SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
DC 20549
 
 FORM
10-Q
 
 
 QUARTERLY
REPORT UNDER SECTION 13 OR 15(d)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
 For the quarter ended
      June 30, 2008
              
              Commission File
      No.   0-19944M~WAVE,
      INC.(Exact
      name of registrant as specified in its charter)DELAWARE
              
              36-3809819(State
      or other jurisdiction of Incorporation or organization)
              
              (I.R.S.  Employer
      identification No.)1300 Norwood Ave. Itasca,
      Illinois
              
              60143(Address
      of principal executive offices)
              
              (Zip
      Code)Registrant’s
      telephone number including area code:
              
              (630)
      562-5550
 
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 and 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes TNo £
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):  Large Accelerated filer £Accelerated
filer £Non-Accelerated filer £Smaller
reporting company T
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes £No T
  The
registrant has 1,813,150 shares of common stock outstanding at August 13,
2008.
  
 1
  M-WAVE,
INC.
 
 CONTENTS
  
 PART
      I.  FINANCIAL INFORMATIONItem
      1.
              
              Financial
      Statements:Consolidated Balance Sheets as of June 30, 2008 and December
      31, 2007 (unaudited)
              
              Page
      3Consolidated Statements of Operations for the Three Months
      Ended June 30, 2008 and 2007 (unaudited)
              
              Page
      4Consolidated Statements of Operations for the Six Months Ended
      June 30, 2008 and 2007 (unaudited)
              
              Page
      5Consolidated Statements of Cash Flows for the Six Months Ended
      June 30, 2008 and 2007 (unaudited)
              
              Pages
      6Notes to Consolidated Financial Statements
      (unaudited)
              
              Pages
      7-13Item
      2.
              
              Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
              
              Pages
      13-22Item
      3.
              
              Quantitative and Qualitative Disclosures about Market
      Risk
              
              Page
      22Item
      4T.
              
              Controls and Procedures
              
              Page
      22-23PART
      II.  OTHER INFORMATIONItem
      1
              
              Legal Proceedings
              
              Page
      24Item
      1A
              
              Risk Factors
              
              Page
      24Item
      2
              
              Unregistered Sales of Equity Securities and Use of
      Proceeds
              
              Page
      24Item
      3
              
              Defaults Upon Senior Securities
              
              Page
      24Item
      4
              
              Submission of Matters to a Vote of Security
      Holders
              
              Page
      24Item
      5
              
              Other Information
              
              Page
      24Item
      6
              
              Exhibits
              
              Page
      24Signatures
              
              Page
      25
  2
 Table of Contents
  Part
I - Financial Information
 Item1 - Financial Statements
 
 M-Wave, Inc.
 CONSOLIDATED
BALANCE SHEETS
 (unaudited)
 
 June
      30,
              
              
              December
      31,2008
              
              
              2007ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
              
              $
              214,743
              
              
              $
              1,081,019Accounts
      receivable, net of allowance for doubtful accounts,2008- $80,000: 2007-
      $80,000
              
              
              1,322,316
              
              
              
              1,271,479Inventories,
      net
              
              
              2,138,277
              
              
              
              1,486,998Prepaid
      expenses and other assets
              
              
              101,060
              
              
              
              70,861Total
      current assets
              
              
              3,776,396
              
              
              
              3,910,357EQUIPMENT:Equipment
              
              
              424,910
              
              
              
              424,910Less
      accumulated depreciation
              
              
              (269,921
              )
              
              
              (230,051
              )Equipment,
      net
              
              
              154,989
              
              
              
              194,859TOTAL
              
              $
              3,931,385
              
              
              $
              4,105,216LIABILITIES AND
      STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Accounts
      payable
              
              $
              2,561,097
              
              
              $
              1,941,969Accrued
      expenses
              
              
              770,020
              
              
              
              713,256Total
      current liabilities
              
              
              3,331,117
              
              
              
              2,655,225COMMITTMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      EQUITY:Preferred
      stock, $100 par value; Series A authorized, 30,000 shares; issued and
      outstanding: 2008 and 2007: 12,500 shares
              
              
              656,800
              
              
              
              656,800Series
      B authorized, 70,000 shares; issued and outstanding:2008 and 2007: 69,648
      shares
              
              
              6,842,797
              
              
              
              6,842,797Common
      stock, $.005 par value; authorized, 200,000,000 shares; issued and
      outstanding 2008 and 2007: 1,813,150 shares
              
              
              11,236
              
              
              
              11,236Additional
      paid-in capital
              
              
              14,427,877
              
              
              
              14,427,683Accumulated
      deficit
              
              
              (19,053,272
              )
              
              
              (18,203,355
              )Treasury
      stock, at cost, 2008 and 2007: 433,954 shares
              
              
              (2,285,170
              )
              
              
              (2,285,170
              )Total
      stockholders' equity
              
              
              600,268
              
              
              
              1,449,991TOTAL
              
              $
              3,931,385
              
              
              $
              4,105,216
 
 See notes
to consolidated financial statements
  3
 Table of Contents
  M-Wave, Inc.
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (unaudited)
 
 Three
      Months Ended June 302008
              
              
              2007NET
      SALES
              
              $
              3,044,065
              
              
              $
              2,785,983COST
      OF GOODS SOLD
              
              
              2,384,291
              
              
              
              2,073,619Gross
      profit
              
              
              659,774
              
              
              
              712,364OPERATING
      EXPENSES:General
      and administrative
              
              
              671,454
              
              
              
              554,937Selling
      and marketing
              
              
              189,191
              
              
              
              210,666Total
      operating expenses
              
              
              860,645
              
              
              
              765,603Net
      loss
              
              $
              (200,871
              )
              
              $
              (53,239
              )Preferred
      stock dividends
              
              $
              (264,082
              )
              
              $
              0Net
      loss attributable to common shareholders
              
              $
              (464,953
              )
              
              $
              (53,239
              )BASIC
      AND DILUTED LOSS PER COMMON SHARE
              
              $
              (0.26
              )
              
              $
              (0.03
              )Weighted
      average shares outstanding
              
              
              1,813,150
              
              
              
              1,796,447
 
 See notes
to consolidated financial statements
 
  4
 Table of Contents
  M-Wave, Inc.
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (unaudited)
 
 Six
      Months Ended June 302008
              
              
              2007NET
      SALES
              
              $
              6,075,769
              
              
              $
              5,048,904COST
      OF GOODS SOLD
              
              
              4,584,083
              
              
              
              3,774,015Gross
      profit
              
              
              1,491,686
              
              
              
              1,274,889OPERATING
      EXPENSES:General
      and administrative
              
              
              1,386,598
              
              
              
              1,231,115Selling
      and marketing
              
              
              426,840
              
              
              
              423,732Total
      operating expenses
              
              
              1,813,438
              
              
              
              1,654,847Net
      loss
              
              $
              (321,752
              )
              
              $
              (379,958
              )Preferred
      stock dividends
              
              $
              (528,165
              )
              
              $
              0Net
      loss attributable to common shareholders
              
              $
              (849,917
              )
              
              $
              (379,958
              )BASIC
      AND DILUTED LOSS PER COMMON SHARE
              
              $
              (0.47
              )
              
              $
              (0.21
              )Weighted
      average shares outstanding
              
              
              1,813,150
              
              
              
              1,779,890
 
 See notes
to consolidated financial statements
  5
 Table of Contents
  M-Wave, Inc.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (unaudited)
 
 Six
      Months Ended June 302008
              
              
              2007OPERATING
      ACTIVITIES:Net
      loss
              
              $
              (321,752
              )
              
              $
              (379,958
              )Adjustments
      to reconcile net loss to net cash flows used in operating
      activities:Depreciation
              
              
              39,870
              
              
              
              44,534Stock
      compensation recognized on options and warrants
              
              
              194
              
              
              
              92,173Changes
      in assets and liabilities, net of effects of acquired
      business:Accounts
      receivable
              
              
              (50,837
              )
              
              
              79,979Inventories
              
              
              (651,279
              )
              
              
              (287,579
              )Prepaid
      expenses and other assets
              
              
              (30,199
              )
              
              
              (245,554
              )Accounts
      payable
              
              
              619,128
              
              
              
              (43,415
              )Accrued
      expenses
              
              
              (471,401
              )
              
              
              397,356Net
      cash flows used in operating activities
              
              
              (866,276
              )
              
              
              (342,464
              )INVESTING
      ACTIVITIES:Repayments
      on note receivable
              
              
              0
              
              
              
              6,836Net
      cash flows provided by investing activities
              
              
              0
              
              
              
              6,836FINANCING
      ACTIVITIES:Proceeds
      from exercise of stock options
              
              
              0
              
              
              
              88,000Payments
      on short and long term debt
              
              
              0
              
              
              
              (36,000
              )Net
      cash flows provided by financing activities
              
              
              0
              
              
              
              52,000NET
      (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              (866,276
              )
              
              
              (283,628
              )CASH
      AND CASH EQUIVALENTS:Beginning
      of period
              
              
              1,081,019
              
              
              
              1,696,340End
      of period
              
              $
              214,743
              
              
              $
              1,412,712SUPPLEMENTAL
      SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES:Accrued
      dividends preferred stock
              
              
              528,165
              
              
              
              0
 
 See notes
to consolidated financial statements
  6
 Table of Contents
  M-WAVE, Inc.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
 1.  Basis
of Presentation
 
 The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States of
America for interim financial information and with the instructions to Form
10-Q.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments necessary
for a fair presentation, consisting only of normal recurring adjustments, have
been included.
  Operating
results for the three and six months ended June 30, 2008 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2008.  For further information, refer to the financial statements and
footnotes thereto included in the Company’s annual report on Form 10-KSB for the
year ended December 31, 2007.
  7
 Table of Contents
  2.
Business Product Lines
 
 Sales by
product line for the three and six months ended June 30, 2008 and 2007 consisted
of the following:
 
 Three
      months ended June 30,
              
              
              Six
      months ended June 30,2008
              
              
              2007
              
              
              2008
              
              
              2007PCB
              
              $
              1,779,184
              
              
              $
              1,941,931
              
              
              $
              3,725,413
              
              
              $
              3,657,035Non
      PCB
              
              
              1,135,769
              
              
              
              769,679
              
              
              
              2,174,671
              
              
              
              1,227,394Other
              
              
              129,112
              
              
              
              74,373
              
              
              
              175,685
              
              
              
              164,475Total
      sales
              
              $
              3,044,065
              
              
              $
              2,785,983
              
              
              $
              6,075,769
              
              
              $
              5,048,904
 
 
 Sales
within the printed circuit board product line (“PCB”) include ten key customers,
which represented approximately 98% of sales in the second quarter of 2008
versus approximately 94% of sales in the second quarter of
2007.  Sales for the Company’s top ten PCB customers in the second
quarter were down approximately 5% compared to prior year. Year to date sales
for these key customers within the PCB product line represented approximately
98% of sales versus approximately 94% of year to date sales in
2007.  Year to date sales for the Company’s top ten PCB customers were
up approximately 6% compared to prior year to date sales.
  Non
printed circuit board (“Non PCB”) sales represent sales of new products, other
than printed circuit boards, to the Company’s existing customer
base.  Sales within the Non PCB product line include three primary
customers, which represented approximately 88% of sales of Non PCB products in
the second quarter of 2008 versus approximately 93% of sales in the second
quarter of 2007.  Sales for the Company’s top three Non PCB customers
were up approximately 40% compared to prior year’s sales.  Year to
date sales for these key Non PCB customers represented approximately 83% of
sales of non PCB products versus approximately 92% of year to date sales in
2007.  Year to date sales for the Company’s top three Non PCB
customers were up approximately 60% compared to prior year to date
sales.
  Other
sales primarily represent tooling charges billed to customers for either new
products or existing products that have gone through a revision and freight
costs billed to customers.
 
 The loss
of, or a substantial reduction in the orders from, the Company’s major customers
could have a material effect on the financial statements.
  8
 Table of Contents
  3.
Equity
 
 The
Series B stock is non-voting and is entitled to receive monthly dividends at an
annual rate of 15%, subject to reduction to 9% after the Registration Statement
is declared effective by the Securities and Exchange Commission. The Company is
to use its best efforts to file a registration statement covering the shares of
common stock underlying the Series B Convertible Preferred Stock (the
“Conversion Shares”), the shares of common stock underlying the Warrants (the
“Warrant Shares”), and the shares of common stock underlying the Series A
Preferred Stock issued by the Company to the Purchasers on June 17,
2004.  Mercator waived their dividend payments for the three and six
months ended June 30, 2007.  Dividends for the three and six months
ended June 30, 2008 of approximately $264,000 and $528,000 respectively, have
been accrued but unpaid, and are recorded as an accrued expense on the balance
sheet.
 
 During
the first six months of 2008 and 2007, M.A.G. Capital, LLC did not convert any
shares of their preferred stock into common shares.
 
 Each
share of outstanding Series A preferred stock is convertible into common shares
priced at $3.98 per share.  As of June 30, 2008, there were 12,500
outstanding shares of Series A preferred, which is convertible into
approximately 318,878 shares of common stock.  Each share of
outstanding Series B preferred stock is convertible into common shares priced at
$3.16 per share.  As of June 30, 2008, there were 69,648 outstanding
shares of Series B preferred, which is convertible into approximately 2,204,051
shares of common stock.  Both Series A and Series B preferred stock in
non-voting and was issued at a par value of $100 per share.
 
 Potentially
dilutive common shares consist of the incremental common shares issuable upon
conversion of convertible preferred shares, and the exercise of common stock
options and warrants for all periods.  For all periods ended June 30,
2008 and 2007, the basic and diluted shares reported are equal because the
common share equivalents are anti-dilutive due to the net losses for each
period.  Below is a tabulation of the potentially dilutive securities
for the periods ended June 30, 2008 and 2007:
 
 
 3
      months ended June 30,
              
              
              6
      months ended June 30,2008
              
              
              2007
              
              
              2008
              
              
              2007Weighted
      average shares outstanding
              
              
              1,813,150
              
              
              
              1,796,447
              
              
              
              1,813,150
              
              
              
              1,779,890Options
      in the money, net
              
              
              0
              
              
              
              31,706
              
              
              
              0
              
              
              
              50,228Warrants
      in the money, net
              
              
              0
              
              
              
              59,014
              
              
              
              0
              
              
              
              82,013Total
      Outstanding and PotentiallyDilutive
      shares
              
              
              1,813,150
              
              
              
              1,887,167
              
              
              
              1,813,150
              
              
              
              1,912,131
  9
 Table of Contents
  On July
12, 2007, the Board of Directors authorized a six month extension of M.A.G.
Capital’s warrants that were set to expire on July 23, 2007.  This
action extended the life of approximately 253,000 of approximately 320,000
warrants, all priced at $2.48, to January 23, 2008.  The value of the
warrants was determined using the Black-Scholes pricing model which calculated a
value of approximately $49,000 based on a fair value price of $0.19, assuming an
expected life of 6 months, a risk-free interest rate of 5.13%, volatility of
21.3%, and no dividend yield.  M.A.G. Capital had approximately 50,000
warrants that were set to expire on February 23, 2008, and approximately 17,000
warrants that were set to expire on June 16, 2008.
 
 On
January 19, 2008, the Board of Directors authorized an additional six month
extension of all warrants held by M.A.G. Capital, LLC, that were set to expire
on January 23, February 23, and June 16, 2008, respectively.  This
action extended the life of approximately 320,000 warrants, all priced at $2.48,
to July 23, August 23, and December 16, 2008, respectively.  The value
of the warrants was determined using the Black-Scholes pricing model which
calculated a value of approximately $193 based on a nominal fair value price,
assuming an expected life of 6 months, a risk-free interest rate of 3.66%,
volatility of 52.4%, and no dividend yield.    All warrants
owned by M.A.G. Capital are fully vested and exercisable as of June 30,
2008.
 
 On July
25, 2008, upon authorization by the Board of Directors, the Company agreed to
issue 440,000 warrants to the holders of the Series B Preferred Stock at $0.16
per share with a life of two years.  The closing price of the
Company’s stock on July 25, 2008 was $0.16.  The warrants are fully
vested and immediately exercisable.  The warrants were issued as
consideration for receiving a waiver of dividends by the holders of the
Company’s Series B Preferred Stock for the period beginning January 1, 2008
through the period ending December 31, 2009.
 
 4.
Litigation
 
 The
Company is not a party to any litigation whose outcome is expected to have a
material adverse effect on the financial position or results of operations of
the Company.
 
 5.
Share-Based Compensation
  The
Company has a stock option plan that authorizes the granting of options to
officers, key employees and directors to purchase the Company’s common stock at
prices equal to or above the market value of the stock at the date of
grant.  Under this plan, the Company has allocated virtually all
shares available for future grants as of June 30, 2008.  The exercise
price of all employee and director options granted in 2007 is above fair market
value.
  10
 Table of Contents
  Compensation
expense is recognized only for share-based payments expected to vest. We
estimate forfeitures at the date of grant based on our historical experience and
future expectations. Estimated forfeitures are expected to be minimal and not
material to the financial statements.
  Under
M-Wave’s share-based long-term incentive compensation plans (“incentive plans”)
M-Wave grants non-qualified stock options to certain employees.
  No
compensation expense related to options was recognized for the three and six
months ended June 30, 2008.  The Company recognized no compensation
expense for the three months ended June 30, 2007.  The Company
recognized share-based compensation expense related to options of approximately
$92,000 in general and administrative expenses in the statement of operations
for the six months ended June 30, 2007.  As of June 30, 2008, there
was no unrecognized compensation costs related to non-vested share-based
compensation arrangements granted under the incentive plans.  The
requisite service period for all outstanding options has been completed as of
June 30, 2008.
  For the
six months ended June 30, 2007, the Company issued 34,776
options.  These grants were priced at $3.41.  There were no
options granted for the six months ended June 30, 2008.  There were no
options exercised, nor did any expire during the six months ended June 30, 2008
and 2007, respectively.  For the six months ended June 30, 2008, there
were 32,875 options that were forfeited related to option holders that left the
Company.  There were no options forfeited during the six months ended
June 30, 2007.
  Total
common stock warrants outstanding at June 30, 2008 were 354,113, and were all
exercisable at June 30, 2008.  During the second quarter of 2007,
50,000 warrants priced at $1.76 were exercised.  The Company received
cash of approximately $88,000 and recorded an increase to common stock and
additional paid in capital.
 
 6.
Financial Instruments
 
 On
January 1, 2008, the Company adopted SFAS 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value, and
expands disclosures about fair value measurements.  However, the FASB
issued FSP SFAS 157-2 which deferred the effective date of SFAS 157, until the
beginning of our 2009 fiscal year, as it relates to fair value measurement
requirements for nonfinancial assets and liabilities that are not remeasured at
fair value on a recurring basis.  The adoption of SFAS 157 did not
affect the results of operations or cash flows from operations, investing, or
financing activities.
  11
 Table of Contents
  The fair
value framework requires the categorization of assets and liabilities into three
levels based upon the assumptions (inputs) used to price the assets or
liabilities.  Level 1 provides the most reliable measure of fair
value, whereas Level 3 generally requires significant management
judgment.  The three levels are defined as follows:
 £
              Level 1:Unadjusted
      quoted prices in active markets for identical assets and
      liabilities.
 £
              Level 2: Observable
      inputs other than those included in Level 1.  For example,
      quoted prices for similar assets or liabilities in active markets or
      quoted prices for identical assets or liabilities in inactive
      markets.
 £
              Level 3: Unobservable
      inputs reflecting management’s own assumptions about the inputs used in
      pricing the asset or liability.
 
 The
Company currently does not have any Level 1, Level 2 or Level 3 financial assets
or financial liabilities other than cash on hand for
operations.  Substantially all of the Company’s cash and cash
equivalents are held in demand deposits with its bank.  The fair value
of these assets is determined by deposit values and interest earned based in
stated bank rates.
 
 7.
Continuing Operations
 
 Currently
the Company is committed to growing its core business, as it relates to the
continuing operations of its PCB product line and other non-PCB components and
assemblies. However, if the Company is unable to secure adequate financing to
grow its core business, the Company may be forced to modify its business and
strategic plan.  Cash used during the second quarter was approximately
$430,000 and our cash balance as of June 30, 2008 was approcimately
$215,000.
 
 Due to
current cash availability combined with increases in our working capital, the
Company is searching for financing alternatives, but there can be no assurance
that financing can be found under acceptable terms to the Company.  If
the Company is unable to secure finances to fund operations, the Company may be
forced to curtail its plans to grow the business, resulting in possible decline
of revenues.  Under current conditions, the Company believes it will
have enough cash to sustain operations through the third quarter, but without
obtaining financing before the end of the year, the Company may be forced to
consider alternative strategies, including a potential liquidation of its
assets.
 
 8.
Reclassifications
 
 Certain
items in the 2007 consolidated financial statements have been reclassified to
conform to the 2008 presentation.
  12
 Table of Contents
  9.  New
Accounting Pronouncements
  In March
2008, the FASB issued SFAS 161, Disclosures about Derivative
Instruments and HedgingActivities, which amends SFAS
133.  SFAS 161 requires enhanced disclosures about an entity’s
derivative and hedging activities to discuss the underlying risks that an entity
intends to manage as well as accounting designation.  This statement
is effective for financial statements issued for fiscal years beginning after
November 15, 2008.  The Company does not believe that adoption of SFAS
161 will have a material effect on its consolidated financial
statements.
  In May
2008, the FASB issued SFAS 162, The Hierarchy
of Generally Accepted Accounting Principles. SFAS 162 is intended to
improve financial reporting by identifying a consistent framework, or hierarchy,
for selecting accounting principles to be used in the preparation of financial
statements of nongovernmental entities that are presented in conformity with
U.S. generally accepted accounting principles (GAAP). SFAS 162 directs the GAAP
hierarchy to the entity, not the independent auditors, as the entity is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS 162 is effective 60 days following
the Securities and Exchange Commission's approval of the Public Company
Accounting Oversight Board amendments to remove the GAAP hierarchy from the
auditing standards. The Company does not expect SFAS 162 to have a material
impact on its future consolidated results of operations or its financial
position.
  
 Item2:
 
 MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  We are a
value added service provider of high performance printed circuit boards used in
a variety of digital and high frequency communications applications for a
variety of commercial and industrial electronics applications. We satisfy our
customers’ requirements for telecommunications and industrial electronics
printed circuit boards, either rigid, flexible or bonded, by directly booking
orders, supervising and inspecting outsourced manufacture of such boards through
our global base of production partners located in China and Southeast Asia, and
domestically, through pre-screened production partners.
  Our
business model is referred to as Virtual Manufacturing. Through Virtual
Manufacturing we contractually supply a wide range of printed circuit board
needs of our customers, creating a “pipeline” between those customers and
production that covers early prototypes and pilot production, directly into mass
production, offering one seamless source. We deliver products when our customers
need them through consignment inventory control, demand pull, just in time, in
plant storehouses, supplier or vendor managed inventory and other supply-chain
programs.
  13
 Table of Contents
  We began
Virtual Manufacturing during 2000 by developing subcontracting relationships
with predominately Asian global manufacturers, from our base in Singapore. In
virtual manufacturing, we assume many of the pre and post-production services of
a manufacturer, while outsourcing the physical processes either adjunct to our
personnel or in relatively close proximity to assure the highest quality
fulfillment.
  Our
manufacturing partners maintain most certificates for quality, environmental and
safety, including ISO, QS, UL, CE and others. We believe our manufacturing
partners have a reputation for timely fulfillment of orders that are
competitively priced, shipped from modern plants operating with the highest
standards of worker and environmental safety both within and outside of the
United States.
  We market
our products through regional sales managers supported by independent sales
organizations.  Our base of approximately 50 customers represents a
highly sophisticated group of purchasers.
  In 2005,
we started to solicit new orders and extend our product lines to include custom
or engineered electronic products sourced from Asia on behalf of existing
accounts. These products are sourced and imported on a pan-Asian basis and cover
a broad range of components that include LED’s, wire bonding services,
harnesses, extruded housing products, and other customer specific
products.  This effort has been geared toward diversifying and
increasing our overall margins. Initially, we solicited existing customers, but
we also intend to solicit new accounts.  Our niche focuses in a higher
mix of products at lower volumes that larger scale distributors or brokers fail
to address.  Our customers tend to be smaller middle market companies
through midsize firms with little presence or capability in Asia that elect us
as their procurement partners.
 
 Significant
Events
 
 On April
1, 2008, the Company received a letter indicating that the NASDAQ Listing
Qualifications Hearings Panel has determined to delist the Company’s common
stock from The NASDAQ Stock Market LLC, and suspended trading in the Company’s
securities effective with the open of business on April 3, 2008.  The
NASDAQ Panel’s determination was based upon the Company’s non-compliance with
the minimum stockholders’ equity requirement for continued listing on The NASDAQ
Capital Market, as set forth in Marketplace Rule 4310(c)(3).
 
 The
Company’s securities are currently trading on the Over-the-Counter Bulletin
Board (“OTCBB”).  The Company believes that the delisting from the
NSADAQ exchange and subsequent listing on the OTCBB will not have a material
impact on its financial statements.
 
 On April
11, 2008, Jim Mayer, Interim Chief Executive Officer, notified the Company that
he was resigning to pursue other opportunities.  Mr. Mayer agreed to
assist the Company in an advisory role until August 15, 2008.
  14
 Table of Contents
  Pursuant
to Mr. Mayer’s resignation, the Board of Directors appointed Joe Turek, the
Company’s Chairman and Chief Operating Officer, as acting Chief Executive
Officer.
 
 On June
13, 2008, Jeff Figlewicz, Chief Financial Officer, resigned, but agreed to
assist the Company as Acting Chief Financial Officer as outlined in his
Consulting Agreement for the foreseeable future.
 
 On July
25, 2008, the Company received dividend waivers from the holders of its Series B
Preferred Stock.  The dividend waiver covers the period retroactive to
January 1, 2008 and continuing through the period ending December 31,
2009.  As consideration for this waiver, the Board of Directors of the
Company agreed to issue 440,000 warrants at $0.16 per share for two
years.  The closing price of the Company’s stock on July 25, 2008 was
$0.16.
 
 RESULTS
FOR THE THREE MONTHS ENDED JUNE 30, 2008 COMPARED TO THE THREE MONTHS ENDED JUNE
30, 2007
 
 Net
Sales
 
 Net sales
were approximately $3,044,000 for the three months ended June 30, 2008 versus
approximately $2,786,000 during the three months ended June 30, 2007, an
increase of approximately $258,000 or 9.3%.  Sales within our PCB
product line decreased approximately $163,000 during the second quarter of 2008,
a decrease of approximately 8% of prior year second quarter
sales.  Sales to our top ten PCB customers were approximately
$1,739,000 during the three months ended June 30, 2008, a decrease of
approximately $83,000 compared to the three months ended June 30,
2007.  Sales for our largest customer were approximately $104,000
below prior year levels.  Sales amongst our top ten PCB customers
represented approximately 98% of sales within this product line for the three
months ended June 30, 2008 compared to approximately 94% of sales within this
product line for the three months ended June 30, 2007.
 
 Sales
within our non-PCB product line were approximately $1,136,000 for the three
months ended June 30, 2008, approximately $366,000 above sales for the three
months ended June 30, 2007. As this line grows, we expect to achieve long-term
revenues to approach those currently experienced within our digital product
line.  The non-PCB sales recorded in the second quarter were on par
with sales recorded during the most recent quarters.  We continue to
focus our efforts on growing our core business and customer base, primarily by
concentrating efforts on expanding our customer base within our Non-PCB product
line.
 
 Other
revenues for the three months ended June 30, 2008 were approximately $129,000,
approximately $55,000 above other revenues recorded in the three months ended
June 30, 2007.  Other revenues primarily consist of tooling charges
for new and redesigned products, freight charges billed, and cash discounts
taken by customers for early payments, which are recorded as a reduction of
sales.    Tooling revenues for the second quarter of 2008
were approximately $74,000 above tooling revenues recorded during the second
quarter of 2007.
  15
 Table of Contents
  Gross
Profit and Cost of Goods Sold
 
 The
Company’s gross profit for the three months ended June 30, 2008 was
approximately $660,000, or 21.7% of net sales, compared to a gross profit of
approximately $712,000, or 25.6% of net sales, for the three months ended June
30, 2007.  Higher supplier costs due to raw materials increases and
increased freight costs due to higher fuel prices impacted the margin
performance during the second quarter of 2008.
 
 Operating
Expenses
 
 General
and administrative expenses were approximately $671,000 or 22.0% of net sales in
the second quarter of 2008 compared to approximately $555,000 or 19.9% of net
sales in the second quarter of 2007, an increase of approximately
$116,000.
 
 General
and administrative expenses consist primarily of salaries and benefits,
professional services, depreciation of office equipment and computer systems,
and occupancy expenses. In comparison to the second quarter of 2007, payroll
related expenses increased approximately $81,000 primarily related to increased
headcount within operations, hiring replacement personnel that have enhanced
abilities, and merit increases for existing personnel that had not received
increases in the prior year.   Professional services, which
include legal, auditing, and consulting fees, increased approximately $24,000 in
the second quarter of 2008 compared to prior year expenses.  Public
company related costs such as investor relations, Sarbanes-Oxley expenses, and
board and committee fees was down approximately $79,000 for the second quarter
of 2008 compared to prior year expenses.  Primary reason for the
decrease was an expense recovery of approximately $195,000 in the second quarter
of 2008 related to cost adjustments associated with the failed Blue Sun
transaction.  We recorded no stock compensation expenses during the
second quarter of 2008 or 2007.  Other operating expenses increased
approximately $90,000 during the second quarter of 2008 compared to the second
quarter of 2007.  These expenses include travel, telephone, insurance,
depreciation, and rent.  Primary drivers in the increased expense
related to moving expenses related to our facility move of approximately
$33,000, higher rent costs in our new facility of approximately $12,000, and
higher travel costs of approximately $22,000.
 
 Selling
and marketing expenses were approximately $189,000 or 6.2% of net sales in the
second quarter of 2008 compared to approximately $211,000 or 7.6% of net sales
in the second quarter of 2007.  Selling and marketing expenses include
the cost of salaries, advertising and promotion of the Company’s products, and
commissions paid to independent sales organizations. In comparison to the second
quarter of 2007, commission paid to independent sales organizations decreased by
approximately $9,000; payroll-related expenses increased by approximately
$2,000. Costs related to our Singapore office decreased by approximately
$11,000; other sales expenses, including travel related expenses decreased by
approximately $4,000 in the second quarter of 2008 compared to the second
quarter of 2007.
  16
 Table of Contents
  Operating
Loss
 
 Operating
loss from continuing operations was approximately $201,000 in the second quarter
of 2008 compared to an operating loss of approximately $53,000 in the second
quarter of 2007. The increase in operating loss of approximately $148,000 was
primarily related to increased administrative expenses detailed
above.
 
 Interest
Income
 
 We
recorded no interest income during the second quarter of 2008 or
2007.
 
 Interest
Expense
  We
recorded no interest expense during the second quarter of 2008 or
2007.
  Preferred
Stock Dividends
 
 We
recorded preferred stock dividends in the second quarter of 2008 of
approximately $264,000.  The Company recorded no preferred stock
dividends during the second quarter of 2007.  In the prior year, we
received a waiver of dividends from M.A.G. Capital, LLC.  Dividends
relate to the issuance of Series B preferred stock to M.A.G. Capital, LLC, and
its affiliates.  These dividends have been accrued, but not paid, and
are recorded on the balance sheet as an accrued expense in the current liability
section.
 
 RESULTS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
2007
 
 Net
Sales
 
 Net sales
were approximately $6,076,000 for the six months ended June 30, 2008 versus
approximately $5,049,000 during the six months ended June 30, 2007, an increase
of approximately $1,027,000 or 20.3%.  Sales within our PCB product
line increased approximately $68,000 during the first six months of 2008, an
increase of approximately 1.8% of prior year sales.  Sales to our top
ten PCB customers were approximately $3,636,000 during the six months ended June
30, 2008, an increase of approximately $206,000 compared to the six months ended
June 30, 2007.  Sales amongst our top ten PCB customers represented
approximately 98% of sales within this product line for the six months ended
June 30, 2008 compared to approximately 94% of sales within this product line
for the six months ended June 30, 2007.
  17
 Table of Contents
  Sales
within our non-PCB product line were approximately $2,175,000 for the six months
ended June 30, 2008, approximately $948,000 above sales for the six months ended
June 30, 2007. As this line grows, we expect to achieve long-term revenues to
approach those currently experienced within our digital product
line.    We continue to focus our efforts on growing our
core business and customer base, primarily by concentrating efforts on expanding
our customer base within our Non-PCB product line.
 
 Other
revenues for the six months ended June 30, 2008 were approximately $176,000,
approximately $12,000 above other revenues recorded in the six months ended June
30, 2007.  Other revenues primarily consist of tooling charges for new
and redesigned products, freight charges billed, and cash discounts taken by
customers for early payments, which are recorded as a reduction of
sales.
 
 Gross
Profit and Cost of Goods Sold
 
 The
Company’s gross profit for the six months ended June 30, 2008 was approximately
$1,492,000, or 24.5% of net sales, compared to a gross profit of approximately
$1,275,000, or 25.2% of net sales, for the six months ended June 30,
2007.  Higher supplier costs due to raw materials increases and
increased freight costs due to higher fuel prices impacted the margin
performance during the second quarter of 2008, and are expected to have a
negative impact on margins for the remainder of the year.
 
 Operating
Expenses
 
 General
and administrative expenses were approximately $1,387,000 or 22.8% of net sales
in the first six months of 2008 compared to approximately $1,231,000 or 24.3% of
net sales in the first six months of 2007, an increase of approximately
$156,000.
 
 General
and administrative expenses consist primarily of salaries and benefits,
professional services, depreciation of office equipment and computer systems,
and occupancy expenses. In comparison to the first six months of 2007, payroll
related expenses increased
approximately $95,000 primarily related to increased headcount within
operations, hiring replacement personnel that have enhanced abilities, and merit
increases for existing personnel that had not received increases in the prior
year.   Professional services, which include legal, auditing, and
consulting fees, increased approximately $37,000 in the first six months of 2008
compared to prior year expenses.  Public company related costs such as
investor relations, Sarbanes-Oxley expenses, and board and committee fees was
approximately $165,000 in the first six months of 2008 compared to approximately
$178,000 during the first six months of 2007, a decreaseof approximately
$13,000.We recorded $194 of stock compensation
expenses during the first six months of 2008 compared to approximately $92,000
during the first six months of 2007.  Other operating expenses
increased approximately $129,000during the first six months of 2008 compared to the first six months of
2007.  These expenses include travel, telephone, insurance,
depreciation, and rent.  Primary drivers in the increased expense
related to moving expenses related to our facility move of approximately
$43,000, higher rent costs in our new facility of approximately $13,000, higher
business insurance costs of approximately $28,000 due to a prior year refund,
and higher travel costs of approximately $18,000.
  18
 Table of Contents
  Selling
and marketing expenses were approximately $427,000 or 7.0% of net sales in the
first six months of 2008 compared to approximately $424,000 or 8.4% of net sales
in the first six months of 2007.  Selling and marketing expenses
include the cost of salaries, advertising and promotion of the Company’s
products, and commissions paid to independent sales organizations. In comparison
to the first six months of 2007, commission paid to independent sales
organizations increased by approximately $14,000; payroll-related expenses
decreased by approximately $2,000. Costs related to our Singapore office
decreased by approximately $13,000; other sales expenses, including travel
related expenses increased by approximately $4,000 in the first six months of
2008 compared to the first six months of 2007.
 
 Operating
Loss
 
 Operating
loss from continuing operations was approximately $322,000 in the first six
months of 2008 compared to an operating loss of approximately $380,000 in the
first six months of 2007. The decrease in operating loss of approximately
$58,000 was primarily related to increased gross margin dollars related to
higher sales levels.
 
 Interest
Income
 
 We
recorded no interest income during the first six months of 2008 or
2007.
 
 Interest
Expense
  We
recorded no interest expense during the first six months of 2008 or
2007.
  Preferred
Stock Dividends
 
 We
recorded preferred stock dividends in the first six months of 2008 of
approximately $528,000.  The Company recorded no preferred stock
dividends during the first six months of 2007.  In the prior year, we
received a waiver of dividends from M.A.G. Capital, LLC.  Dividends
relate to the issuance of Series B preferred stock to M.A.G. Capital, LLC, and
its affiliates.  These dividends have been accrued, but not paid, and
are recorded on the balance sheet as an accrued expense in the current liability
section.
  Liquidity
and Capital Resources
 
 Net cash
used by operations was approximately $866,000 for the first six months of 2008
compared to approximately $342,000 used by operations for the first six months
of 2007.   Cash used during the second quarter was approximately
$430,000 and our cash balance as of June 30, 2008 was approximately
$215,000.
  19
 Table of Contents
  Accounts
Receivable increased approximately $51,000 due to higher sales levels.
Inventories increased approximately $651,000 related to higher inventory levels
to support increased sales levels and new stocking programs with key customers.
Accounts Payable increased approximately $619,000 primarily due to the higher
inventory levels.
 
 Net cash
provided by investing activities was $0 for the first six months of 2008
compared to approximately $7,000 in the first six months of 2007. Capital
expenditures were $0 in the first six months of 2008 and 2007.
 
 Net cash
provided by financing activities was $0 during the first six months of 2008
compared to approximately $52,000 provided by financing activities during the
first six months of 2007 related to payments on our note payable for equipment
acquired in 2006 and proceeds from exercise of stock options by a former
employee.
 
 Currently
the Company is committed to growing its core business, as it relates to the
continuing operations of its PCB product line and other non-PCB components and
assemblies. However, if the Company is unable to secure adequate financing to
grow its core business, the Company may be forced to modify its business and
strategic plan.
 
 Due to
current cash availability combined with increases in our working capital, the
Company is searching for financing alternatives, but there can be no assurance
that financing can be found under acceptable terms to the Company.  If
we are unable to secure finances to fund operations, we may be forced to curtail
our plans to grow the business, resulting in possible decline of
revenues.  Under current conditions, we believe we will have enough
cash to sustain operations through the third quarter, but without obtaining
financing before the end of the year, the Company may be forced into liquidating
its assets.
 
 Credit
Environment
 
 In fiscal
year 2008, the credit markets continue to be volatile and have experienced a
shortage in overall liquidity due to the instability in the sub−prime lending
industry and various investment securities. The Company does not engage in any
business activities in the mortgage industry or hold its cash positions in any
accounts other than demand deposits and cash equivalents. Sales are to a wide
range of diverse commercial industries including electronic devices for
municipal and governmental products, industrial components, and consumer
products. However, if these customers reduce their spending as a result of the
difficulties in the credit markets, it is possible revenues could
decline.
  20
 Table of Contents
  Off-Balance
Sheet Arrangements
 
 The
Company has not created, nor is a party to, any special-purpose or off-balance
sheet entities for the purposes of raising capital, incurring debt, or operating
our business.  The Company does not have any off-balance sheet
arrangements or relationships with entities that are not consolidated into our
financial statements that are reasonably likely to materially affect our
liquidity or the availability of capital resources.
 
 Inflation
 
 During
the second quarter of 2008, the Company began experiencing price increases from
suppliers in Asia due to the devaluation of the dollar and higher material
costs.  These supplier price increases, averaging approximately 4%,
have had a material effect on the Company’s operations and financial position in
the second quarter of 2008, and are expected to continue for the remainder of
2008, if the Company is unable to pass through those increases under its present
contracts.
 
 Foreign
Currency Transactions
 
 All of
the Company’s foreign transactions are negotiated, invoiced and paid in United
States dollars.
 
 Risk
Factors Affecting Business and Results of Operations
 
 This
report, as well as our other reports filed with the SEC, our press releases, and
other communications contain forward-looking statements made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of 1995.
Forward-looking statements include all statements regarding our expected
financial position, results of operations, cash flows, dividends, financing
plans, strategy, budgets, capital and other expenditures, competitive positions,
growth opportunities, benefits from new technology, plans and objectives of
management, and markets for stock. These forward-looking statements are based
largely on our expectations and, like any other business, are subject to a
number of risks and uncertainties, many of which are beyond our control. The
risks include those stated in the section entitled "Risk Factors Affecting
Business and Results of Operations" at the end of Item 6 of our Annual Report on
Form 10-KSB and economic, competitive and other factors affecting our
operations, markets, products and services, expansion strategies and other
factors discussed elsewhere in this report, our Annual Report on Form 10-KSB and
the other documents we have filed with the Securities and Exchange Commission,
as well as the following paragraphs below.
 
 In light
of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this report will in fact prove
accurate, and our actual results may differ materially from the forward-looking
statements.
  21
 Table of Contents
  Due to
the delisting of our common stock from the NASDAQ Capital Markets, our common
stock is currently trading on the over-the-counter bulletin board, which may
have an adverse impact on the market price and liquidity of our common
stock.   Based on the market capitalization and trading volume of
the Company’s common stock as well as other risk factors and related disclosures
in our Annual Report on Form 10-KSB for the year ended December 31, 2007, the
Company does not believe that the delisting has any material impact on the
Company’s operations, liquidity, or cash flows.
 
 Item3: Quantitative and Qualitative Disclosure About Market
Risks
  Not
applicable.
  Item4T: Controls and Procedures.
  Our
management has evaluated the effectiveness of our disclosure controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) as of the
end of the period covered by this Report. Based on that evaluation, we have
concluded that as of the end of the period covered by this quarterly report, our
disclosure controls and procedures are effective at a reasonable assurance level
in ensuring that information required to be disclosed by us in our reports is
recorded, processed, summarized and reported within the required time
periods.
  In
designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost−benefit relationship of possible controls and
procedures.
  Our Chief
Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), are responsible
for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)
  Internal
control over financial reporting is promulgated under the Exchange Act as a
process designed by, or under the supervision of, our CEO and CFO and effected
by our board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures
that:
  Pertain
to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of our assets;
  22
 Table of Contents
  Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and directors;
and
  Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition or disposition of our assets that could have a material effect on
the financial statements.
  The
Company’s management made an initial assessment as defined in Rule 13a-15(f) of
the Securities Exchange Act of 1934, and determined that a material weakness
within its internal control over financial reporting exists.  The
limited financial resources do not allow for discretionary new
personnel.  Accordingly, this material weakness includes internal
control deficiencies attributed to the segregation of duties. As a result,
management has determined that its internal controls over financial reporting
are not effective.  While management believes the financial reports
included in this Report fairly represent the financial condition of the Company,
due to the Company’s inability to evaluate its internal controls over financial
reporting based on the framework developed by COSO, there is no guarantee that
the financial reports accurately represent our financial condition.
  The
Company has begun to take appropriate steps to remediate the material weakness
described above. The Company has hired a Sarbanes-Oxley consultant to review and
assist in strengthening our internal controls over financial reporting. The
Company expects to initiate these remediation efforts in the second half of
2008, assuming financial resources are available. The effectiveness of our
internal controls following our remediation efforts will not be known until we
test those controls in connection with management’s tests of internal control
over financial reporting that will be performed when the Company has the
financial resources to perform the evaluation.
  This
Report does not include an attestation report of our registered public
accounting firm regarding our internal controls over financial reporting. The
disclosure contained under this Item 4T was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only the disclosure under this Item 4T in this
Report.
  Changes In Internal
Controls.
 
 There was
no change in the Company's internal control over financial reporting during the
three and six months ended June 30, 2008 that has materially affected, or is
reasonably likely to materially affect, its internal control over financial
reporting.
  23
 Table of Contents
  Part II - Other
Information
 
 Item1:  Legal Proceedings
 
 None
 
 Item1A:  Risk Factors
 
 The
Company has not identified any material changes from risk factors as previously
disclosed in its Annual Report on Form 10-KSB as filed for the year ended
December 31, 2007.
 
 Item2:  Unregistered Sales of Equity Securities and Use
of Proceeds
 
 None
 
 Item3:  Defaults Upon Senior Securities
 
 None
 
 Item4:  Submission of Matters to a Vote of Security
Holders
 
 None
 
 Item5:  Other Information
 
 None
 
 Item6: Exhibits
 
 (a)
              Exhibits
 
 31.1
              Certification
      of the CEO pursuant to Section 302 of the Sarbanes-Oxley
    Act.
 
 31.2
              Certification
      of the CFO pursuant to Section 302 of the Sarbanes-Oxley
    Act.
 
 32.1
              Certification
      pursuant to 18 U.S.C. Section 135O, as adopted pursuant to section 906 of
      the Sarbanes-Oxley Act of 2002.
 
 32.2
              Certification
      pursuant to 18 U.S.C. Section 135O, as adopted pursuant to section 906 of
      the Sarbanes-Oxley Act of 2002.
  24
 Table of Contents
  SIGNATURE
 Pursuant to the requirements of the
Securities and Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
 
 M~WAVE, Inc.Date:
      August 13, 2008
              
              /s/    Jeff
      FiglewiczJeff
      FiglewiczActing
      Chief Financial Officer
 
 
 Exhibit
      IndexExhibitNo.
              
              Description
              
              Location10.1
              
              Industrial
      Building Lease between M-Wave Inc., and 1300 Norwood Associates LLC, dated
      February 27, 2008
              
              110.2
              
              Separation
      Agreement and Release between M-Wave, Inc. and Jim Mayer dated April 14,
      2008
              
              210.3
              
              Consulting
      Agreement between M-Wave, Inc. and Jim Mayer dated April 14,
      2008
              
              210.4
              
              Separation
      Agreement and Release between M-Wave, Inc. and Jeff Figlewicz dated June
      13, 2008
              
              310.5
              
              Consulting
      Agreement between M-Wave, Inc. and Jeff Figlewicz dated June 13,
      2008
              
              331.1
              
              Certification
      of the CEO Pursuant to Sections 302 of the Sarbanes-Oxley
    Act
              
              Filed
      Herewith31.2
              
              Certification
      of the CFO Pursuant to Sections 302 of the Sarbanes-Oxley
    Act
              
              Filed
      Herewith32.1
              
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act
              
              Filed
      Herewith32.2
              
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act
              
              Filed
      Herewith(1)
              
              Incorporated
      herein by reference to the applicable exhibit to the Registrant's form 8-K
      filed March 6, 2008(2)
              
              Incorporated
      herein by reference to the applicable exhibit to the Registrant's form 8-K
      filed April 17, 2008(3)
              
              Incorporated
      herein by reference to the applicable exhibit to the Registrant's form 8-K
      filed June 13, 2008






25