

           Property and equipment, principally
               due to difference in depreciation     ( 279,006)   (    287,782)
                                                   -----------    ------------
           Total deferred tax liability               (279,006)   (    287,782)
                                                   ===========    ============
           Net deferred tax liability              (  $110,238)   ($   217,810)
                                                   ===========    ============
     The net deferred tax liabilities are classified
               on the balance sheet as follows:
           Current deferred tax assets             $   128,343    $     69,528
           Long-term deferred tax liabilities      (   238,581)      ( 287,338)
                                                   -----------    ------------
                                                   ($  110,238)   $  ( 217,810)
                                                   ===========    ============
                                      F-15
<PAGE>
NOTE 12.  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 $-0- for
     both years ended May 31, 2001 and 2000.

     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 US  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, 2001.

         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 a building  and  software  under two  noncancelable
         operating lease arrangements. Rent expense under these lease agreements
         during the years ended May 31, 2001 and May 31, 2000 was $45,505 and $0
         respectively.   Future  minimum  lease   obligations  under  the  lease
         agreement are as follows:


                                      F-16
<PAGE>
NOTE 12.  COMMITMENTS AND CONTINGENCIES - continued

                  2002                                             $   77,732
                  2003                                             $   77,265
                  2004                                             $   67,537
                  2005                                             $   29,264
                                                                   ==========
                                                                   $  249,798

         The building lease  agreement  contains two options to extend the lease
         for additional terms of one year each at an increased base rent.

NOTE 13.  STOCK OPTIONS

     In October  1999,  the Board of  Directors  approved two stock option plans
     that  provided the option to purchase  40,000  shares and 60,000  shares at
     $1.3125 and $2.00,  respectively,  to an officer of the Company.  The plans
     had  expiration  dates of October 25, 1999 and the earlier of the officer's
     last day of employment or May 31, 2000, respectively. The officer exercised
     all of the options and was issued 100,000 shares of common stock during the
     year ended May 31, 2000. No compensation  has been recognized in operations
     as of May 31, 2000.  Had  compensation  cost for the Company's  stock-based
     compensation  been  determined  based on fair  value at the grant  date for
     awards under the plan consistent with the method of FASB Statement 123, the
     Company would have recognized total  compensation of $7,000 under the stock
     based employee compensation awards during the year ended May 31, 2000.

     During the year ended May 31, 2001 the Board of Directors  granted  428,000
     stock options to six  employees.  The options  become  exercisable in equal
     increments on the anniversary of the grant date over each of the next three
     years. None of these options were exercisable  during the year. The Company
     recognized  no  compensation  cost  related  to the grant of these  options
     during the year ended May 31, 2001. Had compensation cost for the Company's
     stock-based  compensation  been determined based on fair value at the grant
     date  consistent  with the method of FASB  Statement 123, the Company would
     have  recognized  compensation  expense  of  $194,662  for the  stock-based
     employee compensation awards during the year ended May 31, 2001.

     The  Company's  net income and  earnings  per share as of May 31,  2001 and
     2000, would have been reduced to the pro forma amounts indicated below:

                                                       2001          2000
                                                   ------------  --------------

         Net income (loss)            As reported      $162,175    ($   84,769)
                                      Pro forma       ($ 32,487)   ($   89,455)

         Primary earnings (loss)
           per share                  As reported          0.08    (      0.04)
                                      Pro forma       (    0.02)   (      0.05)

     The compensation cost was estimated using the Black-Scholes  model with the
     following  assumptions for 2001:  $2.50 to $1.88 stock price at grant date;
     life of 4 years;  expected volatility of 93 percent; and risk free interest
     rates of 6.6 and 7.8 percent.

                                      F-17
<PAGE>
NOTE 13.  STOCK OPTIONS-continued

     The assumptions used under the 2000 plan were as follows: $1.19 stock price
     at grant date; lives of 13 and 125 days; expected volatility of 98 percent;
     and risk free interest rate of 4.45 and 4.84 percent.

     A summary of the status of the  Company's  stock option plans as of May 31,
     2001 and 2000 and changes for the years then ended are as follows:

                                                                    Weighted
                                                                     Average
                                                                    Exercise
                                                 Shares               Price
                                               ---------          ------------
         Outstanding at May 31, 1999              60,000                2.00
                  Granted                        100,000                1.73
                  Exercised                      100,000                1.73
                  Forfeited                            -                   -
                                             -----------         -----------
         Outstanding at May 31, 2000              60,000                2.00
                  Granted                        428,000                2.18
                  Exercised                            -                   -
                  Forfeited                            -                   -
                                             -----------         -----------
         Outstanding at May 31, 2001             488,000                2.15
                                             ===========         ===========


                                                  2001                  2000
                                              ----------           -----------
         Exercisable at May 31                    60,000                60,000
                                                ========             =========
         Weighted average fair value of
              options granted during the year $     1.38         $         .07
                                              ==========         =============
         Weighted averaged remaining
           contractual life (in years)
           2001, 2000 plans respectively             6.4                   4.8

NOTE 14.  ACQUISITIONS

     On January  27,  2000,  Phazar  Aerocorp  Inc (fka API  Acquisition  Corp.)
     purchased  the  assets and  business  of The  Upholstery  Shop,  Inc.!  for
     $2,000,000.  The Upholstery Shop, Inc.! provides complete refurbishment for
     a full range of corporate and executive aircraft interior.  The acquisition
     was  recorded  using the  purchase  method of  accounting.  The  results of
     operations of The Upholstery  Shop, Inc.! from January 27, 2000 through May
     31, 2000 were included in the Company's consolidated statement of income.

     On May 1, 2000,  the Company  acquired the Phazar  Antenna  Business  Unit,
     which  included  inventory,   equipment,   patents,  copyrights  and  other
     intellectual  property,  from BAE Systems  Aerospace  Inc. in exchange  for
     $360,000 and 172,800  shares of common  stock,  the fair value of which was
     $513,043 on that date.


                                      F-18