##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended:
    September 29, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number 1-4817
  
  WHITE ELECTRONIC DESIGNS
    CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Indiana(State or other jurisdiction
    of 
    incorporation or organization)

35-0905052(I.R.S. Employer 
    Identification No.)3601 E. University Drive
    Phoenix, Arizona(Address of principal
    executive offices)

85034(Zip
    Code)   Registrants telephone number, including area code:
    (602) 437-1520
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, stated value $.10 per share

NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act: None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





TABLE OF
    CONTENTS
  NOTE REGARDING FORWARD-LOOKING STATEMENTS AND
    ASSOCIATED RISKS


3PART I


4ITEM 1


BUSINESS


4ITEM 1A


RISK FACTORS


11ITEM 1B


UNRESOLVED STAFF COMMENTS


20ITEM 2


PROPERTIES


20ITEM 3


LEGAL PROCEEDINGS


21ITEM 4


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


22EXECUTIVE OFFICERS OF THE REGISTRANT


22PART II


23ITEM 5


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


23ITEM 6


SELECTED CONSOLIDATED FINANCIAL DATA


25ITEM 7


MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


25ITEM 7A


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


41ITEM 8


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


41ITEM 9


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


41ITEM 9A


CONTROLS AND PROCEDURES


41ITEM 9B


OTHER INFORMATION


42PART III


43ITEM 10


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


43ITEM 11


EXECUTIVE COMPENSATION


44ITEM 12


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


44ITEM 13


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


45ITEM 14


PRINCIPAL ACCOUNTANT FEES AND SERVICES


45PART IV


45ITEM 15


EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


45SIGNATURES


48EX-10.10EX-10.19EX-10.20EX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2   2




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NOTE REGARDING
    FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
  Form 10-K (Form 10-K),
  and/or Form 10-K,
  
    the loss of one or more principal customers or delays or
    cancellations of orders due to the impact of adverse business
    conditions or price competition on one or more principle
    customers;
    the inability to procure required components and raw materials;
    any downturn in the semiconductor, electronics, home appliance,
    telecommunications or other markets in which we operate, which
    could cause a decline in selling unit prices or volume;
    reductions in military spending or changes in the acquisition
    requirements for military products;
    the inability to develop, introduce and sell new products or the
    inability to develop new manufacturing technologies;
    the failure of customers to accept our anti-tamper processing or
    the development of improved anti-tamper processing by
    competitors;
    the ability to locate appropriate acquisition candidates,
    negotiate an appropriate purchase price, and integrate into our
    business the people, operations, and products from acquired
    businesses; and
    changes or restrictions in the practices, rules and regulations
    relating to sales in international markets.  Form 10-K, Form 10-K
 3




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##### Table of Contents



PART I
  ITEM 1
    BUSINESS  GENERAL
      (602) 437-1520. www.whiteedc.com Form 10-K,
  BUSINESS
    SEGMENTS
    MICROELECTRONIC
    SEGMENT
   4




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
    significant space savings and size advantages;
    improved power and electrical performance; and
    improved component compatibility.      PRODUCT

SAMPLE APPLICATIONMilitary/Industrial:

System on a substrate



Counter-measure suite of the F-16 Fighting Falcon

Microprocessor modules



Air-to-air missiles, such as the Sidewinder AIM-9X and
    AIM-120 AMRAAM

Embedded computers used in the Apache Helicopter, Advanced
    Amphibious Assault Vehicle and the Abrams M1A2 Tank

Memory modules



Air-to-air missiles, such as the Sidewinder AIM-9X  and
    AIM-120 AMRAAM

Embedded computers used in the F-22 Raptor and Patriot PAC-3
    Missile System

Radar used in the F/A-18 Hornet

Joint Strike Fighter, F-35

European Typhoon Fighter Aircraft (EFA)

Anti-tamper technology



Various military programsCommercial:

Multi-chip package



Telephone, data, and video communications

SDRAM/DDR II memory modules



High-end servers for networking and ERP systems

Wireless CDMA base stations

Flash/SRAM memory PC card



Linear Flash PCMCIA Cards

Microelectronic system boards



Home entertainment consoles

Hotel entertainment systems

Compact Flash



Medical, embedded computing  5




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Backlog
    Competition
      DISPLAY
    SEGMENT
      
    Increased viewability (anywhere viewable); increased visibility
    in bright light conditions
    (Max-Vutm);
    Increased visibility in bright light conditions; super bright
    low reflectance
    (SBLRtm);
    Ability to withstand heavy vibration and extreme
    temperatures; and
    Wider viewing angles.   6




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PRODUCT

SAMPLE APPLICATIONMilitary/Industrial:

Mechanical components



Impulse counters, altitude counters, rounds counters, logicator
    F-16 trim panel

Super bright low reflectance technology (SBLR) &
    Max-Vutm
    technology



Ground based vehicles, such as the Abrams M1A2 Tank

Aircraft displays, such as the Apache Helicopter and the F-16
    Fighting Falcon

Cockpit instrumentation; marine navigation

Global positioning systems (GPS)Commercial:

Max-Vutm
    process technology



Mobile Personal Computers (PC), Tablet PCs

Display module assembly



Patient monitors

Optically enhanced displays



Drive-thru kiosks; medical instruments; Point-of-Service (POS)
    terminals; notebook PCs; automotive test equipment

Membrane keypads



Home appliances

Keypad modules



Hand-held barcode applications   Backlog
    Competition
     7




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SALES,
    MARKETING AND DISTRIBUTION
        PRINCIPAL
    CUSTOMERS
        FOREIGN
    OPERATIONS
    RESEARCH,
    ENGINEERING AND PRODUCT DEVELOPMENT
    
    developing new products;
    improving existing products;
    adapting existing products to new applications; and
    developing prototype components for specific programs. 8




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REGULATORY
    MATTERS
  Government
    Contracting Regulations
              Environmental
    Protection
   9




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International
    Trade Regulations
    RAW
    MATERIALS
    INTELLECTUAL
    PROPERTY
       10




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EMPLOYEES
    FINANCIAL
    INFORMATION BY GEOGRAPHIC SEGMENT
    AVAILABLE
    INFORMATION
  www.whiteedc.com Form 10-K, Form 10-Q, Form 8-K
  ITEM 1A
    RISK
    FACTORS  We are
    dependent on sales to defense-related companies for a large
    portion of our net sales and profits, and changes in military
    spending levels and patterns could negatively affect
    us.
        Our
    goodwill and intangible assets have been impaired, and may
    become impaired in the future.
   11




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We
    have made and may make other acquisitions and cannot assure you
    that any potential acquisition will be successful.
  and/or
  
    exposure to unanticipated liabilities of an acquired company;
    the potential loss of key customers or key personnel of an
    acquired company;
    the recording of goodwill and intangible assets that will be
    subject to impairment testing on a regular basis and potential
    periodic impairment charges;
    the diversion of the attention of our management team from other
    business concerns;
    the risk of entering into markets or producing products where we
    have limited or no experience, including the integration of the
    purchased technologies and products with our technologies and
    products; and
    our ability to assess, integrate and implement internal controls
    of an acquired company in accordance with Section 404 of
    the Sarbanes-Oxley Act of 2002.    Our
    customers may cancel their orders, change production quantities
    or delay production at any time, which could materially reduce
    our net sales and operating results.
    We
    have a concentrated customer base and, as a result, our net
    sales could decline significantly if we lose a major
    customer.
   12




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We
    depend on military prime contractors and commercial OEM
    customers for the sale of our products and the failure of these
    customers to achieve significant sales of products incorporating
    our components would reduce our net sales and operating
    results.
    We
    depend on the continuing trend of outsourcing by commercial OEMs
    and prime military contractors, which is subject to factors
    beyond our control.
    Our
    failure to comply with United States government laws and
    regulations would reduce our ability to be awarded future
    military business.
    We may
    have an adverse resolution of litigation which may harm our
    operating results or financial condition.
    We may
    fail to meet expectations because our net sales, gross profits
    and net income will fluctuate from period to
    period.
   13




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
    our inability to adjust expenses for any particular quarter in
    response to net sales shortfalls because a substantial component
    of our operating expenses are fixed costs;
    the cyclical nature of the markets in which we serve, in
    particular with respect to our membrane keypad business;
    any adverse changes in the mix of products and types of
    manufacturing services that we provide (i.e., high volume and
    low complexity commercial keypads have lower gross margins than
    high complexity microelectronic devices for defense contractors);
    the complexity of our manufacturing processes and the
    sensitivity of our production costs to declines in manufacturing
    yields, which make yield problems both possible and costly when
    they occur;
    expenses associated with acquisitions; and
    general economic conditions.    We
    have a lengthy sales cycle, which increases the likelihood that
    our quarterly net sales will fluctuate and which may, in turn,
    adversely affect the market price of our common
    stock.
    Our
    failure to detect unknown defects in our products could
    materially harm our relationship with customers, our reputation
    and our business.
    Our
    operating results could be seriously harmed if the markets in
    which we sell our products do not grow.
    
    defense and aerospace equipment;
    computers and computer related peripherals;
    medical electronics and equipment; 14




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
    home appliances and consumer electronics;
    industrial controls; and
    telecommunication/datacommunication equipment.    Further
    downturns in the industries in which we operate could reduce the
    value of our inventories and cause a reduction in our
    profits.
    We use
    manufacturing resources in Asia, which limits our control of the
    manufacturing process.
    
    the outsourcing contractors inability to manufacture
    products that meet our technical specifications and that have
    minimal defects;
    the outsourcing contractors inability or unwillingness to
    honor their product warranties;
    the future possibility of financial insolvency, labor concerns
    and the lack of predictability related to general business
    condition of our outsourcing contractors;
    unexpected changes in and the burdens and costs of compliance
    with a variety of foreign laws and regulatory requirements;
    increased chances of our intellectual property being infringed
    as a result of the failure of foreign governments to enforce the
    protection of intellectual property rights;
    political and economic instability in overseas
    locations; and
    global health related concerns, such as SARS, Avian Flu and
    other health epidemics and viruses.  We are
    dependent on international markets for a large portion of our
    purchases and sales.
      
    fluctuations in foreign currencies, which may adversely affect
    the prices of our products and the prices of raw materials used
    in our products;
    trade disputes; 15




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
    changes in regulatory requirements, license requirements,
    tariffs and other trade barriers;
    the possibility of quotas, duties, taxes or other changes or
    restrictions upon the importation or exportation of our products
    implemented by the United States government or foreign
    governments;
    the timing and availability of export or other licenses;
    general political and economic conditions in the countries in
    which we sell our products;
    language and other cultural differences which may inhibit our
    sales and marketing efforts;
    costs of complying with a variety of foreign laws, including
    import or export licensing requirements;
    difficulty of accounts receivable collections;
    increased chances of our intellectual property being infringed
    as a result of the failure of foreign governments to enforce the
    protection of intellectual property rights; and
    public health issues that could disrupt local economies.  If we
    are unable to retain employees with key technical expertise or
    we are otherwise unable to protect our intellectual property, or
    if we are found to have infringed third party intellectual
    property rights, our financial condition and future prospects
    could be materially harmed.
        Our
    business is dependent upon retaining key personnel and
    attracting new employees.
   16




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Our
    failure to comply with environmental regulations could subject
    us to costs and production delays.
    If our
    selling prices decline and we fail to reduce our costs, our
    sales and operating results will decline.
      If we
    fail to develop, introduce and sell new products or fail to
    develop and implement new manufacturing technologies, our
    operating results could be adversely affected.
    
    we fail to complete and introduce new product designs in a
    timely manner;
    we are unable to design and manufacture products according to
    the requirements of our customers;
    our customers do not successfully introduce new systems or
    products incorporating our products;
    market demand for our new products does not develop as
    anticipated;
    we are unable to obtain raw materials in a timely manner or at
    favorable prices; 17




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
    we are unable to maintain pricing to sustain or grow our gross
    margins; or
    we fail to anticipate our customers changing needs and
    emerging technological trends.    Increasing
    competition could reduce the demand for our
    products.
    We
    depend on limited suppliers for certain critical raw materials.
    Our inability to obtain sufficient raw materials at favorable
    prices could increase our prices or otherwise harm our
    business.
    Terrorism
    and the global responses to terrorism, the unsettled world
    political situations and perceived nuclear threats increase
    uncertainties with respect to many of our businesses and may
    adversely affect our business and results of
    operations.
   18




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While
    we believe our control systems are effective, there are inherent
    limitations in all control systems, and misstatements due to
    error or fraud may occur and not be detected.
    Our
    Board of Directors is authorized to issue shares of preferred
    stock that could have rights superior to our outstanding shares
    of common stock, and, if issued, could adversely impact the
    value of our common stock.
    
    voting rights, including the right to vote as a class on
    particular matters;
    preferences as to dividends and liquidation rights;
    conversion rights and anti-dilution protections; and
    redemption rights.    Our
    shareholders rights plan may make it more difficult for
    others to obtain control of us.
   19




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Our
    stock price has been volatile.
    
    future announcements concerning our company, our competitors or
    our principal customers, such as quarterly operating results,
    adjustments to previously reported results, changes in earnings
    estimates by analysts, technological innovations, new product
    introductions, governmental regulations, or litigation;
    the liquidity within the market of our common stock;
    sales of common stock by our officers, directors and other
    insiders;
    investor perceptions concerning the prospects of our business;
    market conditions and investor sentiment affecting market prices
    of equity securities of high technology companies in the
    microelectronic or display industries;
    general economic, political and market conditions, such as
    recessions or international currency fluctuations;
    market reaction to acquisitions, joint ventures or strategic
    investments announced by us or our competitors;      ITEM 1B
    UNRESOLVED STAFF COMMENTS    ITEM 2
    PROPERTIES    SquareLocation

Footage


Primary Segment

Own/LeasePhoenix, Arizona (Headquarters)


74,000


Microelectronic

LeaseHillsboro, Oregon


58,000


Display

LeaseFort Wayne, Indiana


75,000


Display

OwnColumbus, Ohio


41,000


Display

Own    20




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##### Table of Contents



ITEM 3
    LEGAL
    PROCEEDINGS  McJimsey v. White Electronic Designs
    Corporation, et al. No. CV04-1499-PHX-SRB), Afework v. White Electronic Designs Corporation,
    et al No. CV04-1558-PHX-JWS), Anders v. White Electronic Designs Corporation, et al. No. CV04-1632-PHX-JAT), Sammarco v. White Electronic Designs Corporation, et
    al. No. CV04-1744-PHX-EHC),
  Dodt v. Shokrgozar, et al. No. CV04-1674-PHX-NVW) Christ v. Shokrgozar, et al. No. CV04-1722-PHX-MHM),
 21




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##### Table of Contents



ITEM 4
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Hamid R. Shokrgozar, 47
    President and Chief Executive 
    Officer, Chairman of the Board

Hamid R. Shokrgozarhas been our President and Chief
    Executive Officer since October 1998 and the Chairman of the
    Board since August 2000. Mr. Shokrgozar served as a director and
    as President and Chief Executive Officer of Bowmar from January
    1998 until the merger of Bowmar and EDI in October 1998. He
    served as President of White Microelectronics, the largest
    division of Bowmar, from June 1993 to December 1997 and as its
    Vice President of Engineering and Technology from July 1988 to
    June 1993. He also served as Chairman of American Electronic
    Association (AEA), Arizona Council, during fiscal years 1999 and
    2000. In addition, he holds a United States Patent for the
    invention of Stacked Silicon Die Carrier Assembly.
    Mr. Shokrgozar holds a Bachelor of Science in Electrical
    Engineering from California State University, Fullerton.Roger A. Derse, 57 
    Vice President and Chief Financial 
    Officer, Secretary and Treasurer

Roger A. Dersehas been our Vice President and Chief
    Financial Officer since March 2004. Mr. Derse has over
    25 years experience in finance and accounting. He
    previously served as Consultant/Acting CFO for Vitron
    Manufacturing from 2002 through February 2004 and was Executive
    Vice President and Chief Operating and Financial Officer for
    Nanonics Corporation from 1998 to 2001. He was Chief Financial
    Officer for the White Microelectronics Division of Bowmar
    Instrument Corporation from 1993 to 1997. Mr. Derse holds a
    Bachelor of Science in Industrial Engineering from the
    University of Michigan, a Master in Accounting from the
    University of Arizona, and is a Certified Public Accountant.Dante V. Tarantine, 54 
    Executive Vice President, 
    Corporate Strategic Development

Dante V. Tarantinehas been our Executive Vice President,
    Corporate Strategic Development since July 2007. He served as
    our Executive Vice President, Sales and Marketing from January
    2003 to June 2007 and our Senior Vice President of Sales from
    August 1998 to January 2003. He previously served as our Senior
    Vice President Sales and Marketing from September 1991 to August
    1998 and as Vice President of Marketing for White
    Microelectronics from February 1987 to September 1991. Mr.
    Tarantine holds a Bachelor of Science in Electrical Engineering
    from California State University, Northridge.  22




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PART II
  ITEM 5  MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES
  Market
    Information
    High


LowYear Ended September 29, 2007First quarter


5.84



4.84Second quarter


6.95



5.43Third quarter


6.85



5.66Fourth quarter


6.02



3.50Year ended September 30, 2006First quarter


5.61



4.86Second quarter


6.11



5.03Third quarter


6.04



4.65Fourth quarter


5.34



4.40     Issuer
    Purchases of Equity Securities
  Rule 10b5-1
  Total Number


Maximumof Shares


Number ofPurchased


Shares thatTotal





as Part of


May Yet beNumber of


Average


Publicly


PurchasedShares


Price Paid


Announced


Under thePeriod

Purchased


per Share


Plan


PlanJuly 1, 2007 - July 28, 2007





$








1,175,642July 29, 2007 - August 25, 2007


166,171


$
5.33



166,171



1,009,471August 26, 2007 - September 29, 2007


386,691


$
5.21



386,691



622,780Total


552,862


$
5.24



552,862  23




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5-year
  COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
 Among White Electronic Designs Corporation, The NASDAQ
    Composite Index
 And The S&P Aerospace & Defense Index
  
  *
    
    $100 invested on September 28, 2002 in stock or
    index-including reinvestment of dividends. Fiscal year ending
    Saturday nearest September
    30th.  9/02


9/03


9/04


9/05


9/06


9/07White Electronic Designs Corporation



100.00




143.52




65.29




68.09




66.36




69.69NASDAQ Composite



100.00




150.59




162.89




185.48




196.37




236.60S&P Aerospace & Defense



100.00




102.04




136.55




158.33




191.88




255.01    24




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ITEM 6
    SELECTED
    CONSOLIDATED FINANCIAL DATA  2003-2007
  2007


2006


2005


2004


2003Statement of Operations Data:Net sales (Note 1)

$
104,237


$
108,928


$
117,031


$
108,962


$
113,534Net income (loss) (Note 2)

$
3,086


$
6,013


$
(3,535
)

$
4,807


$
10,150Earnings (loss) per share:Basic

$
0.13


$
0.25


$
(0.14
)

$
0.20


$
0.48Diluted

$
0.13


$
0.24


$
(0.14
)

$
0.19


$
0.44Balance Sheet Data (at year end):Total assets (Note 1)

$
123,764


$
130,508


$
121,268


$
124,900


$
119,806Long-term debt

$



$



$



$



$
Shareholders equity (Note 1)

$
106,134


$
110,180


$
104,220


$
107,215


$
101,028   This table should be read in conjunction with the
    Consolidated Financial Statements provided elsewhere herein.
    (1)
    In January 2003, the Company acquired IDS for a purchase price
    of approximately $18.6 million. The effect of this transaction
    increased our total assets by approximately $18.0 million and
    our shareholders equity by approximately $9.0 million. Net
    sales for IDS in fiscal 2007, fiscal 2006, fiscal 2005, fiscal
    2004 and fiscal 2003 totaled approximately $19.3 million, $23.5
    million, $28.8 million, $23.4 million and $16.1 million,
    respectively.(2)
    In fiscal 2007, the Company recorded a non-cash intangible asset
    impairment charge of $1.4 million related to customer
    relationships. In fiscal 2006, the Company recorded a non-cash
    goodwill impairment charge of approximately $0.4 million in
    connection with its review of goodwill for impairment. In fiscal
    2005, the Company recorded a non-cash goodwill impairment charge
    of approximately $11.4 million in connection with its review of
    goodwill for impairment and favorable income tax adjustments of
    approximately $1.0 million. The goodwill impairments had no
    corresponding income tax benefit.  ITEM 7
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
  Overview
     25




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Executive
    Summary
         26




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##### Table of Contents



tm tm
          
    Class K certification to allow the Company to provide
    military products intended for space applications. Update:We successfully completed the formal Class K audit with
    the Defense Supply Center Columbus (DSCC). The Company is
    officially a certified Class K manufacturer. The first K
    level kit has gone through line test and is moving through
    assembly and final test. Radiation shielding methods using high
    density metals are being investigated for microelectronic
    packaging. During the quarter we booked a small order totaling
    $0.1 million for a custom multi-chip package for a space
    application and also quoted three new Class K custom
    products. We continue to visit potential customers.
    Pursuit of Circuit Card Assembly (CCA) for military customers.
    Update:Our engineering team finalized the layout of a
    complete GPS receiver, including RF, power supplies, and signal
    conditioning. An initial $0.8 million contract is for the
    delivery of prototypes of a complete CCA for use in a GPS
    communications receiver. The Company expects to begin delivering
    these prototypes in February 2008. Our surface mount lines have
    been upgraded with new equipment to make them more capable and
    flexible in production. We will continue our discussions to
    create CCA manufacturing partnerships with additional customers. 27




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
    Next generation Anti-Tamper (AT) technology for military and
    commercial applications. Update:This new coating process
    is developing on schedule. We are currently setting up
    additional equipment and process development for new material
    sets. We estimate completion in the summer of 2008.
    New applications for industrial grade Compact Flash (CF) in
    ruggedized embedded computing systems including medical, flight
    systems, factory automation, test and measurement and
    instrumentation. Update:The complete family of CF cards
    from 128MB to 8GB are available and are tested at industrial
    temperatures. During the fourth quarter we continued promoting
    our CF cards and received a $0.3 million order. During
    fiscal 2007 our CF orders totaled over $1.5 million. We
    will continue to promote this new line of flash products to the
    industrial and medical markets.
    Next generation display enhancement technology,
    Max-Vutm
    II technology. Update:We developed proof of concept
    glass-bonded LCD prototypes using two new optical bonding
    processes. We developed a preliminary mass production cost model
    and we also initiated design validation testing on one process.
    This will allow us to penetrate markets previously not served by
    our
    Max-Vutm
    I process. We estimate that the new
    Max-Vutm
    II process will be production ready by the middle of fiscal year
    2008.
    Fully integrated Touch Panel display products. Update:
    During the fourth quarter we continued to demonstrate sunlight
    readable display systems with integrated touch sensors to
    various customers. These displays have very low reflectance
    while retaining excellent brightness, enabling their use in very
    high brightness environments. By utilizing our
    Max-Vutm
    optical bonding process, the clarity and contrast of these
    display systems are excellent and the stiffness and strength of
    the display system are substantially enhanced, increasing the
    ruggedness of the display and the quality of the touch or pen
    feel when using the touch sensor. The positive feedback from our
    product demonstrations has resulted in samples being sent to
    multiple customers.
    Continue the stock repurchase program. Update:On
    February 3, 2007, the Board of Directors authorized the
    second repurchase program to acquire up to an additional 5%, or
    1,175,642 shares, of our outstanding common stock. The
    program is being implemented through a
    Rule 10b5-1
    stock purchase plan and the plan will expire when all authorized
    shares have been purchased or in April 2008, whichever occurs
    first. The plan authorized the repurchase of shares beginning in
    July 2007. As of November 27, 2007, we have purchased a
    total of 932,727 shares at an average price of $5.27, for
    approximately $4.9 million, including commissions and fees.
    Pursuing strategic acquisitions. Update:We have and will
    continue to evaluate various strategic acquisitions. We continue
    to search for and evaluate companies that we believe could
    expand and augment our existing businesses.   28




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##### Table of Contents



Segments
    2007


2006


2005Microelectronic SegmentMilitary/Industrial Market

$
45,792


$
40,446


$
37,765Commercial Market


14,580



19,751



26,31860,372



60,197



64,083Display SegmentMilitary/Industrial Market


11,376



11,851



11,515Commercial Market


32,489



36,880



41,43343,865



48,731



52,948Total

$
104,237


$
108,928


$
117,031Microelectronic SegmentMilitary/Industrial Market


44
%


37
%


33
%Commercial Market


14
%


18
%


22
%58
%


55
%


55
%Display SegmentMilitary/Industrial Market


11
%


11
%


10
%Commercial Market


31
%


34
%


35
%42
%


45
%


45
%Total


100
%


100
%


100
%     Critical
    Accounting Policies and Estimates
    
    We sell microelectronic and display products primarily to
    military prime contractors and commercial OEMs. A small portion
    of our products are also sold through distributors or resellers.
    We recognize revenue on product sales when persuasive evidence
    of an arrangement with the customer exists, title to the product
    has passed to the customer (usually occurs at time of shipment),
    the sales price is fixed or determinable, and collectibility of
    the related billing is reasonably assured. Advance payments from
    customers are deferred and recognized when the related products
    are shipped. Revenue relating to products sold to distributors
    or resellers who either have return rights or where the Company
    has a history of accepting product returns are deferred and
    recognized when the distributor or reseller sells the product to
    the end customer. We also provide limited design services
    pursuant to related customer purchase orders and generally
    recognize the associated revenue as such services are performed.
    However, it may be deferred until certain elements are
    completed. We may from time to time enter into certain
    arrangements that contain multiple elements such as 29




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##### Table of Contents



performing limited design services accompanied with follow-on
    manufacturing of related products. We allocate revenue to the
    elements based on relative fair value, and recognize revenue for
    each element when there is evidence of an arrangement, delivery
    has occurred or services have been rendered, the price is fixed
    or determinable and collectibility is reasonably assured.
    Arrangements with multiple elements that are not considered
    separate units of accounting require deferral of revenue until
    certain other elements have been delivered or the services have
    been performed. The amount of the revenue recognized is impacted
    by our judgment as to whether an arrangement includes multiple
    elements, and whether the elements are considered separate units
    of accounting.  
    Historically, we have experienced fluctuations in the demand for
    our products based on cyclical fluctuations in the
    microelectronic and display markets. These fluctuations may
    cause inventory on hand to lose value or become obsolete. In
    order to present the appropriate inventory value on our
    financial statements, we identify slow moving or obsolete
    inventories and record provisions to write down such inventories
    to net realizable value. These provisions are based on
    managements comparison of the value of inventory on hand
    against expected future sales. If future sales are less
    favorable than those projected by management, additional
    inventory provisions may be required.
    We record trade accounts receivable at the invoiced amount and
    they do not bear interest. We maintain an allowance for doubtful
    accounts for estimated losses resulting from the inability of
    our customers to make required payments. We make these estimates
    based on an analysis of accounts receivable using available
    information on our customers financial status and payment
    histories. Historically, bad debt losses have not differed
    materially from our estimates. Write-offs against the allowance
    totaled approximately $21,000 in fiscal 2007, $32,000 in fiscal
    2006 and $274,000 in fiscal 2005.
    We maintain a pension plan for eligible union employees at our
    Fort Wayne, Indiana facility. To account for the cost of
    this plan, we make estimates concerning the expected long-term
    rate of return on plan assets, and discount rates to be used to
    calculate future benefit obligations. Changes in the expected
    long-term rate of return on plan assets affect the amount of
    investment income expected to be earned in the future. We base
    our related estimates using historical data on the rate of
    return from equities and fixed income investments, as well as
    projections for future returns on such investments. If the
    actual returns on plan assets do not equal the estimated
    amounts, we may have to fund future benefit obligations with
    additional contributions to the plan. Changes in the discount
    rate affect the value of the plans future benefit
    obligations. A lower discount rate increases the liabilities of
    the plan because it raises the value of future benefit
    obligations. This will also cause an increase in pension expense
    recognized. We use published bond yields to estimate the
    discount rate used for calculating the value of future benefit
    obligations.
    We account for goodwill and intangible assets in accordance with
    SFAS No. 142 which requires goodwill to be tested for
    impairment on an annual basis (and more frequently in certain
    circumstances) and written down when impaired. In fiscal 2005 it
    was determined that the goodwill in our commercial
    microelectronic reporting unit in Phoenix and our display
    reporting unit in Oregon were impaired. Accordingly, we wrote
    down the related goodwill by approximately $11.4 million.
    In fiscal 2006, it was determined that our interface electronics
    reporting unit in the display segment was impaired. Accordingly,
    we wrote down all $0.4 million of the unamortized IDS
    acquisition goodwill related to this reporting unit. Goodwill
    recorded was $5.3 million at September 29, 2007 and
    September 30, 2006. See Notes 2 and 6 of the Notes to
    the Consolidated Financial Statements for information relating
    to the goodwill impairments. Furthermore, SFAS 142 requires
    purchased intangible assets other than goodwill to be amortized
    over their useful lives unless these lives are determined to be
    indefinite. Purchased intangible assets are carried at cost less
    accumulated amortization. Amortization is computed over the
    estimated useful lives of the respective assets, generally two
    to fifteen years. We also regularly evaluate intangible assets
    for impairment pursuant to SFAS No. 144,
    Accounting for the Impairment of Long-Lived Assets and for
    Long-Lived Assets to be Disposed Of, and evaluate the
    continued appropriateness of estimated future lives assigned to
    these assets. In fiscal 2007, it was determined that the
    intangible asset related to customer relationships recorded in
    2003 as part of the IDS acquisition in the Phoenix-based
    location was impaired. We wrote down all $1.4 million of
    the unamortized portion of this intangible asset. See
    Note 6 of the Notes to the Consolidated Financial
    Statements for information relating to the intangible asset
    impairment. 30




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##### Table of Contents




    With the adoption of SFAS 123(R) on October 2, 2005,
    we are required to record the fair value of stock-based
    compensation awards as an expense. In order to determine the
    fair value of stock options on the date of grant, the Company
    applies the Black-Scholes option-pricing model. Inherent in this
    model are assumptions related to expected price volatility,
    option life, risk-free interest rate and dividend yield. While
    the risk-free interest rate and dividend yield are less
    subjective assumptions, typically based on factual data derived
    from public sources, the expected stock price volatility and
    option life assumptions require a greater level of judgment
    which makes them critical accounting estimates.
    We account for income taxes in accordance with
    SFAS No. 109, Accounting for Income Taxes
    (SFAS 109) which requires the recognition of
    deferred tax assets and liabilities for the expected future tax
    consequences of temporary differences between the financial
    statement carrying amounts and the tax bases of assets and
    liabilities. Deferred tax assets are recognized, net of any
    valuation allowance, for deductible temporary differences and
    net operating loss and tax credit carry forwards. We regularly
    review our deferred tax assets for recoverability and, if
    necessary, establish a valuation allowance. During the ordinary
    course of business, there are transactions and calculations for
    which the ultimate tax determination is uncertain. We establish
    reserves for tax related uncertainties based on estimates of
    whether, and the extent to which, additional taxes and interest
    will be due. These reserves are established when, despite our
    belief that our tax return positions are fully supportable, we
    believe that certain positions are likely to be challenged and
    may not be sustained on review by tax authorities. We adjust
    these reserves in light of changing facts and circumstances,
    such as the closing of a tax audit. The provision for income
    taxes includes the impact of reserve provisions and changes to
    reserves that are considered appropriate, as well as the related
    net interest.  Results
    of Operations
    2007


2006


2005Net sales


100.0
%


100.0
%


100.0
%Cost of sales


70.3
%


69.5
%


70.3
%Gross profit


29.7
%


30.5
%


29.7
%Operating expenses:Selling, general and administrative


20.2
%


17.4
%


16.8
%Research and development


6.5
%


6.1
%


4.8
%Amortization of intangible assets


0.5
%


0.4
%


0.5
%Goodwill impairment






0.3
%


9.8
%Intangible asset impairment


1.4
%






Total operating expenses


28.6
%


24.2
%


31.9
%Operating income (loss)


1.1
%


6.3
%


(2.2
)%Interest income


2.4
%


2.0
%


0.9
%Income (loss) before income taxes


3.5
%


8.3
%


(1.3
)%Provision for income taxes


(0.5
)%


(2.8
)%


(1.7
)%Net income (loss)


3.0
%


5.5
%


(3.0
)%  31




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##### Table of Contents



Fiscal
    Year ended September 29, 2007 compared to Fiscal Year ended
    September 30, 2006
  Net
    Sales
    
    Military/industrial net sales in the microelectronic segment
    were $45.8 million for the year ended September 29,
    2007, an increase of $5.4 million, or approximately 13%,
    from $40.4 million for the year ended September 30,
    2006. The increase was due to the shipment of increased orders
    received in recent quarters as we have experienced a higher
    demand for our products. We expect net sales to
    military/industrial customers to increase in fiscal 2008 as
    compared to fiscal 2007.
    Commercial net sales in the microelectronic segment were
    $14.6 million for the year ended September 29, 2007, a
    decrease of $5.2 million, or approximately 26%, from
    $19.8 million for the year ended September 30, 2006.
    Approximately $1.7 million of the decrease was due to
    softness in the high-end server business and the resulting lower
    demand for our products. We expect this trend to continue. We
    also experienced decreased demand for a customers hotel
    entertainment systems due to a slowdown in their business and
    the acquisition of this customer by their competitor. We shipped
    all remaining backlog during the fourth quarter and are
    uncertain at this time of expected future sales volume as they
    continue their integration. However, we expect increased net
    sales in fiscal 2008 to our commercial microelectronic customers.
    Military/industrial net sales in the display segment were
    $11.4 million for the year ended September 29, 2007, a
    decrease of $0.4 million, or approximately 4%, from
    $11.8 million for the year ended September 30, 2006.
    The decrease was primarily due to programs reaching their end of
    life which have been partially offset by new orders. We expect
    military/industrial net sales in the display segment in fiscal
    2008 to grow slightly from sales in fiscal 2007.
    Commercial net sales in the display segment were
    $32.4 million for the year ended September 29, 2007, a
    decrease of $4.5 million, or approximately 12%, from
    $36.9 million for the year ended September 30, 2006.
    The decrease from the prior year is attributable to decreased
    sales to our tablet PC and our appliance customers as the
    economy softened, and was additionally decreased by the delay of
    shipments from a golf course GPS customer, which was somewhat
    offset by an increase in sales to our medical customers. While
    we expect to lose one of our medical customers in fiscal 2008
    due to pricing pressure, we expect commercial net sales in the
    display segment to increase slightly in fiscal 2008.       32




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##### Table of Contents



Gross
    Profit
        Selling,
    General and Administrative Expenses
    s
  Research
    and Development Expenses
     33




---



##### Table of Contents



anti-tamper tm
  Amortization
    of Intangible Assets
    Goodwill
    Impairment
      Intangible
    Asset Impairment
      Interest
    Income
    Income
    Taxes
     34




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##### Table of Contents



Fiscal
    Year ended September 30, 2006 compared to Fiscal Year ended
    October 1, 2005
  Net
    Sales
    
    Military/industrial sales in the microelectronic segment were
    $40.4 million for the year ended September 30, 2006,
    an increase of $2.6 million, or approximately 7%, from
    $37.8 million for the year ended October 1, 2005.
    Commercial sales in the microelectronic segment were
    $19.8 million for the year ended September 30, 2006, a
    decrease of $6.5 million, or approximately 25%, from
    $26.3 million for the year ended October 1, 2005. The
    decline was primarily attributable to lower average selling
    prices reflecting decreased material costs and lower demand of
    our product due to decreased business for some our customers
    which in turn decreased their orders from us.
    Military/industrial sales in the display segment were
    $11.8 million for the year ended September 30, 2006,
    an increase of $0.3 million, or approximately 3%, from
    $11.5 million for the year ended October 1, 2005. The
    slight increase was due to increased requirements for products
    used in the commercial aviation industry.
    Commercial sales in the display segment were $36.9 million
    for the year ended September 30, 2006, a decrease of
    $4.5 million, or approximately 11%, from $41.4 million
    for the year ended October 1, 2005. The decrease from the
    prior year is attributable to decreased sales to NCR of
    $8.7 million and to Whirlpool of $1.1 million compared
    to the prior year, as well as decreased orders from our other
    appliance customers, partially offset by increased sales to
    Hewlett Packard Company of $8.6 million during the period.        Gross
    Profit
     35




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##### Table of Contents



Selling,
    General and Administrative Expenses
    Research
    and Development Expenses
    Amortization
    of Intangible Assets
    Goodwill
    Impairment
        Interest
    Income
    Income
    Taxes
   36




---



##### Table of Contents



Liquidity
    and Capital Resources
             37




---



##### Table of Contents



Rule 10b5-1
  Rule 10b5-1
      Contractual
    Obligations
    Payments Due by Period as of September 29,2007Less Than








More ThanTotal


1 Year


1 - 3 Years


3 - 5 Years


5 Years(In thousands)Operating leases

$
8,649


$
1,561


$
2,615


$
1,795


$
2,678Pension funding(1)


















Total Contractual Cash Obligations

$
8,649


$
1,561


$
2,615


$
1,795


$
2,678  38




---



##### Table of Contents



(1)
    
    We are committed to meeting the annual minimum funding
    requirements relating to our pension plan, which covers
    approximately 29 active employees at our Ft. Wayne, Indiana
    facility. We cannot estimate expected minimum funding
    requirements at this time. We may also make contributions to the
    pension fund in excess of the minimum funding requirements
    during any year. See Note 11 to the Consolidated Financial
    Statements for additional information regarding the pension fund.  Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Contingencies
  McJimsey v. White Electronic Designs
    Corporation, et al. No. CV04-1499-PHX-SRB), Afework v. White Electronic Designs Corporation,
    et al No. CV04-1558-PHX-JWS), Anders v. White Electronic Designs Corporation, et al. No. CV04-1632-PHX-JAT), Sammarco v. White Electronic Designs Corporation,
    et al. No. CV04-1744-PHX-EHC),
  Dodt v. Shokrgozar, et al. No. CV04-1674-PHX-NVW) Christ v. Shokrgozar, et al. No. CV04-1722-PHX-MHM),
 39




---



##### Table of Contents



Recent
    Accounting Pronouncements
         40




---



##### Table of Contents



instrument-by-instrument
  ITEM 7A
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        ITEM 8
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Regulation S-X Form 10-K.
  ITEM 9CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE
    ITEM 9A
    CONTROLS
    AND PROCEDURES  Evaluation of Disclosure Controls and
    Procedures. Form 10-K Rule 13a-14
  Rule 13a-15(e) Rule 15d-15(e)
 41




---



##### Table of Contents



Changes in Internal Control over Financial
    Reporting.
  Managements Report on Internal Control over Financial
    Reporting. Rules 13a-15(f) 15d-15(f).
  Internal Control-Integrated
    Framework
  Form 10-K, Form 10-K.
  ITEM 9B
    OTHER
    INFORMATION  Employment
    Agreement
    Cash
    Incentive Bonus Awards
   42




---



##### Table of Contents



Equity
    Incentive Awards
    Form 10-K.
  Form 10-K.
  PART III
  ITEM 10
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K)
  Form 10-K,
 43




---



##### Table of Contents



www.whiteedc.com. Form 8-K
  ITEM 11
    EXECUTIVE
    COMPENSATION    ITEM 12
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Equity
    Compensation Plan Information
    Number of Securitiesto be Issued Upon


Weighted AverageExercise of


Exercise Price of


Number of SecuritiesOutstanding Options


Outstanding Options


Remaining AvailablePlan Category

and Restricted Stock


and Restricted Stock


for Future IssuanceEquity compensation plans approved by security holders(1)


1,375,826


$
4.40



997,412Equity compensation plans not approved by security holders(2)


884,462


$
5.24



11,946Total


2,260,288


$
4.72



1,009,358     (1)
    
    Equity compensation plans approved by security holders include
    the 1994 Flexible Stock Plan, as amended, the 2001 Director
    Stock Plan, the Amendment to Companys Stock Plan for
    Non-Employee Directors and the 2006 Director Restricted
    Stock Plan.(2)
    
    Equity Compensation Plans not approved by security holders
    include the following plans:  Shokrgozar Plan During fiscal 2000,
    the Companys Board of Directors approved an independent
    grant to Mr. Shokrgozar for a nonqualified stock option to
    purchase up to 125,000 shares of common stock at an
    exercise price of $2.75 per share, vesting over four years. At
    September 29, 2007, 125,000 shares from this
    independent option right were still under option.  2000 Broad Based Non-qualified Stock
    Plan
  IDS Plan
 44




---



##### 



ITEM 13
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS    ITEM 14
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    PART IV
  ITEM 15
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  (a)(1) Financial Statements
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  
  Financial Statements

PageReport of Independent Registered Public
    Accounting Firm  Grant Thornton LLP


49Report of Independent Registered Public
    Accounting Firm  PricewaterhouseCoopers LLP


51Consolidated Balance Sheets as of
    September 29, 2007 and September 30, 2006


52Consolidated Statements of Operations for the
    years ended September 29, 2007, September 30, 2006 and
    October 1, 2005


53Consolidated Statements of Shareholders
    Equity for the years ended September 29, 2007,
    September 30, 2006 and October 1, 2005


54Consolidated Statements of Cash Flows for the
    years ended September 29, 2007, September 30, 2006 and
    October 1, 2005


55Notes to Consolidated Financial Statements


56    (a)(2) Financial Statement Schedules
  INDEX TO
    FINANCIAL STATEMENT SCHEDULES
  
  Financial Schedule

PageSchedule II  Valuation and
    Qualifying Accounts and Reserves


80    (a)(3) Exhibits
  ExhibitNumber

Description2
.1

Agreement and Plan of Merger dated May 3, 1998 by and among
    Bowmar Instrument Corporation and Electronic Designs, Inc. and
    Bravo Acquisition Subsidiary, Inc. (incorporated herein by
    reference to Exhibit 2 on Form 8-K filed May 6, 1998).2
.2

Amendment to Agreement and Plan of Merger dated June 9, 1998
    (incorporated herein by reference to Exhibit 2.1A on Form S-4
    filed June 11, 1998, Registration No. 333-56565).2
.3

Amendment to Agreement and Plan of Merger dated August 24, 1998
    (incorporated herein by reference to Exhibit 2.1B on Form S-4,
    filed September 2, 1998, Registration No. 333-56565).2
.4

Agreement and Plan of Reorganization dated as of January 22,
    2003 by and among White Electronic Designs Corporation, IDS
    Reorganization Corp., and Interface Data Systems, Inc.
    (incorporated herein by reference to Exhibit 2.1 on Form 8-K
    filed January 24, 2003).2
.5

Agreement and Plan of Reorganization dated January 29, 2001, by
    and among White Electronic Designs Corporation, PV Acquisition
    Corporation, Panelview, Inc. and Panelview Partners L.P.
    (incorporated herein by reference to Exhibit 10.29 on Form 10-Q,
    filed February 13, 2001). 45




---



##### Table of Contents



ExhibitNumber

Description2
.6

Agreement and Plan of Merger dated September 26, 2006, by and
    between Interface Data Systems, Inc. and White Electronic
    Designs Corporation (incorporated herein by reference to Exhibit
    2.6 on Form 10-K filed December 14, 2006).3
.1

Amended and Restated Articles of Incorporation of White
    Electronic Designs Corporation (incorporated herein by reference
    to Exhibit 3.1 on Form 10-K filed December 24, 1998).3
.2

Amended and Restated By-Laws of White Electronic Designs
    Corporation dated December 5, 2007 (incorporated herein by
    reference to Form 8-K filed December 7, 2007).4
.1

Shareholder Rights Agreement, effective December 6, 1996,
    (incorporated herein by reference to Exhibit 5(b) on Form 8-K,
    filed December 19, 1996).4
.2

Amendment No. 1 to Rights Agreement, effective as of May 3, 1998
    (incorporated herein by reference to Exhibit 4.3 on Form S-4,
    filed June 11, 1998, Registration No. 333-56565).4
.3

Amendment No. 2 to Rights Agreement, effective December 5, 2006
    (incorporated herein by reference to Exhibit 4.3 on Form 10-K,
    filed December 14, 2006).10
.1

Agreement to be Bound by Registration Rights Agreements, dated
    as of May 3, 1998, by and between Bowmar Instrument Corporation
    and Electronic Designs, Inc. (incorporated herein by reference
    to Exhibit 10.1 on Form S-4, filed Jun 11, 1998, Registration
    No. 333-56565).10
.2**

Agreement to be Bound by Severance Agreements and Employment
    Agreement, dated as of May 3, 1998, by and between Bowmar
    Instrument Corporation and Electronic Designs, Inc.
    (incorporated herein by reference to Exhibit 10.2 on Form S-4,
    filed June 11, 1998, Registration No. 333-56565).10
.3**

1994 Flexible Stock Plan (incorporated herein by reference to
    Exhibit A to the Companys definitive Proxy Statement
    prepared in connection with the 1994 Annual Meeting of
    Shareholders).10
.4**

Amendment to Companys 1994 Flexible Stock Plan, effective
    May 7, 2001 (incorporated herein by reference to Exhibit 99 to
    the Registration Statement on Form S-8, filed May 9, 2001,
    Registration
    No. 333-60544).10
.5

Rule 10b5-1 Stock Purchase Plan, dated June 21, 2006
    (incorporated by reference to Exhibit 10.3 on Form 10-Q, filed
    August 10, 2006).10
.6

Revolving Line of Credit Agreement with JPMorganChase Bank,
    N.A., dated April 3, 2007 (incorporated by reference to Exhibit
    10.2 on Form 10-Q, filed May 10, 2007).10
.7**

White Electronic Designs Corporation 2001 Director Stock
    Plan (incorporated herein by reference to Exhibit 99 on Form
    S-8, filed May 9, 2001, Registration No. 333-60536).10
.8**

Amendment to Companys Stock Option Plan for Non-Employee
    Directors (incorporated herein by reference to Exhibit 99 on
    Form S-8, filed May 9, 2001, Registration No. 333-60548).10
.9**

White Electronic Designs Corporation 2000 Broad Based Employee
    Stock Option Plan (incorporated herein by reference to Exhibit
    99 on Form S-8, filed May 9, 2001, Registration No. 333-60542).10
.10*
         **

Executive Employment Agreement made as of December 13, 2007
    between White Electronic Designs Corporation and Hamid R.
    Shokrgozar.10
.11**

Non-Qualified Stock Option Agreement between White Electronic
    Designs Corporation and Hamid Shokrgozar dated November 10,
    1999 (incorporated herein by reference to Exhibit 10.42 on Form
    10-K filed on December 23, 2002).10
.12

Industrial Real Estate Lease dated February 4, 1997 between
    Bowmar Instrument Corp., as tenant, and Allred Phoenix
    Properties, L.L.C., as landlord (incorporated herein by
    reference to Exhibit 10.5 on Form 10-K for the fiscal year
    ended September 27, 1997).10
.13

First Amendment to certain Industrial Real Estate Lease dated
    February 4, 1997 between White Electronic Designs Corporation
    (as successor-in-interest of Bowmar Instrument Corp.) and Gus
    Enterprises-XII, L.L.C. (as successor-in-interest of Allred
    Phoenix Properties, L.L.C.) dated November 5, 2004 (incorporated
    herein by reference to Exhibit 10.21 on Form 10-K filed on
    December 16, 2004). 46




---



##### Table of Contents



ExhibitNumber

Description10
.14**

2006 Director Restricted Stock Plan, effective March 24,
    2006 (incorporated by reference to Appendix A to Schedule 14A,
    filed on January 24, 2006).10
.15**

First Amendment to 2006 Director Restricted Stock Plan,
    effective August 24, 2006 (incorporated by reference to Exhibit
    99.1 on Form 8-K, filed August 30, 2006).10
.16**

Form of Restricted Stock Agreement to 2006 Director
    Restricted Stock Plan, effective August 24, 2006 (incorporated
    by reference to Exhibit 99.2 on Form 8-K, filed on August 30,
    2006).10
.17**

Change of Control Agreement between Dante V. Tarantine and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated herein by reference to Exhibit 10.26 on Form 10-K,
    filed December 14, 2006).10
.18**

Change of Control Agreement between Roger A. Derse and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated herein by reference to Exhibit 10.27 on Form 10-K,
    filed December 14, 2006).10
.19*

Form of Restricted Stock Units Award Agreement under the 1994
    Flexible Stock Plan.10
.20*

Form of Performance Share Award Agreement under the 1994
    Flexible Stock Plan.21
.1*

Subsidiaries of White Electronic Designs Corporation.23
.1*

Consent of Grant Thornton LLP.23
.2*

Consent of PricewaterhouseCoopers LLP.31
.1*

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2*

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
.1##

Certification Pursuant to 18 U.S. C. Section 1350, As Adopted
    Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.32
.2##

Certification Pursuant to 18 U.S. C. Section 1350, As Adopted
    Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith.**
    
    Management compensatory contract, plan or arrangement.##
    
    Furnished herewith. 47




---



##### Table of Contents



SIGNATURES
       /s/  Roger
    A. Derse         /s/  Hamid
    R.
    Shokrgozar

/s/  Edward
    A.
    WhiteHamid R. Shokrgozar
    President, Chief Executive Officer and Chairman of the Board of
    Directors

Edward A. White
    Vice Chairman of the Board of DirectorsDate: December 13, 2007

Date: December 13, 2007/s/  Thomas
    M.
    Reahard

/s/  Thomas
    J.
    ToyThomas M. Reahard 
    Lead Director

Thomas J. Toy
    DirectorDate: December 13, 2007

Date: December 13, 2007/s/  Jack
    A.
    Henry

/s/  Roger
    A.
    DerseJack A. Henry
    Director

Roger A. Derse
    Chief Financial Officer, Secretary and TreasurerDate: December 13, 2007

Date: December 13, 2007/s/  Paul
    D.
    QuadrosPaul D. Quadros
    DirectorDate: December 13, 2007  48




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control 
    Integrated Framework
        Internal Control 
    Integrated Framework
 49




---



##### Table of Contents



GRANT
    THORNTON LLP
   50




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
       Share-Based
    Payment
  
   51




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  September 29,


September 30,2007


2006(In thousands, exceptper share data)ASSETSCurrent AssetsCash and cash equivalents

$
48,652


$
55,829Accounts receivable, less allowance for doubtful accounts of
    $300 and $256


17,805



19,020Inventories


31,213



19,401Assets held for sale






1,924Prepaid expenses and other current assets


741



6,512Deferred income taxes


4,603



4,323Total Current Assets


103,014



107,009Property, plant and equipment, net


12,678



13,367Deferred income taxes


171



Goodwill


5,306



5,306Intangible assets, net


2,477



4,609Other assets


118



217Total Assets

$
123,764


$
130,508LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable

$
6,718


$
5,794Accrued salaries and benefits


1,748



2,043Other accrued expenses


2,785



7,635Deferred revenue


4,853



1,961Total Current Liabilities


16,104



17,433Accrued long-term pension liability


271



303Deferred income taxes


33



1,197Other long-term liabilities


1,222



1,395Total Liabilities


17,630



20,328Commitments and ContingenciesShareholders EquityPreferred stock, 1,000,000 shares authorized, no shares
    issued






Common stock, $0.10 stated value, 60,000,000 shares
    authorized, 24,841,586 and 24,666,390 shares issued


2,484



2,467Treasury stock, 1,828,412 and 285,587 shares, at par


(183
)


(29
)Additional paid-in capital


83,787



90,637Retained earnings


20,228



17,142Accumulated other comprehensive loss


(182
)


(37
)Total Shareholders Equity


106,134



110,180Total Liabilities and Shareholders Equity

$
123,764


$
130,508    52




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##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year EndedSeptember 29,


September 30,


October 1,2007


2006


2005(In thousands, except share data and per share data)Net sales

$
104,237


$
108,928


$
117,031Cost of sales


73,321



75,713



82,298Gross profit


30,916



33,215



34,733Operating expenses:Selling, general and administrative


21,144



18,970



19,704Research and development


6,769



6,592



5,634Amortization of intangible assets


473



473



606Goodwill impairment






364



11,435Intangible asset impairment


1,414







Total operating expenses


29,800



26,399



37,379Operating income (loss)


1,116



6,816



(2,646
)Interest income


2,540



2,180



1,138Income (loss) before income taxes


3,656



8,996



(1,508
)Provision for income taxes


(570
)


(2,983
)


(2,027
)Net income (loss)

$
3,086


$
6,013


$
(3,535
)Earnings (loss) per share  basic

$
0.13


$
0.25


$
(0.14
)Earnings (loss) per share  diluted

$
0.13


$
0.24


$
(0.14
)Weighted average number of common shares and equivalents:Basic


23,574,852



24,488,041



24,437,672Diluted


24,107,677



24,930,939



24,437,672    53




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##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  AccumulatedAdditional








Other


TotalCommon


Common


Treasury


Paid-in


Unearned


Retained


Comprehensive


ShareholdersShares


Stock


Stock


Capital


Compensation


Earnings


Loss


Equity(In thousands of dollars, except share data)Balance, October 2, 2004


24,335,310


$
2,433


$
(4
)

$
90,347


$
(8
)

$
14,664


$
(217
)

$
107,215Net loss






















(3,535
)






(3,535
)Minimum pension liability


























35



35Comprehensive loss






























(3,500
)Stock options exercised


119,752



12







288















300Common stock issued through employee stock purchase plan


24,214



3







104















107Stock compensation earned during the year


















8











8Tax benefits related to exercise of stock options














90















90Balance, October 1, 2005


24,479,276



2,448



(4
)


90,829







11,129



(182
)


104,220Net income






















6,013







6,013Minimum pension liability


























145



145Comprehensive income






























6,158Stock options and warrants exercised


187,114



19







443















462Stock-based compensation expense














373















373Common stock repurchased through common stock purchase plan










(25
)


(1,174
)














(1,199
)Tax benefits related to exercise of stock options














166















166Balance, September 30, 2006


24,666,390



2,467



(29
)


90,637







17,142



(37
)


110,180Net income






















3,086







3,086Comprehensive income






























3,086Stock options and warrants exercised


162,696



16







431















447Restricted stock vested


12,500



1







(1
)














Stock-based compensation expense














397















397Common stock repurchased through common stock purchase plan










(154
)


(7,887
)














(8,041
)Tax benefits related to exercise of stock options and warrants














210















210Adjustment to initially adopt SFAS 158, net of tax


























(145
)


(145
)Balance, September 29, 2007


24,841,586


$
2,484


$
(183
)

$
83,787


$



$
20,228


$
(182
)

$
106,134    54




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##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year EndedSeptember 29,


September 30,


October 1,2007


2006


2005(In thousands)OPERATING ACTIVITIES:Net income (loss)

$
3,086


$
6,013


$
(3,535
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


3,885



4,160



4,067Goodwill impairment






364



11,435Intangible asset impairment


1,414







Deferred income tax


(1,547
)


(404
)


670(Gain) loss on disposition of property, plant and equipment


90



26



(41
)Gain on disposition of assets held for sale


(191
)






Stock-based compensation expense related to employee stock awards


397



373



Tax benefit related to exercise of stock awards


210



166



90Excess tax benefits from stock-based compensation


(56
)


(84
)


Net changes in balance sheet accounts:Accounts receivable


1,215



437



(418
)Inventories


(11,812
)


208



5,135Prepaid expenses and other current assets


5,771



313



759Other assets


99



(99
)


10Accounts payable


793



37



(4,239
)Accrued expenses and deferred revenue


(2,253
)


(2,214
)


2,554Other long-term liabilities


(173
)


184



(407
)Net cash provided by operating activities


928



9,480



16,080INVESTING ACTIVITIES:Acquisition of property, plant and equipment


(2,787
)


(4,060
)


(3,509
)Proceeds from disposition of property, plant, and equipment






54



Proceeds from disposition of assets held for sale


2,220







Net cash used for investing activities


(567
)


(4,006
)


(3,509
)FINANCING ACTIVITIES:Common stock issued for exercise of options, warrants and
    restricted stock


447



462



300Common stock issued through employee purchase plan










107Repurchase of common stock


(8,041
)


(1,199
)


Excess tax benefits from stock-based compensation


56



84



Net cash provided by (used for) financing activities


(7,538
)


(653
)


407Net change in cash and cash equivalents


(7,177
)


4,821



12,978Cash and cash equivalents at beginning of year


55,829



51,008



38,030Cash and cash equivalents at end of year

$
48,652


$
55,829


$
51,008SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for income taxes

$
1,018


$
4,649


$
1,653SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
    ACTIVITIES:Acquisition of property, plant and equipment in accounts payable

$
131


$
45


$
881    55




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    NATURE OF
    OPERATIONS    2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  a.
    Principles
    of Consolidation    b.
    Fiscal
    Year-End    c.
    Cash
    and Cash Equivalents    d.
    Accounts
    Receivable    e.
    Inventories    f.
    Property,
    Plant and Equipment   56




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    g.
    Goodwill
    and Other Intangible Assets             57




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      h.
    Product
    Warranties    i.
    Revenue
    Recognition      j.
    Shipping
    Costs    k.
    Research
    and Development    l.
    Income
    Taxes   58




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    m.
    Fair
    Value of Financial Instruments    n.
    Accounting
    Estimates    o.
    Earnings
    (Loss) per Share      2007Income


Shares


Per Share(Numerator)


(Denominator)


AmountEarnings per share-basicNet Income

$
3,086,000



23,574,852


$
0.13Income available to common stockholders


3,086,000



23,574,852



0.13Effects of Dilutive SecuritiesStock options






532,825



Earnings per share-dilutedIncome available to common stockholders

$
3,086,000



24,107,677


$
0.13     2006Income


Shares


Per Share(Numerator)


(Denominator)


AmountEarnings per share-basicNet Income

$
6,013,000



24,488,041


$
0.25Earnings available to common stockholders


6,013,000



24,488,041



0.25Effects of Dilutive SecuritiesStock options






442,898



(0.01
)Earnings per share-dilutedIncome available to common stockholders

$
6,013,000



24,930,939


$
0.24  59




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2005Loss


Shares


Per Share(Numerator)


(Denominator)


AmountLoss per share-basicNet Loss

$
(3,535,000
)


24,437,672


$
(0.14
)Earnings available to common stockholders


(3,535,000
)


24,437,672



(0.14
)Effects of Dilutive SecuritiesStock options










Loss per share-dilutedLoss available to common stockholders

$
(3,535,000
)


24,437,672


$
(0.14
)     p.
    Stock-Based
    Compensation  Stock
    Options
       60




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2005Net loss  as reported

$
(3,535
)Less: Total stock-based employee compensation expense determined
    under the fair value based method for all awards, net of related
    tax effects


(1,525
)Net loss  pro forma

$
(5,060
)Loss per share-basic as reported

$
(0.14
)Loss per share-basic pro forma

$
(0.20
)Loss per share-diluted as reported

$
(0.14
)Loss per share-diluted pro forma

$
(0.20
)     Options OutstandingOptions





WeightedAvailable





Averagefor


Options


Exercise PriceGrant


Outstanding


per ShareBalance at September 30, 2006


882



2,235


$
4.80Granted


(32
)


32



5.64Exercised






(43
)


2.17Expired


1



(9
)


5.93Forfeited


17



(17
)


5.07Balance at September 29, 2007


868



2,198


$
4.86             Employee Stock Options2007


2006


2005Expected options term (years)


5.1



5.3



5.2Risk free interest rate


4.26
%


4.56
%


4.13
%Volatility


52
%


55
%


68
%Dividend yield










   61




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee Stock Purchase Plan2007


2006


2005Expected options term (years)










0.5Risk free interest rate










3.79
%Volatility










39
%Dividend yield










       Restricted
    Stock Units
    Number of


Weighted-Restricted


AverageStock


Grant-DateUnits


Fair ValueOutstanding on September 30, 2006


38


$
5.81Granted


38



6.76Vested


(13
)


5.81Forfeited






Outstanding on September 29, 2007


63


$
6.38       q.
    Newly
    Issued Accounting Standards     62




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        instrument-by-instrument
  3.
    INVENTORIES    September 29,


September 30,2007


2006Raw materials

$
22,412


$
11,482Work-in-process


5,294



4,971Finished goods


3,507



2,948Total inventories

$
31,213


$
19,401    63




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    ASSETS
    HELD FOR SALE    September 29,


September 30,2007


2006Land

$



$
300Building and improvements






1,624$



$
1,924     5.
    PREPAID
    EXPENSES AND OTHER CURRENT ASSETS    September 29,


September 30,2007


2006Litigation insurance receivable (Note 13)

$



$
6,000Other


741



512Total accrued expenses

$
741


$
6,512   6.
    GOODWILL
    AND INTANGIBLE ASSETS    Microelectronic


DisplaySegment


Segment


TotalBalance as of October 1, 2005

$
1,492


$
4,178


$
5,670Goodwill impairment






(364
)


(364
)Balance as of September 30, 2006


1,492



3,814



5,306Goodwill impairment










Balance as of September 29, 2007

$
1,492


$
3,814


$
5,306    64




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Gross


Adoption of


AccumulatedAmount


SFAS 158


Amortization


Impairment


Net AmountSeptember 29, 2007Customer relationships

$
4,100


$



$
(1,276
)

$
(1,414
)

$
1,410Existing technology


2,427







(1,360
)






1,067Other


1,244



(244
)


(1,000
)






Total intangible assets

$
7,771


$
(244
)

$
(3,636
)

$
(1,414
)

$
2,477September 30, 2006Customer relationships

$
4,100


$



$
(1,002
)

$



$
3,098Existing technology


2,427







(1,160
)






1,267Other


1,244







(1,000
)






244Total intangible assets

$
7,771


$



$
(3,162
)

$



$
4,609    65




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 29,


September 30,2007


2006Balance at beginning of year

$
4,609


$
5,121Impairment


(1,414
)


Change in intangible pension asset


(244
)


(39
)Amortization


(474
)


(473
)Balance at end of year

$
2,477


$
4,609     2008

$
3362009


3362010


3362011


3362012


336Thereafter


797$
2,477   7.
    PROPERTY,
    PLANT AND EQUIPMENT    September 29,


September 30,2007


2006Land

$
397


$
397Buildings and improvements


1,837



1,831Machinery and equipment


17,722



17,461Furniture and fixtures


4,720



4,163Leasehold improvements


7,069



6,392Construction in progress


1,375



678Total, at cost


33,120



30,922Less accumulated depreciation and amortization


(20,442
)


(17,555
)Net property, plant and equipment

$
12,678


$
13,367     8.
    OTHER
    ACCRUED EXPENSES    September 29,


September 30,2007


2006Accrued litigation settlement (Note 13)

$



$
6,000Sales commissions


771



506Warranty


363



413Income taxes


749



Other accruals


902



716Total accrued expenses

$
2,785


$
7,635  66




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Balance of warranty reserve at October 2, 2004

$
640Provision for warranty claims


914Warranty claims charged against the reserve


(932
)Balance of warranty reserve at October 1, 2005

$
622Provision for warranty claims


121Warranty claims charged against the reserve


(330
)Balance of warranty reserve at September 30, 2006

$
413Provision for warranty claims


135Warranty claims charged against the reserve


(185
)Balance of warranty reserve at September 29, 2007

$
363   9.
    LINE OF
    CREDIT    10.
    INCOME
    TAXES    2007


2006


2005CurrentFederal

$
1,970


$
3,186


$
1,066State


232



201



291Total current


2,202



3,387



1,357DeferredFederal


(1,207
)


(298
)


818State


(425
)


(106
)


(148
)Total deferred


(1,632
)


(404
)


670Income tax provision

$
570


$
2,983


$
2,027  67




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006


2005Income tax expense (benefit) provision at statutory rate

$
1,243


$
3,059


$
(513
)State taxes, net of federal benefit


171



115



(56
)Federal and state credits


(614
)


(47
)


(816
)Extraterritorial income exclusion


(23
)


(94
)


(139
)Non-deductible goodwill impairment






124



4,311Manufacturers deduction


(56
)


(93
)


Adjustments related to prior year accruals


(217
)


(119
)


(786
)Other


66



38



26Income tax provision

$
570


$
2,983


$
2,027     September 29,


September 30,2007


2006Deferred tax assets:Tax credits

$
375


$
275Allowance for doubtful accounts


120



101Inventories


1,939



2,453Deferred revenue


1,877



771Accrued expenses and other liabilities


816



856Pension


90



21Net operating loss carry forwards


850



1,104Deferred tax assets


6,067



5,581Deferred tax liabilities:Property, plant, and equipment


(145
)


(552
)Intangible assets


(1,007
)


(1,722
)Other


(174
)


(181
)Deferred tax liabilities


(1,326
)


(2,455
)Net deferred tax assets

$
4,741


$
3,126        68




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        11.
    BENEFIT
    PLANS  Defined
    Benefit Plan
    year-by-year
     69




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Before





AfterApplication of





Application ofSFAS No. 158


Adjustments


SFAS No. 158Deferred income taxes

$
4,535


$
68


$
4,603Total Current Assets


102,946



68



103,014Intangible assets, net


2,721



(244
)


2,477Total Assets


123,941



(177
)


123,764Accrued long-term pension liability


303



(32
)


271Total Liabilities


17,662



(32
)


17,630Accumulated other comprehensive loss


(37
)


(145
)


(182
)Total Shareholders Equity


106,279



(145
)


106,134Total Liabilities and Shareholders Equity


123,941



(177
)


123,764     September 29,


September 30,2007


2006Change in Benefit ObligationBenefit obligation at beginning of year

$
3,317


$
3,363Service cost


54



63Interest cost


189



182Amendments


1



Actuarial gain


(91
)


(136
)Benefits paid


(172
)


(155
)Benefit obligation at end of year

$
3,298


$
3,317Change in Plan AssetsFair value of plan assets at beginning of year

$
2,888


$
2,811Actual return on plan assets


311



238Expenses






(6
)Benefits paid


(172
)


(155
)Fair value of plan assets at end of year

$
3,027


$
2,888Funded Status

$
(271
)

$
(428
)Unrecognized actuarial (gain) loss


(176
)


58Unrecognized prior service cost


209



244Net amount recognized

$
(238
)

$
(126
) 70




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  September 29,


September 30,2007


2006Amounts Recognized in the Consolidated Balance SheetsBefore adoption of SFAS No. 158:Accrued benefit liability





$
(428
)Intangible asset






244Accumulated other comprehensive loss






58Net amount recognized





$
(126
)After adoption of SFAS No. 158:Noncurrent liabilities

$
(271
)Amount recognized

$
(271
)Amounts recognized in accumulated other comprehensive lossNet actuarial gain

$
(176
)Prior service cost


209Total (before tax)

$
33       Fiscal Year Ended2007


2006


2005Net periodic benefit costService cost

$
81


$
89


$
87Interest cost


189



182



183Expected return on plan assets


(194
)


(189
)


(177
)Recognized prior service cost


36



39



39Net periodic benefit cost


112



121



132Additional InformationDecrease in minimum liability included in accumulated other
    comprehensive loss

$
(58
)

$
(205
)

$
(60
)    71




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 29,

September 30,

October 1,2007

2006

2005Discount Rate


5.89
%


5.65
%


5.92
%Expected return on plan assets


7.00
%


7.00
%


7.00
%             2007


2006Cash and cash equivalents

$
133


$
48Fixed income mutual funds


1,181



1,203Equity mutual funds


1,707



1,631Other


6



6Total

$
3,027


$
2,888    72




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        PensionPeriod

Benefits2008

$
2032009


2012010


2072011


2392012


2402013-2017


1,397   401(k)
    Plan
    12.
    STOCK
    OPTIONS, WARRANTS, AND STOCK PURCHASE PLANS  Stock
    Option Plans
         73




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  paid-in-capital
    2007


2006


2005Weighted





Weighted





WeightedShares


Average


Shares


Average


Shares


AverageUnder


Exercise


Under


Exercise


Under


ExerciseOption


Price


Option


Price


Option


PriceBeginning balance outstanding


2,235


$
4.80



2,208


$
4.70



2,047


$
4.43Granted


32


$
5.64



220


$
4.86



325


$
6.11Exercised


(43
)

$
2.17



(137
)

$
2.29



(108
)

$
2.36Expired


(9
)

$
5.93



(31
)

$
8.82



(42
)

$
7.65Forfeited


(17
)

$
5.07



(25
)

$
5.15



(14
)

$
7.23Ending balance outstanding


2,198


$
4.86



2,235


$
4.80



2,208


$
4.70Options exercisable at year end


2,028


$
4.85



1,985


$
4.77



2,071


$
4.58Shares available for future grant


868







882







1,167Weighted average fair value of all options granted during the
    year





$
2.96






$
2.59






$
4.21     Options Outstanding


Options ExercisableWeighted-


Weighted-








Weighted-


Weighted-Average


Average








Average


AverageRemaining


Exercise


Aggregate





Remaining


Exercise


AggregateRange of

Number


Contractual


Price per


Intrinsic


Number


Contractual


Price per


IntrinsicExercise Prices

Outstanding


Life (in Years)


Share


Value


Exercisable


Life (in Years)


Share


Value0.0000 - 1.6000


249



1.18


$
1.13







249






$
1.131.6001 - 3.2000


350



2.02



2.69







350







2.693.2001 - 4.8000


573



4.32



3.96







509







3.864.8001 - 6.4000


331



7.07



5.54







225







5.736.4001 - 8.0000


515



5.68



6.98







515







6.988.0001 - 9.6000


87



5.46



8.67







87







8.679.6001 - 11.2000


81



3.06



10.59







81







10.5911.2001 - 12.8000


12



1.19



12.19







12







12.19Total


2,198



4.31


$
4.86


$
2,661



2,028



3.94


$
4.85


$
2,609    74




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock Plan
    13.
    COMMITMENTS
    AND CONTINGENCIES  non-cancelable
    McJimsey v. White Electronic Designs
    Corporation, et al. No. CV04-1499-PHX-SRB), Afework v. White Electronic Designs Corporation,
    et al No. CV04-1558-PHX-JWS), Anders v. White Electronic Designs Corporation, et al. No. CV04-1632-PHX-JAT), Sammarco v. White Electronic Designs Corporation, et
    al. No. CV04-1744-PHX-EHC),
 75




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Dodt v. Shokrgozar, et al. No. CV04-1674-PHX-NVW) Christ v. Shokrgozar, et al. No. CV04-1722-PHX-MHM),
    14.
    CONCENTRATIONS
    OF CREDIT RISK     76




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      15.
    SHAREHOLDERS
    RIGHTS PLAN    16.
    FINANCIAL
    DATA BY BUSINESS SEGMENT           77




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            2007


2006


2005United States of America

$
73,876


$
77,814


$
96,295Europe and Middle East


12,642



10,761



10,412Asia Pacific


14,583



16,742



8,076Other


3,136



3,611



2,248Total Net Sales

$
104,237


$
108,928


$
117,031   OPERATIONS
    BY BUSINESS SEGMENTS
  2007


2006


2005(In thousands)Net salesMicroelectronics

$
60,372


$
60,197


$
64,083Display


43,865



48,731



52,948Total net sales

$
104,237


$
108,928


$
117,031Income (loss) before tax(1)Microelectronics

$
5,271


$
9,336


$
3,133Display


(1,615
)


(340
)


(4,641
)Total income (loss) before tax

$
3,656


$
8,996


$
(1,508
)Identifiable assetsMicroelectronics

$
43,318


$
36,518


$
38,780Display


26,902



27,622



26,853General corporate


53,544



66,368



55,635Total identifiable assets

$
123,764


$
130,508


$
121,268Capital expendituresMicroelectronics

$
2,282


$
3,607


$
3,822Display


636



498



568Total capital expenditures

$
2,918


$
4,105


$
4,390Depreciation and amortization expenseMicroelectronics

$
2,255


$
2,435


$
2,304Display


1,630



1,725



1,763Total depreciation and amortization expense

$
3,885


$
4,160


$
4,067  78




---



##### Table of Contents



WHITE
    ELECTRONIC DESIGNS CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    Fiscal year 2007 reflects a non-cash intangible asset impairment
    charge of approximately $1.0 million for the
    microelectronic segment and $0.4 million for the display
    segment related to the customer relationships intangible asset
    in connection with a review for impairment in the fourth
    quarter. Fiscal year 2006 reflects a non-cash goodwill
    impairment charge of approximately $0.4 million for the
    display segment in connection with the review of goodwill for
    impairment in the third quarter. Fiscal year 2005 reflects a
    non-cash goodwill impairment charge of approximately
    $7.1 million for the microelectronic segment and
    $4.3 million for the display segment in connection with the
    annual review of goodwill for impairment.  17.
    SELECTED
    QUARTERLY FINANCIAL DATA (UNAUDITED)  Fiscal 2007Year


Sep 29


Jun 30


Mar 31


Dec 30(In thousand of dollars, except per share data)Net sales

$
104,237


$
26,520


$
28,465


$
27,232


$
22,020Gross profit

$
30,916


$
7,673


$
8,490


$
8,410


$
6,343Income (loss) before income taxes(1)

$
3,656


$
(118
)

$
2,020


$
1,666


$
88Net income

$
3,086


$
330


$
1,385


$
1,167


$
204Earnings per share-basic

$
0.13


$
0.01


$
0.06


$
0.05


$
0.01Earnings per share-diluted

$
0.13


$
0.01


$
0.06


$
0.05


$
0.01   Fiscal 2006Year


Sep 30


Jul 1


Apr 1


Dec 31(In thousand of dollars, except per share data)Net sales

$
108,928


$
29,726


$
26,944


$
27,379


$
24,879Gross profit

$
33,215


$
8,532


$
8,448


$
8,968


$
7,267Income before income taxes(2)

$
8,996


$
2,885


$
2,284


$
2,597


$
1,230Net income

$
6,013


$
2,029


$
1,459


$
1,716


$
809Earnings per share-basic

$
0.25


$
0.08


$
0.06


$
0.07


$
0.04Earnings per share-diluted

$
0.24


$
0.08


$
0.06


$
0.07


$
0.03     (1)
    
    The fourth quarter of fiscal year 2007 reflects a non-cash
    intangible asset impairment charge of approximately
    $1.0 million for the microelectronic segment and
    $0.4 million for the display segment related to the
    customer relationships intangible asset in connection with a
    review for impairment.(2)
    
    The third quarter of fiscal year 2006 reflects a non-cash
    goodwill impairment charge of approximately $0.4 million
    for the display segment in connection with the review of
    goodwill for impairment. 79




---



##### Table of Contents



Schedule II
  White
    Electronic Designs Corporation and Subsidiaries
    Valuation and Qualifying Accounts and Reserves
    Charged/Balance at


(Credited) to








BalanceBeginning


Costs and








at EndFiscal Year Ended

of Period


Expenses


Other


Deductions


of PeriodAccounts ReceivableSeptember 29, 2007

$
256


$
65


$



$
(21
)

$
300September 30, 2006

$
250


$
38


$



$
(32
)

$
256October 1, 2005

$
560


$
(36
)

$



$
(274
)

$
250  80




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description2
.1

Agreement and Plan of Merger dated May 3, 1998 by and among
    Bowmar Instrument Corporation and Electronic Designs, Inc. and
    Bravo Acquisition Subsidiary, Inc. (incorporated herein by
    reference to Exhibit 2 on
    Form 8-K
    filed May 6, 1998).2
.2

Amendment to Agreement and Plan of Merger dated June 9,
    1998 (incorporated herein by reference to Exhibit 2.1A on
    Form S-4
    filed June 11, 1998, Registration
    No. 333-56565).2
.3

Amendment to Agreement and Plan of Merger dated August 24,
    1998 (incorporated herein by reference to Exhibit 2.1B on
    Form S-4,
    filed September 2, 1998, Registration
    No. 333-56565).2
.4

Agreement and Plan of Reorganization dated as of
    January 22, 2003 by and among White Electronic Designs
    Corporation, IDS Reorganization Corp., and Interface Data
    Systems, Inc. (incorporated herein by reference to
    Exhibit 2.1 on
    Form 8-K
    filed January 24, 2003).2
.5

Agreement and Plan of Reorganization dated January 29,
    2001, by and among White Electronic Designs Corporation, PV
    Acquisition Corporation, Panelview, Inc. and Panelview Partners
    L.P. (incorporated herein by reference to Exhibit 10.29 on
    Form 10-Q,
    filed February 13, 2001).2
.6

Agreement and Plan of Merger dated September 26, 2006, by
    and between Interface Data Systems, Inc. and White Electronic
    Designs Corporation (incorporated herein by reference to
    Exhibit 2.6 on
    Form 10-K
    filed December 14, 2006).3
.1

Amended and Restated Articles of Incorporation of White
    Electronic Designs Corporation (incorporated herein by reference
    to Exhibit 3.1 on
    Form 10-K
    filed December 24, 1998).3
.2

Amended and Restated By-Laws of White Electronic Designs
    Corporation dated December 5, 2007 (incorporated herein by
    reference to
    Form 8-K
    filed December 7, 2007).4
.1

Shareholder Rights Agreement, effective December 6, 1996,
    (incorporated herein by reference to Exhibit 5(b) on
    Form 8-K,
    filed December 19, 1996).4
.2

Amendment No. 1 to Rights Agreement, effective as of
    May 3, 1998 (incorporated herein by reference to
    Exhibit 4.3 on
    Form S-4,
    filed June 11, 1998, Registration
    No. 333-56565).4
.3

Amendment No. 2 to Rights Agreement, effective
    December 5, 2006 (incorporated herein by reference to
    Exhibit 4.3 on
    Form 10-K,
    filed December 14, 2006).10
.1

Agreement to be Bound by Registration Rights Agreements, dated
    as of May 3, 1998, by and between Bowmar Instrument
    Corporation and Electronic Designs, Inc. (incorporated herein by
    reference to Exhibit 10.1 on
    Form S-4,
    filed Jun 11, 1998, Registration
    No. 333-56565).10
.2**

Agreement to be Bound by Severance Agreements and Employment
    Agreement, dated as of May 3, 1998, by and between Bowmar
    Instrument Corporation and Electronic Designs, Inc.
    (incorporated herein by reference to Exhibit 10.2 on
    Form S-4,
    filed June 11, 1998, Registration
    No. 333-56565).10
.3**

1994 Flexible Stock Plan (incorporated herein by reference to
    Exhibit A to the Companys definitive Proxy Statement
    prepared in connection with the 1994 Annual Meeting of
    Shareholders).10
.4**

Amendment to Companys 1994 Flexible Stock Plan, effective
    May 7, 2001 (incorporated herein by reference to
    Exhibit 99 on
    Form S-8,
    filed May 9, 2001, Registration
    No. 333-60544).10
.5

Rule 10b5-1
    Stock Purchase Plan, dated June 21, 2006 (incorporated by
    reference to Exhibit 10.3 on
    Form 10-Q,
    filed August 10, 2006).10
.6

Revolving Line of Credit Agreement with JPMorgan Chase Bank,
    N.A., dated April 3, 2007 (incorporated herein by reference
    to Exhibit 10.2 on
    Form 10-Q,
    filed May 10, 2007).10
.7**

White Electronic Designs Corporation 2001 Director Stock
    Plan (incorporated herein by reference to Exhibit 99 on
    Form S-8,
    filed May 9, 2001, Registration
    No. 333-60536).10
.8**

Amendment to Companys Stock Option Plan for Non-Employee
    Directors (incorporated herein by reference to Exhibit 99
    on
    Form S-8,
    filed May 9, 2001, Registration
    No. 333-60548). 81




---



##### Table of Contents



ExhibitNumber

Description10
.9**

White Electronic Designs Corporation 2000 Broad Based Employee
    Stock Option Plan (incorporated herein by reference to
    Exhibit 99 on
    Form S-8,
    filed May 9, 2001, Registration
    No. 333-60542).10
.10*
         **

Executive Employment Agreement made as of December 13, 2007
    between White Electronic Designs Corporation and Hamid R.
    Shokrgozar.10
.11**

Non-Qualified Stock Option Agreement between White Electronic
    Designs Corporation and Hamid Shokrgozar dated November 10,
    1999 (incorporated herein by reference to Exhibit 10.42 on
    Form 10-K
    filed December 23, 2002).10
.12

Industrial Real Estate Lease dated February 4, 1997 between
    Bowmar Instrument Corp., as tenant, and Allred Phoenix
    Properties, L.L.C., as landlord (incorporated herein by
    reference to Exhibit 10.5 on
    Form 10-K
    for the fiscal year ended September 27, 1997).10
.13

First Amendment to certain Industrial Real Estate Lease dated
    February 4, 1997 between White Electronic Designs
    Corporation (as successor-in-interest of Bowmar Instrument
    Corp.) and Gus Enterprises-XII, L.L.C. (as successor-in-interest
    of Allred Phoenix Properties, L.L.C.) dated November 5,
    2004 (incorporated herein by reference to Exhibit 10.21 to
    on
    Form 10-K
    filed December 16, 2004).10
.14**

2006 Director Restricted Stock Plan, effective
    March 24, 2006 (incorporated by reference to
    Exhibit 4.4 on
    Form S-8
    filed March 24, 2006, Registration
    No. 333-132688).10
.15**

First Amendment to 2006 Director Restricted Stock Plan,
    effective August 24, 2006 (incorporated by reference to
    Form 8-K
    filed August 30, 2006).10
.16**

Form of Restricted Stock Agreement to 2006 Director
    Restricted Stock Plan, effective August 24, 2006
    (incorporated by reference to
    Form 8-K
    filed August 30, 2006).10
.17**

Change of Control Agreement between Dante V. Tarantine and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated by reference to Exhibit 10.26 on
    Form 10-K,
    filed December 14, 2006).10
.18**

Change of Control Agreement between Roger A. Derse and White
    Electronic Designs Corporation, effective December 13, 2006
    (incorporated by reference to Exhibit 10.27 on
    Form 10-K,
    filed December 14, 2006).10
.19*

Form of Restricted Stock Units Award Agreement under the 1994
    Flexible Stock Plan.10
.20*

Form of Performance Share Award Agreement under the 1994
    Flexible Stock Plan.21
.1*

Subsidiaries of White Electronic Designs Corporation.23
.1*

Consent of Grant Thornton LLP.23
.2*

Consent of PricewaterhouseCoopers LLP.31
.1*

Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.31
.2*

Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.32
.1##

Certification Pursuant to 18 U.S. C. Section 1350, As
    Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act
    of 2002.32
.2##

Certification Pursuant to 18 U.S. C. Section 1350, As
    Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act
    of 2002.     *
    
    Filed herewith.**
    
    Management compensatory contract, plan or arrangement.##
    
    Furnished herewith. 82