UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q




(Mark
One)


xQUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
quarterly period ended November 28, 2008




OR


oTRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
transition period from
______________________________to_____________________________




Commission
file No. 0-11003




WEGENER
CORPORATION





(Exact
name of registrant as specified in its charter)


Delaware
                
                81–0371341(State
      or other jurisdiction
                
                (I.R.S.
      Employerof
      incorporation or organization)
                
                Identification
      No.)11350
      Technology Circle, Johns Creek, Georgia
                
                30097-1502(Address
      of principal executive offices)
                
                (Zip
      Code)





Registrant's telephone number,
including area code:  (770) 623-0096




Registrant’s
web site:  HTTP://WWW.WEGENER.COM





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days:  Yes xNo o





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 fileroAccelerated fileroNon-accelerated
fileroSmaller reporting
companyx








Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes
oNo x





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:








Common Stock, $.01 par
value
              
              12,647,051 SharesClass
              
              Outstanding
      at December 29, 2008








WEGENER
CORPORATION AND SUBSIDIARIES


Form
10-Q For the Quarter Ended November 28, 2008





INDEX





PagePART
      I.  Financial InformationItem
      1.
                        Financial
      StatementsIntroduction
                        3Consolidated
      Statements of Operations
                          (Unaudited)
      - Three Months Ended
                          November
      28, 2008 and November 30, 2007
                        4Consolidated
      Balance Sheets – November 28,
                          2008
      (Unaudited) and August 29, 2008
                        5Consolidated
      Statements of Shareholders' Equity
                          (Unaudited)
      - Three Months Ended November 28,
                          2008
      and November 30, 2007
                        6Consolidated
      Statements of Cash Flows
                          (Unaudited)
      - Three Months Ended November 28,
                          2008
      and November 30, 2007
                        7Notes
      to Consolidated Financial
                          Statements
      (Unaudited)
                        8Item
      2.
                        Management's
      Discussion and Analysis of Financial
                          Condition
      and Results of Operations
                        17Item
      3.
                        Quantitative
      and Qualitative Disclosures About Market Risk
                        23Item
      4.
                        Controls
      and Procedures
                        23Item
      4T.
                        Controls
      and Procedures
                        23PART
      II.  Other InformationItem
      1A.
                        Risk
      Factors
                        23Item
      6.
                        Exhibits
                        24Signatures
                        25





2


PART I.  FINANCIAL
INFORMATION





Item 1.  Financial
Statements








INTRODUCTION
- CONSOLIDATED FINANCIAL STATEMENTS








The
consolidated financial statements included herein have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. The
consolidated balance sheet as of November 28, 2008; the consolidated statements
of shareholders' equity as of November 28, 2008 and November 30, 2007; the
consolidated statements of operations for the three months ended November 28,
2008 and November 30, 2007; and the consolidated statements of cash flows for
the three months ended November 28, 2008 and November 30, 2007 have been
prepared without audit. The consolidated balance sheet as of August 29, 2008 has
been audited by independent registered public accountants. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures herein are adequate to make the information presented not
misleading. It is suggested that these consolidated financial statements be read
in conjunction with the financial statements and the notes thereto included in
the Company's Annual Report on Form 10-K for the fiscal year ended August 29,
2008, File No. 0-11003.





In the
opinion of management of the Company, the statements for the unaudited interim
periods presented include all adjustments, which were of a normal recurring
nature, necessary to present a fair statement of the results of such interim
periods. The results of operations for the interim periods presented are not
necessarily indicative of the results of operations for the entire
year.





3


WEGENER
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)








Three
      months endedNovember
      28,
                                                      2008
                                                    
                                                    
                                                    November
      30,
                                                      2007Revenues,
      net
                                                    
                                                    $
                                                    2,322,778
                                                    
                                                    
                                                    $
                                                    5,025,929Operating
      costs and expensesCost
      of products sold
                                                    
                                                    
                                                    1,698,415
                                                    
                                                    
                                                    
                                                    2,962,739Selling,
      general, and administrative
                                                    
                                                    
                                                    1,169,682
                                                    
                                                    
                                                    
                                                    1,263,517Research
      and development
                                                    
                                                    
                                                    608,621
                                                    
                                                    
                                                    
                                                    809,037Operating
      costs and expenses
                                                    
                                                    
                                                    3,476,718
                                                    
                                                    
                                                    
                                                    5,035,293Operating
      loss
                                                    
                                                    
                                                    (1,153,940
                                                    )
                                                    
                                                    
                                                    (9,364
                                                    )Interest
      expense
                                                    
                                                    
                                                    (38,928
                                                    )
                                                    
                                                    
                                                    (41,706
                                                    )Other
      income
                                                    
                                                    
                                                    129
                                                    
                                                    
                                                    
                                                    563Net
      loss
                                                    
                                                    $
                                                    (1,192,739
                                                    )
                                                    
                                                    $
                                                    (50,507
                                                    )Net
      loss per share:Basic
                                                    
                                                    $
                                                    (.09
                                                    )
                                                    
                                                    $
                                                    
                                                    *Diluted
                                                    
                                                    $
                                                    (.09
                                                    )
                                                    
                                                    $
                                                    
                                                    *Shares
      used in per share calculationBasic
                                                    
                                                    
                                                    12,647,051
                                                    
                                                    
                                                    
                                                    12,647,051Diluted
                                                    
                                                    
                                                    12,647,051
                                                    
                                                    
                                                    
                                                    12,647,051





* Less
than $ (0.01) per share





See
accompanying notes to consolidated financial statements.





4


WEGENER
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS








November
      28,
                                                      2008
                                                      (Unaudited)
                                                    
                                                    
                                                    August
      29,
                                                      2008AssetsCurrent
      assetsCash
                                                    
                                                    $
                                                    9,945
                                                    
                                                    
                                                    $
                                                    8,023Accounts
      receivable, net
                                                    
                                                    
                                                    1,906,018
                                                    
                                                    
                                                    
                                                    2,963,060Inventories,
      net
                                                    
                                                    
                                                    6,396,784
                                                    
                                                    
                                                    
                                                    6,295,476Other
                                                    
                                                    
                                                    212,503
                                                    
                                                    
                                                    
                                                    211,832Total
      current assets
                                                    
                                                    
                                                    8,525,250
                                                    
                                                    
                                                    
                                                    9,478,391Property
      and equipment, net
                                                    
                                                    
                                                    1,617,863
                                                    
                                                    
                                                    
                                                    1,709,250Capitalized
      software costs, net
                                                    
                                                    
                                                    1,221,099
                                                    
                                                    
                                                    
                                                    1,217,585Other
      assets
                                                    
                                                    
                                                    420,126
                                                    
                                                    
                                                    
                                                    454,050Land
      held for sale
                                                    
                                                    
                                                    353,712
                                                    
                                                    
                                                    
                                                    353,712Total
      assets
                                                    
                                                    $
                                                    12,138,050
                                                    
                                                    
                                                    $
                                                    13,212,988Liabilities
      and Shareholders’ EquityCurrent
      liabilitiesBank
      line of credit
                                                    
                                                    $
                                                    3,314,405
                                                    
                                                    
                                                    $
                                                    1,883,243Accounts
      payable
                                                    
                                                    
                                                    1,295,847
                                                    
                                                    
                                                    
                                                    1,971,379Accrued
      expenses
                                                    
                                                    
                                                    1,538,934
                                                    
                                                    
                                                    
                                                    1,871,887Deferred
      revenue
                                                    
                                                    
                                                    545,050
                                                    
                                                    
                                                    
                                                    771,521Customer
      deposits
                                                    
                                                    
                                                    1,849,162
                                                    
                                                    
                                                    
                                                    1,927,567Total
      current liabilities
                                                    
                                                    
                                                    8,543,398
                                                    
                                                    
                                                    
                                                    8,425,597Commitments
      and contingenciesShareholders’
      equityCommon
      stock, $.01 par value; 20,000,000 shares authorized; 12,647,051 shares
      issued and outstanding
                                                    
                                                    
                                                    126,471
                                                    
                                                    
                                                    
                                                    126,471Additional
      paid-in capital
                                                    
                                                    
                                                    20,006,702
                                                    
                                                    
                                                    
                                                    20,006,702Deficit
                                                    
                                                    
                                                    (16,538,521
                                                    )
                                                    
                                                    
                                                    (15,345,782
                                                    )Total
      shareholders’ equity
                                                    
                                                    
                                                    3,594,652
                                                    
                                                    
                                                    
                                                    4,787,391Total
      liabilities and shareholders’ equity
                                                    
                                                    $
                                                    12,138,050
                                                    
                                                    
                                                    $
                                                    13,212,988





See
accompanying notes to consolidated financial statements.




5


WEGENER
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY





(Unaudited)








Common Stock
                                            
                                            
                                            Additional
                                              Paid-inShares
                                            
                                            
                                            Amount
                                            
                                            
                                            Capital
                                            
                                            
                                            DeficitBalance
      at August 31, 2007
                                            
                                            
                                            12,647,051
                                            
                                            
                                            $
                                            126,471
                                            
                                            
                                            $
                                            19,999,022
                                            
                                            
                                            $
                                            (15,729,065
                                            )Net
      loss for the three months
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (50,507
                                            )BALANCE
      at November 30, 2007
                                            
                                            
                                            12,647,051
                                            
                                            
                                            $
                                            126,471
                                            
                                            
                                            $
                                            19,999,022
                                            
                                            
                                            $
                                            (15,779,572
                                            )Balance
      at August 29, 2008
                                            
                                            
                                            12,647,051
                                            
                                            
                                            $
                                            126,471
                                            
                                            
                                            $
                                            20,006,702
                                            
                                            
                                            $
                                            (15,345,782
                                            )Net
      loss for the three months
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (1,192,739
                                            )BALANCE
      at November 28, 2008
                                            
                                            
                                            12,647,051
                                            
                                            
                                            $
                                            126,471
                                            
                                            
                                            $
                                            20,006,702
                                            
                                            
                                            $
                                            (16,538,521
                                            )





See
accompanying notes to consolidated financial statements.





6


WEGENER
CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)




Three
      months endedNovember
      28,
                                                          2008
                                                        
                                                        
                                                        November
      30,
                                                          2007Cash
      flows from operating activitiesNet
      loss
                                                        
                                                        $
                                                        (1,192,739
                                                        )
                                                        
                                                        $
                                                        (50,507
                                                        )Adjustments
      to reconcile net loss to cash (used for) provided by operating
      activitiesDepreciation
      and amortization
                                                        
                                                        
                                                        382,138
                                                        
                                                        
                                                        
                                                        465,276Provision
      for inventory reserves
                                                        
                                                        
                                                        15,000
                                                        
                                                        
                                                        
                                                        -Provision
      for bad debts
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        15,000Changes
      in assets and liabilitiesAccounts
      receivable
                                                        
                                                        
                                                        1,057,042
                                                        
                                                        
                                                        
                                                        1,402,580Inventories
                                                        
                                                        
                                                        (116,308
                                                        )
                                                        
                                                        
                                                        (814,225
                                                        )Other
      assets
                                                        
                                                        
                                                        (671
                                                        )
                                                        
                                                        
                                                        23,743Accounts
      payable
                                                        
                                                        
                                                        (675,531
                                                        )
                                                        
                                                        
                                                        1,068,929Accrued
      expenses
                                                        
                                                        
                                                        (332,953
                                                        )
                                                        
                                                        
                                                        (480,018
                                                        )Deferred
      revenue
                                                        
                                                        
                                                        (226,471
                                                        )
                                                        
                                                        
                                                        (123,514
                                                        )Customer
      deposits
                                                        
                                                        
                                                        (78,405
                                                        )
                                                        
                                                        
                                                        (55,529
                                                        )Net
      cash (used for) provided by operating activities
                                                        
                                                        
                                                        (1,168,898
                                                        )
                                                        
                                                        
                                                        1,451,735Cash
      flows from investment activitiesProperty
      and equipment expenditures
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        (36,014
                                                        )Capitalized
      software additions
                                                        
                                                        
                                                        (254,150
                                                        )
                                                        
                                                        
                                                        (193,125
                                                        )License
      agreement, patent, and trademark expenditures
                                                        
                                                        
                                                        (6,192
                                                        )
                                                        
                                                        
                                                        (466
                                                        )Net
      cash used for investing activities
                                                        
                                                        
                                                        (260,342
                                                        )
                                                        
                                                        
                                                        (229,605
                                                        )Cash
      flows from financing activitiesNet
      change in borrowings under revolving line of credit
                                                        
                                                        
                                                        1,431,162
                                                        
                                                        
                                                        
                                                        (1,220,045
                                                        )Net
      cash provided by (used for) financing activities
                                                        
                                                        
                                                        1,431,162
                                                        
                                                        
                                                        
                                                        (1,220,045
                                                        )Increase
      in cash
                                                        
                                                        
                                                        1,922
                                                        
                                                        
                                                        
                                                        2,085Cash,
      beginning of period
                                                        
                                                        
                                                        8,023
                                                        
                                                        
                                                        
                                                        6,728Cash,
      end of period
                                                        
                                                        $
                                                        9,945
                                                        
                                                        
                                                        $
                                                        8,813Supplemental
      disclosure of cash flow information:Cash
      paid for Interest
                                                        
                                                        $
                                                        38,928
                                                        
                                                        
                                                        $
                                                        41,706





See
accompanying notes to consolidated financial statements.




7


WEGENER
CORPORATION AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)








Note  1  Going
Concern




At
November 28, 2008, our net inventory balances were $6,397,000 compared to
$6,295,000 at August 29, 2008, and $3,380,000 at August 31, 2007.  The
increase in inventories during fiscal 2008 was primarily due to our new product
introductions of the iPump® 562
Enterprise Media Server, the Unity® 552
receiver and the Encompass-LE2 audio receiver. In addition, inventory levels
were increased for the iPump® 6400
Media Server and Nielsen Media Research products. At November 28, 2008,
outstanding inventory purchase commitments amounted to
$1,879,000.  These inventory purchases and purchase commitments were
made based on existing orders and expected future bookings.





Our
fiscal 2009 bookings to date, as well as our fiscal 2008 bookings, particularly
during the fourth quarter of fiscal 2008, were below our expectations primarily
as a result of customer delays in purchasing decisions, deferral of project
expenditures, foreign exchange rate fluctuations, particularly with the Mexican
peso, and general adverse economic and credit conditions.  WCI’s
backlog scheduled to ship within eighteen months was approximately $8.1 million
at November 28, 2008, compared to $8.5 million at August 29, 2008, and $9.9
million at November 30, 2007.  The total multi-year backlog at
November 28, 2008, was approximately $12.5 million, compared to $13.3 million at
August 29, 2008 and $16.5 million at November 30, 2007.  Approximately
$6,113,000 of the November 28, 2008 backlog is scheduled to ship during the
remainder of fiscal 2009.





Subsequent
to November 28, 2008, our bank notified WCI of its intent not to renew our loan
facility upon maturity (see Note 9 to theConsolidated
Financial Statements).  In addition, significant fiscal 2009 shippable
bookings are currently required to meet our financial projections in the second
quarter of fiscal 2009 and for each subsequent quarter.  Bookings and
revenues to date have been insufficient to provide adequate levels of cash flow
from operations or adequate levels of collateral to support required borrowings
during fiscal 2009.    As a result, we need to raise
additional capital or obtain additional credit facilities during fiscal 2009 to
continue as a going concern and to execute our business plan. Although we
are in discussions with potential financing sources, there is no assurance that
such financing will be available or, if available, that we will be able to
complete financing on satisfactory terms.  Our ability to continue as
a going concern will depend upon our ability to obtain additional capital or
financing in the
very short term and subsequently to increase our bookings and revenues
in the longer
term to attain profitable operations.  During the fourth
quarter of fiscal 2008 and first quarter of fiscal 2009, we made reductions in
headcount to bring the current number of employees to 84, and reduced
engineering consulting and other overhead expenses. Beginning in January 2009,
we will reduce Company-wide paid working hours by approximately
10%.   Should adequate capital or financing not be available, and
should increased revenues not materialize, we are committed to further reducing
operating costs to bring them in line with reduced revenue levels.  No
assurances can be given that operating costs can be sufficiently reduced to
allow us to continue as a going concern.  The accompanying
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.  The audit report
relating to the consolidated financial statements for the year ended August 29,
2008, contained an explanatory paragraph regarding the Company’s ability to
continue as a going concern.





Note
2 Significant Accounting Policies




The
significant accounting policies followed by the Company are set forth in Note 2
to our audited consolidated financial statements included in the Annual Report
on Form 10-K for the year ended August 29, 2008.





On August
30, 2008, we adopted Statement of Financial Accounting Standards (SFAS) No. 157,
“Fair Value Measurements,” which defines fair value, provides a framework for
measuring fair value, and expands the disclosures required for fair value
measurements. In February 2008, the Financial Accounting Standards Board (FASB)
issued FASB Staff Position (FSP) No. FAS 157-2, Effective Date of FASB Statement
No. 157.  FSP 157-2 delays the effective date of SFAS No. 157 to
fiscal years beginning after November 15, 2008 for all non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least annually)
and will be adopted by the Company beginning in the first quarter of fiscal
2010. The adoption of SFAS 157 had no impact on our financial statements at
August 30, 2008.





8


Revenue
Recognition




Our
revenue recognition policies are in compliance with Staff Accounting Bulletin
(SAB) No. 104, “Revenue Recognition,” SAB No. 101, “Revenue Recognition in
Financial Statements.”  Revenue is recognized when persuasive evidence
of an agreement with the customer exists, products are shipped or title passes
pursuant to the terms of the agreement with the customer, the amount due from
the customer is fixed or determinable, collectibility is reasonably assured, and
when there are no significant future performance obligations.  Service
revenues are recognized at the time of performance. Extended service maintenance
contract revenues are recognized ratably over the maintenance contract term,
which is typically one year. The unrecognized revenue portion of maintenance
contracts invoiced is recorded as deferred revenue.  At November 28,
2008, deferred extended service maintenance revenues were $524,000 and deferred
revenues related to future performance obligations were $21,000 and are expected
to be recognized as revenue in varying amounts throughout fiscal 2009 and into
fiscal 2010.





We
recognize revenue in certain circumstances before delivery has occurred
(commonly referred to as “bill and hold” transactions).  In such
circumstances, among other things, risk of ownership has passed to the buyer,
the buyer has made a written fixed commitment to purchase the finished goods,
the buyer has requested the finished goods to be held for future delivery as
scheduled and designated by the buyer, and no additional performance obligations
by the Company exist.  For these transactions, the finished goods are
segregated from inventory and normal billing and credit terms are
granted.  For the three months ended November 28, 2008, revenues in
the amount of $96,000 were recorded as bill and hold transactions.





These
policies require management, at the time of the transaction, to assess whether
the amounts due are fixed or determinable, collection is reasonably assured, and
no future performance obligations exist.  These assessments are based
on the terms of the agreement with the customer, past history and
creditworthiness of the customer.  If management determines that
collection is not reasonably assured or future performance obligations exist,
revenue recognition is deferred until these conditions are
satisfied.





Our
principal sources of revenue are from the sales of various satellite
communications equipment.  Embedded in the Company’s products is
internally developed software of varying applications.  We evaluate
our products to assess whether software is more than incidental to a
product.  When we conclude that software is more than incidental to a
product, we will account for the product as a software product. Revenue on
software products and software-related elements is recognized in accordance with
SOP No. 97-2, “Software Revenue Recognition,” as amended by SOP No. 98-9,
“Software Revenue Recognition, with Respect to Certain
Transactions.”  Significant judgment may be required in determining
whether a product is a software or hardware product.





In
accordance with EITF Issue 00-10, “Accounting for Shipping and Handling Fees and
Costs,” we have included all shipping and handling billings to customers in
revenues, and freight costs incurred for product shipments have been included in
cost of products sold.





Earnings
Per Share




Basic and
diluted net earnings per share were computed in accordance with Statement of
Financial Accounting Standards No. 128, “Earnings Per
Share.”   Basic net earnings per share is computed by dividing
net earnings available to common shareholders (numerator) by the weighted
average number of common shares outstanding (denominator) during the period and
excludes the dilutive effect of stock options.  Diluted net earnings
per share gives effect to all dilutive potential common shares outstanding
during a period.  In computing diluted net earnings per share, the
average stock price for the period is used in determining the number of shares
assumed to be reacquired under the treasury stock method from the exercise of
stock options.





Share-Based
Compensation




We
account for share-based payments to employees, including grants of employee
stock options, in accordance with Statement of Financial Accounting
Standards (SFAS) No. 123 (Revised 2004), “Share-Based Payment” (SFAS
123R).  SFAS 123R requires that these awards be recognized as
compensation expense in the consolidated financial statements based on their
fair values. That expense will be recognized over the period during which an
employee is required to provide services in exchange for the award, known as the
requisite service period (usually the vesting period). For the three months
ended November 28, 2008 and November 30, 2007, there was no stock-based
compensation expense. No options were granted during the three months ended
November 28, 2008.





9





The
following table summarizes stock option transactions for the three months ended
November 28, 2008:





Number
                                          of
      Shares
                                        
                                        
                                        Range
      of
                                          Exercise
      Prices
                                        
                                        
                                        Weighted
                                          Average
                                          Exercise
      PriceOutstanding
      at August 29, 2008
                                        
                                        
                                        928,531
                                        
                                        
                                        $
                                        .63
      – 2.72
                                        
                                        
                                        $
                                        1.55Forfeited
      or cancelled
                                        
                                        
                                        (10,000
                                        )
                                        
                                        
                                        1.41
      – 1.41
                                        
                                        
                                        
                                        1.41Outstanding
      at November 28, 2008
                                        
                                        
                                        918,531
                                        
                                        
                                        $
                                        .63
      – 2.72
                                        
                                        
                                        $
                                        1.55Available
      for issue at November 28, 2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Options
      exercisable atNovember
      28, 2008
                                        
                                        
                                        918,531
                                        
                                        
                                        $
                                        .63
      – 2.72
                                        
                                        
                                        $
                                        1.55August
      29, 2008
                                        
                                        
                                        928,531
                                        
                                        
                                        $
                                        .63
      – 2.72
                                        
                                        
                                        $
                                        1.55





The key
terms of the stock options granted under our incentive plans are included in the
Company's Annual Report on Form 10-K for the fiscal year ended August 29,
2008.





Bank
Overdrafts




Bank
overdrafts consist of outstanding checks that have not cleared our
bank.  Overdrafts are offset against cash balances to the extent that
cash balances are available in the account on which the checks are
issued.  Remaining balances of overdrafts are included in our accounts
payable balances.  At November 28, 2008, outstanding checks in the
amount of $479,000 were included in accounts payable balances.





Use
of Estimates




The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenue and expenses during the reporting period.
Examples include provisions for bad debts, inventory obsolescence and
warranties.  Actual results could vary from these
estimates.





Fiscal
Year




We use a
fifty-two, fifty-three week year.  The fiscal year ends on the Friday
closest to August 31.  Fiscal years 2009 and 2008 contain fifty-two
weeks.





Note
3 Accounts Receivable




Accounts
receivable are summarized as follows:





November
      28,
                                        2008
                                      
                                      
                                      August
      29,
                                        2008(Unaudited)Accounts
      receivable – trade
                                      
                                      $
                                      1,984,801
                                      
                                      
                                      $
                                      3,090,272Other
      receivables
                                      
                                      
                                      78,389
                                      
                                      
                                      
                                      103,0212,063,190
                                      
                                      
                                      
                                      3,193,293Less
      allowance for doubtful accounts
                                      
                                      
                                      (157,172
                                      )
                                      
                                      
                                      (230,233
                                      )Accounts
      receivable, net
                                      
                                      $
                                      1,906,018
                                      
                                      
                                      $
                                      2,963,060





10





Note
4 Inventories




Inventories
are summarized as follows:




November
      28,
                                2008
                              
                              
                              August
      29,
                                2008(Unaudited)Raw
      material
                              
                              $
                              5,341,416
                              
                              
                              $
                              5,312,531Work-in-process
                              
                              
                              1,176,726
                              
                              
                              
                              1,301,753Finished
      goods
                              
                              
                              3,952,998
                              
                              
                              
                              3,751,49710,471,140
                              
                              
                              
                              10,365,781Less
      inventory reserves
                              
                              
                              (4,074,356
                              )
                              
                              
                              (4,070,305
                              )Inventories,
      net
                              
                              $
                              6,396,784
                              
                              
                              $
                              6,295,476





Our
inventory reserve of approximately $4,074,000 at November 28, 2008 is to provide
for items that are potentially slow moving, excess or
obsolete.  During the first three months of fiscal 2009, inventory
reserves were reduced by write-offs of approximately $11,000 and increased by
provisions of $15,000.Changes in market
conditions, lower than expected customer demand and rapidly changing technology
could result in additional obsolete and slow-moving inventory that is unsaleable
or saleable at reduced prices.  No estimate can be made of a range of
amounts of loss from obsolescence that is reasonably possible should our sales
efforts not be successful.





Note
5 Land Held for Sale




During
the third quarter of fiscal 2007, the Company’s Board of Directors authorized
and approved the listing for sale of the 4.4 acres of undeveloped land located
adjacent to the Company’s headquarters facility in Johns Creek,
Georgia.  The Company evaluated the criteria of SFAS No. 144 (as
amended), “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS
No. 144), and concluded that these assets qualified as assets held for
sale.  In accordance with SFAS No. 144, the land was reclassified to
land held for sale at its historic carrying value of $354,000 (lower of carrying
amount or fair value less costs to sell) in the consolidated balance sheet as of
November 28, 2008.  The land was acquired in August 1989 and no
impairment charges were recorded related to the reclassification.  On
November 26, 2008, we executed a contract to sell the land for approximately
$840,000, less applicable commissions and closing costs. The contract is subject
to various contingencies, including a rezoning of the property, which could
require up to one year to complete. No assurances may be given that the sale
will be consummated.





Note
6 Other Assets




Other
assets consist of the following:




November
      28, 2008 (unaudited)Cost
                                      
                                      
                                      Accumulated
                                        Amortization
                                      
                                      
                                      NetLicense
      agreements
                                      
                                      $
                                      958,800
                                      
                                      
                                      $
                                      (932,384
                                      )
                                      
                                      $
                                      26,416Patents
      and patent applications
                                      
                                      
                                      342,519
                                      
                                      
                                      
                                      (51,835
                                      )
                                      
                                      
                                      290,684Trademarks
                                      
                                      
                                      82,820
                                      
                                      
                                      
                                      (45,016
                                      )
                                      
                                      
                                      37,804Loan
      facility fees
                                      
                                      
                                      100,000
                                      
                                      
                                      
                                      (41,667
                                      )
                                      
                                      
                                      58,333Other
                                      
                                      
                                      6,889
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      6,889$
                                      1,491,028
                                      
                                      
                                      $
                                      (1,070,902
                                      )
                                      
                                      $
                                      420,126





August
      29, 2008Cost
                              
                              
                              Accumulated
                                Amortization
                              
                              
                              NetLicense
      agreements
                              
                              $
                              958,800
                              
                              
                              $
                              (925,384
                              )
                              
                              $
                              33,416Patents
      and patent applications
                              
                              
                              336,328
                              
                              
                              
                              (47,725
                              )
                              
                              
                              288,603Trademarks
                              
                              
                              82,820
                              
                              
                              
                              (41,011
                              )
                              
                              
                              41,809Loan
      facility fees
                              
                              
                              100,000
                              
                              
                              
                              (16,667
                              )
                              
                              
                              83,333Other
                              
                              
                              6,889
                              
                              
                              
                              -
                              
                              
                              
                              6,889$
                              1,484,837
                              
                              
                              $
                              (1,030,787
                              )
                              
                              $
                              454,050
  11


Amortization
expense of other assets for the three months ended November 28, 2008 amounted to
$40,000.  Amortization expense of other assets for the three months
ended November 30, 2007 amounted to $71,000.





We
conduct an ongoing review of our intellectual property rights and potential
trademarks.  As of November 28, 2008, we have cumulatively incurred
$243,000 of legal fees related to the filing of applications for various patents
and $1,000 related to the filing of trademark applications.  Upon
issuance, these costs will be amortized on a straight-line basis over the lesser
of the legal life or their estimated useful lives.  If it becomes more
likely than not that the patent application will not be granted, we will
write-off the deferred cost at that time.  At November 28, 2008, the
cost of registered patents and trademarks amounted to $99,000 and $82,000,
respectively.  Patents and trademarks are amortized over their
estimated useful life of four to ten years.  License agreements are
amortized over their estimated useful life of one to five years.  Loan
facility fees are amortized over twelve months.





Note
7 Accrued
Expenses




Accrued
expenses consist of the following:








November
      28,
                          2008
                        
                        
                        August
      29,
                          2008(Unaudited)Vacation
                        
                        $
                        579,446
                        
                        
                        $
                        557,478Payroll
      and related expenses
                        
                        
                        196,880
                        
                        
                        
                        354,673Royalties
                        
                        
                        102,391
                        
                        
                        
                        159,115Warranty
                        
                        
                        228,882
                        
                        
                        
                        228,882Taxes
      and insurance
                        
                        
                        88,173
                        
                        
                        
                        150,318Commissions
                        
                        
                        37,391
                        
                        
                        
                        37,391Professional
      fees
                        
                        
                        284,098
                        
                        
                        
                        337,408Other
                        
                        
                        21,673
                        
                        
                        
                        46,622$
                        1,538,934
                        
                        
                        $
                        1,871,887





Accrued
Warranty




We
warrant our products for a 12 to 14 month period beginning at the date of
shipment.  The warranty provides for repair or replacement of
defective products returned during the warranty period at no cost to the
customer.  We expense costs for routine warranty repairs as
incurred.  Additional provisions are made for non-routine warranty
repairs based on estimated costs to repair at the point in time in which the
warranty claim is identified.  Accrued warranty liabilities amounted
to $229,000 at November 28, 2008 and at August 29, 2008.  For the
three months ended November 28, 2008, no additional warranty provisions were
made and no amounts for satisfied warranty claims were charged to the
accrual.





Note
8 Deferred Revenue




Deferred
revenue consists of the unrecognized revenue portion of extended service
maintenance contracts and estimates of revenue related to future performance
obligations. Extended service maintenance contract revenues are recognized
ratably over the maintenance contract term, which is typically one
year.  At November 28, 2008, deferred extended service maintenance
revenues were $524,000 and deferred revenues related to future performance
obligations were $21,000 and are expected to be recognized as revenue in varying
amounts throughout fiscal 2009 and into fiscal 2010.





Note
9 Finance Arrangements




Revolving
Line of Credit and Term Loan Facility





WCI’s
bank loan facility provides a maximum available credit limit of $5,000,000
subject to availability advance formulas.  The loan facility matures
on September 30, 2009, or upon demand, and requires an annual facility fee of 2%
of the maximum credit limit.  The loan facility consists of a term
loan and a revolving line of credit bearing interest at the bank’s prime rate
(4.0% at November 28, 2008).  The bank retained the right to adjust
the interest rate, subject to the financial performance of the
Company.  Subsequent to November 28, 2008, the bank notified WCI of
its intent not to renew the loan facility upon maturity.  Although we
are in discussions with potential financing sources, there is no assurance that
such financing will be available or, if available, that we will be able to
complete financing on satisfactory terms.





12


The term
loan facility provides for a maximum of $1,000,000 for advances of up to 80% of
the cost of equipment acquisitions.  Principal advances are payable
monthly over 60 months with a balloon payment due at maturity.  The
revolving line of credit is subject to availability advance formulas of 80%
against eligible accounts receivable; 20% of eligible raw materials inventories;
20% of eligible work-in-process kit inventories; 40% to 50% of eligible finished
goods inventories and 50% of import letter of credit commitment
balances.  In addition, the facility provides for advances in excess
of the availability formulas of up to $1,000,000 during the term of the
facility.  The loan is secured by a first lien on substantially all of
WCI’s assets, including land and buildings, and is guaranteed by Wegener
Corporation.  At November 28, 2008, balances outstanding on the
revolving line of credit amounted to $3,314,000 and no borrowings were
outstanding under the equipment term loan portions of the loan facility. The
loan facility is also used to support import letters of credit issued to
offshore manufacturers. At November 28, 2008, no letters of credit were
outstanding.





At
November 28, 2008, approximately $462,000 was available to borrow under the
advance formulas.  During the first quarter of fiscal 2009, the
average daily balance outstanding was $3,262,000 and the highest outstanding
balance was $3,694,000.





Under the
loan facility, at the end of fiscal 2009 we are required to maintain a minimum
tangible net worth and a minimum fixed charge coverage ratio.  In
addition, we are required to retain certain executive officers, maintain certain
financial ratios, and are precluded from paying dividends.





At
November 28, 2008, we had land and buildings with a cost basis of $4,457,000
(including land held for sale of $354,000).  Although land and
buildings are subject to a lien under the loan facility, they are not currently
used in the existing loan facility’s availability advance formulas and have no
mortgage balances outstanding.  We are pursuingways to utilize these assets to support additional overall borrowing
capacities.  During the third quarter of fiscal 2007, the Company’s
Board of Directors authorized and approved the listing for sale of the 4.4 acres
of undeveloped land located adjacent to the Company’s headquarters facility in
Johns Creek, Georgia (see note 5 to the consolidated financial
statements).  On November 26, 2008, we executed a contract to sell the
land for approximately $840,000, less applicable commissions and closing costs.
The contract is subject to various contingencies, including a rezoning of the
property, which could require up to one year to complete. No assurances may be
given that the sale will be consummated. Proceeds from the sale of the land
would be used to reduce any balances outstanding on the revolving line of
credit.





Note
10 Income Taxes




For the
three months ended November 28, 2008, no income tax benefit was recorded due to
an increase in the deferred tax asset valuation allowance.  The
valuation allowance increased $430,000 in the first quarter of fiscal
2009.  At November 28, 2008, net deferred tax assets of $6,308,000
were fully reserved by a valuation allowance.





At
November 28, 2008, we had a federal net operating loss carryforward of
approximately $10,815,000, which expires beginning fiscal 2020 through fiscal
2028.  Additionally, we had an alternative minimum tax credit of
$134,000 and state income tax credits of $199,000 expiring in fiscal 2009, both
of which were fully offset by the valuation allowance.





We
adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109” (FIN 48), as of September 1, 2007,
the first day of the first quarter of fiscal 2008.  The adoption of
FIN 48 had no impact on our financial position or results of operations for
fiscal 2008.  We are subject to U.S. federal income tax as well as
income tax of numerous state jurisdictions. We are subject to U.S. federal tax
examinations by tax authorities for fiscal years 2005 through 2008. Income tax
examinations that we may be subject to from the various state taxing authorities
vary by jurisdiction. Our policy under FIN 48 for penalties and interest is to
include such amounts, if any, in income tax expense.





Note
11 Earnings Per Share




The
following table presents required disclosure of the reconciliation of the
numerators and denominators of the basic and diluted net (loss) earnings per
share computations.  The calculation of earnings per share is subject
to rounding differences.





13





Three
      months ended (unaudited)November
      28, 2008
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          November
      30, 2007Earnings
                                                                                                                                            (Numerator)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Shares
                                                                                                                                            (Denominator)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Per
      share
                                                                                                                                            amount
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Earnings
                                                                                                                                            (Numerator)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Shares
                                                                                                                                            (Denominator)
                                                                                                                                          
                                                                                                                                          Per
                                                                                                                                            share
                                                                                                                                            amountNet
      loss
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (1,192,739
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (50,507
                                                                                                                                          )Basic
      loss per share:Net
      loss available to common shareholders
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (1,192,739
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          12,647,051
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (.09
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (50,507
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          12,647,051
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          *Effect
      of dilutive potential common shares:Stock
      options
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          -
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          -
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          -
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          -Diluted
      loss per share:Net
      loss available to common shareholders
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (1,192,739
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          12,647,051
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (.09
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          (50,507
                                                                                                                                          )
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          12,647,051
                                                                                                                                          
                                                                                                                                          $
                                                                                                                                          *




* Less
than $(0.01) per share





Stock
options which were excluded from the diluted net (loss) earnings per share
calculation due to their antidilutive effect are as follows:




Three
      months endedNovember
      28,
                                                        2008
                                                      
                                                      
                                                      November
      30,
                                                        2007Common
      stock options:Number
      of shares
                                                      
                                                      
                                                      918,531
                                                      
                                                      
                                                      
                                                      962,531Range
      of exercise prices
                                                      
                                                      $
                                                      .63
      to $2.72
                                                      
                                                      
                                                      $
                                                      .63
      to $2.72




Note
12 Segment Information and Concentrations




In
accordance with Statement of Financial Accounting Standards No. 131, “Disclosure
about Segments of an Enterprise and Related Information,” we operate within a
single reportable segment, the manufacture and sale of satellite communications
equipment.





In this
single operating segment we have three sources of revenues as
follows:





Three
      months endedNovember
      28,
                                                                      2008
                                                                    
                                                                    
                                                                    November
      30,
                                                                      2007Product
      LineDirect
      Broadcast Satellite
                                                                    
                                                                    $
                                                                    2,118,780
                                                                    
                                                                    
                                                                    $
                                                                    4,850,211Telecom
      and Custom Products
                                                                    
                                                                    
                                                                    9,461
                                                                    
                                                                    
                                                                    
                                                                    11,673Service
                                                                    
                                                                    
                                                                    194,537
                                                                    
                                                                    
                                                                    
                                                                    164,045Revenues,
      net
                                                                    
                                                                    $
                                                                    2,322,778
                                                                    
                                                                    
                                                                    $
                                                                    5,025,929





14


Concentrations
of products representing 10% or more of the respective periods’ revenues are as
follows:





Three
      months endedNovember
      28,
                                                2008
                                              
                                              
                                              November
      30,
                                                2007ProductUnity
      201 audio receiver
                                              
                                              
                                              23.2
                                              %
                                              
                                              (a)Network
      Control
                                              
                                              
                                              14.6
                                              %
                                              
                                              (a)iPump
      Media Server
                                              
                                              (a)
                                              
                                              
                                              
                                              11.7
                                              %Unity
      4600 and 4650
                                              
                                              
                                              11.8
                                              %
                                              
                                              
                                              35.7
                                              %







(a) Revenues for the period were less
than 10% of total revenues.




Products
representing 10% or more of annual revenues are subject to fluctuations from
quarter to quarter as new products and technologies are introduced, new product
features and enhancements are added, and as customers upgrade or expand their
network operations.





Revenues
by geographic area are as follows:





Three
      months endedNovember
      28,
                                                        2008
                                                      
                                                      
                                                      November
      30,
                                                        2007Geographic
      AreaUnited
      States
                                                      
                                                      $
                                                      2,217,800
                                                      
                                                      
                                                      $
                                                      3,848,686Latin
      America
                                                      
                                                      
                                                      93,109
                                                      
                                                      
                                                      
                                                      826,996Canada
                                                      
                                                      
                                                      9,882
                                                      
                                                      
                                                      
                                                      267,521Europe
                                                      
                                                      
                                                      1,654
                                                      
                                                      
                                                      
                                                      57,680Other
                                                      
                                                      
                                                      333
                                                      
                                                      
                                                      
                                                      25,046Revenues,
      net
                                                      
                                                      $
                                                      2,322,778
                                                      
                                                      
                                                      $
                                                      5,025,929


Customers
representing 10% or more of the respective periods’ revenues are as
follows:




Three
      months endedNovember
      28,
                                      2008
                                    
                                    
                                    November
      30,
                                      2007Customer
      1
                                    
                                    
                                    23.1
                                    %
                                    
                                    (a)Customer
      2
                                    
                                    
                                    17.0
                                    %
                                    
                                    (a)Customer
      3
                                    
                                    
                                    13.5
                                    %
                                    
                                    
                                    19.6
                                    %Customer
      4
                                    
                                    (a)
                                    
                                    
                                    
                                    19.2
                                    %Customer
      5
                                    
                                    (a)
                                    
                                    
                                    
                                    13.8
                                    %





(a)
Revenues for the period were less than 10% of total revenues.





Note
13 Commitments




We have
three manufacturing and purchasing agreements for certain finished goods
inventories. At November 28, 2008, outstanding purchase commitments under these
agreements amounted to $1,879,000.





15


Note
14 Guarantees and Indemnifications





Letters
of Credit




We
provide standby letters of credit in the ordinary course of business to certain
suppliers pursuant to manufacturing and purchasing agreements.  At
November 28, 2008, we had no letters of credit outstanding.




Financing
Agreements




The
Company guarantees the bank loan facility of WCI.  The bank facility
provides a maximum available credit limit of $5,000,000.  At November
28, 2008, $3,314,000 was outstanding on the loan facility.





Indemnification
Obligations




We are
obligated to indemnify our officers and the members of our Board of Directors
pursuant to our bylaws and contractual indemnity agreements. We routinely sell
products with a limited intellectual property indemnification included in the
terms of sale or in certain contractual arrangements. The scope of these
indemnities varies, but in some instances includes indemnification for damages
and expenses (including reasonable attorneys’ fees). Certain requests for
indemnification have been received by us pursuant to these arrangements (see
Part I, Item 3. Legal Proceedings, in our Annual Report on
Form    10-K for the year ended August 29, 2008 for further
discussion).




16


WEGENER CORPORATION AND
SUBSIDIARIES





ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS





This
information should be read in conjunction with the consolidated financial
statements and the notes thereto included in Item 1 of this Quarterly Report and
the audited consolidated financial statements and notes thereto and Management’s
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended August 29, 2008 contained in the Company’s 2008 Annual Report on Form
10-K.





Certain
statements contained in this filing are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995, and the Company
intends that such forward-looking statements are subject to the safe harbors
created thereby.  Forward-looking statements may be identified by words
such as "believes," "expects," "projects," "plans," "anticipates," and similar
expressions, and include, for example, statements relating to expectations
regarding  future sales, income and cash flows.  Forward-looking
statements are based upon the Company’s current expectations and assumptions,
which are subject to a number of risks and uncertainties including, but not
limited to:  customer acceptance and effectiveness of recently introduced
products; development of additional business for the Company’s digital video and
audio transmission product lines; effectiveness of the sales organization; the
successful development and introduction of new products in the future; delays in
the conversion by private and broadcast networks to next generation digital
broadcast equipment; acceptance by various networks of standards for digital
broadcasting; the Company’s liquidity position and capital resources; general
market and industry conditions which may not improve during fiscal year
2009  and beyond; and success of the Company’s research and
development efforts aimed at developing new products.  Additional
potential risks and uncertainties include, but are not limited to, economic
conditions, customer plans and commitments, product demand, government
regulation, rapid technological developments and changes, intellectual property
disputes, performance issues with key suppliers and subcontractors, delays in
product development and testing, availability of raw materials, new and existing
well-capitalized competitors, and other risks and uncertainties detailed from
time to time in the Company’s periodic Securities and Exchange Commission
filings, including the Company’s most recent Annual Report on Form
10-K.  Such forward-looking statements are subject to risks,
uncertainties and other factors and are subject to change at any time, which
could cause actual results to differ materially from future results expressed or
implied by such forward-looking statements.  Forward-looking
statements speak only as of the date the statement was made.





These
risks are exacerbated by the recent crisis in national and international
financial markets and global economic downturn, and we are unable to predict
with certainty what long-term effects these developments will continue to have
on our Company.  During 2008, the capital and credit markets
experienced extended volatility and disruption.  In the last 90 days,
the volatility and disruption reached unprecedented levels.  We
believe that these unprecedented developments have adversely affected our
business, financial condition and results of operations in the first quarter of
fiscal 2009.





Forward-looking
statements speak only as of the date the statement was made.  The Company
does not undertake any obligation to update any forward-looking
statements.





OVERVIEW





We design
and manufacture satellite communications equipment through Wegener
Communications, Inc. (WCI), a wholly-owned subsidiary. WCI is an international
provider of digital solutions for video, audio and IP data
networks.  Applications include IP data delivery, broadcast
television, cable television, radio networks, business television, distance
education, business music and financial information
distribution.  COMPELÒ,
our network control system, provides network flexibility to regionalize
programming, commercials and file transfers.





Revenues
for the first quarter of fiscal 2009 decreased $2,703,000, or 53.8%, to
$2,323,000 from $5,026,000 for the same period in fiscal 2008. The operating
results for the three month period ended November 28, 2008, were a net loss of
$(1,193,000) or $(0.09) per share, compared to a net loss of $(51,000) or less
than $(0.01) per share, for the three month period ended November 30, 2007.
During the first quarter of fiscal 2009, bookings, consisting primarily of
add-on orders from existing customers, were approximately $1.3 million. Our
fiscal 2009 bookings to date, as well as our fiscal 2008 bookings, particularly
during the fourth quarter of fiscal 2008, were below our expectations and
internal forecast primarily as a result of customer delays in purchasing
decisions, deferral of project expenditures, foreign exchange rate fluctuations,
particularly with the Mexican peso, and general adverse economic and credit
conditions.





17


Financial
Position and Liquidity





Fiscal
2009 first quarter bookings and revenues, as well as bookings and revenues
subsequent to November 28, 2008, were insufficient to provide adequate levels of
cash flow from operations or adequate levels of collateral to support required
borrowings during fiscal 2009.   In addition, subsequent to
November 28, 2008, our bank notified WCI of its intent not to renew our loan
facility when it matures on September 30, 2009.  As a result, we need
to raise additional capital or obtain additional credit facilities during fiscal 2009 to
continue as a going concern and to execute our business
plan.





At
November 28, 2008, we had line of credit borrowings outstanding of $3,314,000.
Our $5,000,000 bank loan facility is subject to availability advance formulas
based on eligible accounts receivable, import letter of credit commitment
balances and inventories.  At November 28, 2008,approximately $462,000
remained available to borrow under the advance formulas.  At November
28, 2008, no letters of credit were outstanding.





During
the first three months of fiscal 2009, our line of credit net outstanding
borrowings increased $1,431,000 to $3,314,000 at November 28, 2008, from
$1,883,000 at August 29, 2008.  Operating activitiesused $1,169,000 of cash
and investing activities used $260,000 of cash, which consisted of capitalized
software additions of $254,000 and legal fees related to the filing of
applications for various patents and trademarks of $6,000.





(See the
Liquidity and Capital Resources section for further discussion.)





RESULTS
OF OPERATIONS





THREE
MONTHS ENDED NOVEMBER 28, 2008 COMPARED TO THREE MONTHS ENDED NOVEMBER 30,
2007





The
following table sets forth, for the periods indicated, the components of our
results of operations as a percentage of sales:




Three
      months ended (unaudited)November
      28,
                                      2008
                                    
                                    
                                    November
      30,
                                      2007Revenue
                                    
                                    
                                    100.0
                                    %
                                    
                                    
                                    100.0
                                    %Cost
      of products sold
                                    
                                    
                                    73.1
                                    
                                    
                                    
                                    58.9Gross
      margin
                                    
                                    
                                    26.9
                                    
                                    
                                    
                                    41.1Selling,
      general, and administrative
                                    
                                    
                                    50.4
                                    
                                    
                                    
                                    25.1Research
      & development
                                    
                                    
                                    26.2
                                    
                                    
                                    
                                    16.1Operating
      loss
                                    
                                    
                                    (49.7
                                    )
                                    
                                    
                                    (.1
                                    )Interest
      expense
                                    
                                    
                                    (1.7
                                    )
                                    
                                    
                                    (.8
                                    )Net
      loss
                                    
                                    
                                    (51.4
                                    )%
                                    
                                    
                                    (0.9
                                    )%





The
operating results for the three month period ended November 28, 2008, were a net
loss of $(1,193,000) or $(0.09) per share, compared to a net loss of $(51,000)
or less than $(0.01) per share for the three month period ended November 30,
2007.





Revenues
- Revenues for the first quarter of fiscal 2009 decreased $2,703,000, or 53.8%,
to $2,323,000 from $5,026,000 for the same period in fiscal 2008.





Direct
Broadcast Satellite (DBS) revenues (including service revenues) decreased
$2,701,000, or 53.9%, in the first quarter of fiscal 2009 to $2,313,000 from
$5,014,000 for the same period in fiscal 2008.  First quarter revenues
were adversely affected by lower than expected shippable bookings as discussed
above.  First quarter revenues included iPump®6420
media servers and Compel® network
control software for Dial Global’s network expansion, continued shipments of our
new Encompass LE2, our next generation business music audio receiver, to
business music provider, Muzak LLC., and shipments to MegaHertz for distribution
of our products to the U.S. cable market.





Revenues
and order backlog are subject to the timing of significant orders from customers
and new product introductions, and as a result revenue levels may fluctuate from
quarter to quarter.  For the three months ended November 28, 2008,
three customers accounted for 23.1%, 17.0% and 13.5% of revenues,
respectively. For the three months ended November 30, 2007, three customers
accounted for 19.6%, 19.2% and 13.8% of revenues, respectively.  Sales
to a relatively small number of major customers have typically comprised a
majority of our revenues and that trend is expected to continue throughout
fiscal 2009 and beyond.





18


Our
backlog is comprised of undelivered, firm customer orders, which are scheduled
to ship within eighteen months.  WCI’s backlog scheduled to ship
within eighteen months was approximately $8.1 million at November 28, 2008,
compared to $8.5 million at August 29, 2008, and $9.9 million at November 30,
2007.  Three customers accounted for approximately 36.1%, 31.5% and
10.8%, respectively, of the backlog at November 28, 2008.  The total
multi-year backlog at November 28, 2008 was approximately $12.5 million,
compared to $13.3 million at August 29, 2008 and $16.5 million at November 30,
2007.





Gross
Profit Margins – The Company’s gross profit margin percentages were 26.9%
for the three month period endedNovember 28, 2008,
compared to 41.1% for the three month period ended November 30, 2007. Gross
profit margin dollars decreased $1,439,000 for the three month period ended
November 28, 2008 compared to the same period ended November 30,
2007.  The decreases in margin percentages and dollars were mainly due
to the decrease in revenues.





Selling,
General and Administrative - Selling, general and administrative
(SG&A) expenses decreased $94,000, or 7.4%, to $1,170,000 in the first
quarter of fiscal 2009 from $1,264,000 in the first quarter of fiscal
2008.  Corporate SG&A expenses in the first quarter of fiscal 2009
increased $42,000, or 19.9%, to $254,000 from $212,000 in same period of fiscal
2008, mainly due to an increase in professional fees.  WCI’s SG&A
expenses decreased $136,000, or 12.9%, to $916,000 in the first quarter of
fiscal 2009 from $1,052,000 in same period of fiscal 2008. The decrease in WCI’s
SG&A expenses in the first quarter of fiscal 2009 was mainly due to
decreases in (i) sales and marketing expenses of $65,000, (ii) in-house
commissions of $45,000, (iii) employee placement fees and related training of
$22,000, and (iv) allowance for bad debts of $15,000.  As a percentage
of revenues, SG&A expenses were 50.4% for the three month period ended
November 28, 2008, compared to 25.1% for the same period ended November 30,
2007.





Research
and Development - Research and development expenditures, including
capitalized software development costs, were $863,000 or 37.1% of revenues in
the first quarter of fiscal 2009, compared to $1,002,000 or 19.9% of revenues
for the same period of fiscal 2008.  The decrease in expenditures in
the first quarter of fiscal 2009 compared to the same period of fiscal 2008 was
mainly due to lower consulting costs and recruiting costs related to new
hires.  Capitalized software development costs amounted to $254,000 in
the first quarter of fiscal 2009 compared to $193,000 in the first quarter of
fiscal 2008. The increase in capitalized software costs was related to
Compel® network
control projects.  Research and development expenses, excluding
capitalized software development costs, were $609,000 or 26.2% of revenues in
the first quarter of fiscal 2009 compared to $809,000 or 16.1% of revenues in
the same period of fiscal 2008. The increase in expenses in the first quarter of
fiscal 2009 was due to the decrease in consulting costs and increase in
capitalized software costs.





Interest
Expense-
Interest expense decreased $3,000 to $39,000 in the first quarter of fiscal 2009
from $42,000 in the same period in fiscal 2008.  The decrease was
primarily due to a lower average bank prime rate which was offset by an increase
in the average outstanding line of credit balance.





Income
Tax Expense - For the three months ended November 28, 2008, no income tax
benefit was recorded due to an increase in the deferred tax asset valuation
allowance.  The valuation allowance increased $430,000 in the first
quarter of fiscal 2009.  At November 28, 2008, net deferred tax assets
of $6,308,000 were fully reserved by a valuation allowance.  At
November 28, 2008, we had a federal net operating loss carryforward of
approximately $10,815,000, which expires beginning fiscal 2020 through fiscal
2028.  Additionally, we had an alternative minimum tax credit of
$134,000 and state income tax credits of $199,000 expiring in fiscal 2009, both
of which were fully offset by the valuation allowance.





LIQUIDITY
AND CAPITAL RESOURCES




THREE
MONTHS ENDED NOVEMBER 28, 2008





At
November 28, 2008, our net inventory balances were $6,397,000 compared to
$6,295,000 at August 29, 2008, and $3,380,000 at August 31, 2007.  The
increase in inventories during fiscal 2008 was primarily due to our new fiscal
2008 product introductions of the iPump® 562
Enterprise Media Server, the Unity® 552
receiver and the Encompass-LE2 audio receiver. In addition, inventory levels
were increased for the iPump® 6400
Media Server and Nielsen Media Research products. At November 28, 2008,
outstanding inventory purchase commitments amounted to
$1,879,000.  These inventory purchases and purchase commitments were
made based on existing orders and expected future bookings.





19


Our
fiscal 2009 bookings to date, as well as our fiscal 2008 bookings, particularly
during the fourth quarter of fiscal 2008, were below our expectations and
internal forecast primarily as a result of customer delays in purchasing
decisions, deferral of project expenditures, foreign exchange rate fluctuations,
particularly with the Mexican peso, and general adverse economic and credit
conditions.  WCI’s backlog scheduled to ship within eighteen months
was approximately $8.1 million at November 28, 2008, compared to $8.5 million at
August 29, 2008, and $9.9 million at November 30, 2007.  The total
multi-year backlog at November 28, 2008 was approximately $12.5 million,
compared to $13.3 million at August 29, 2008 and $16.5 million at November 30,
2007.





Subsequent
to November 28, 2008, our bank notified WCI of its intent not to renew our loan
facility when it matures on September 30, 2009 (see Financing Agreements
below).  In addition, significant fiscal 2009 shippable bookings are
currently required to meet our financial projections in the second quarter of
fiscal 2009 and for each subsequent quarter.  Bookings and revenues to
date have been insufficient to provide adequate levels of cash flow from
operations or adequate levels of collateral to support required borrowings
during fiscal 2009.    As a result, we need to raise
additional capital or obtain additional credit facilities during fiscal 2009 to
continue as a going concern and to execute our business plan. Although we
are in discussions with potential financing sources, there is no assurance that
such financing will be available or, if available, that we will be able to
complete financing on satisfactory terms.  Our ability to continue as
a going concern will depend upon our ability to obtain additional capital or
financing in the
very short term and subsequently to increase our bookings and revenues
in the longer
term to attain profitable operations.  During the fourth
quarter of fiscal 2008 and first quarter of fiscal 2009, we made reductions in
headcount to bring the current number of employees to 84, and reduced
engineering consulting and other overhead expenses. Beginning in January 2009,
we will reduce Company wide paid working hours by approximately
10%.   Should adequate capital or financing not be available, and
should increased revenues not materialize, we are committed to further reducing
operating costs to bring them in line with reduced revenue levels.  No
assurances can be given that operating costs can be sufficiently reduced to
allow us to continue as a going concern.    The accompanying
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.  The audit report
relating to the consolidated financial statements for the year ended August 29,
2008, contains an explanatory paragraph regarding the Company’s ability to
continue as a going concern.





Financing
Agreements





At
November 28, 2008, our primary source of liquidity was a $5,000,000 bank loan
facility, which is subject to availability advance formulas based on eligible
accounts receivable, import letter of credit commitment balances and
inventories. The loan facility consists of a term loan and a revolving line of
credit with a combined borrowing limit of $5,000,000, bearing interest at the
bank’s prime rate (4.0% at November 28, 2008).  The bank retained the
right to adjust the interest rate, subject to the financial performance of the
Company. The loan facility matures on September 30, 2009, or upon demand, and
requires an annual facility fee of 2% of the maximum credit
limit.  Subsequent to November 28, 2008, the bank notified WCI of its
intent not to renew the loan facility upon maturity.  Although we are
in discussions with potential financing sources, there is no assurance that such
financing will be available or, if available, that we will be able to complete
financing on satisfactory terms.





During
the first three months of fiscal 2009, our line of credit net outstanding
borrowings increased $1,431,000 to $3,314,000 at November 28, 2008 from
$1,883,000 at August 29, 2008.  During the first quarter of fiscal
2009, the average daily balance outstanding was $3,262,000 and the highest
outstanding balance was $3,694,000.  At November 28, 2008,approximately $462,000
remained available to borrow under the advance formulas.





The term
loan facility provides for a maximum of $1,000,000 for advances of up to 80% of
the cost of equipment acquisitions.  Principal advances are payable
monthly over 60 months with a balloon payment due at maturity.  The
revolving line of credit is subject to availability advance formulas of 80%
against eligible accounts receivable; 20% of eligible raw materials inventories;
20% of eligible work-in-process kit inventories; 40% to 50% of eligible finished
goods inventories and 50% of import letter of credit commitment
balances.  In addition, the facility provides for advances in excess
of the availability formulas of up to $1,000,000 during the term of the
facility.  The loan is secured by a first lien on substantially all of
WCI’s assets, including land and buildings, and is guaranteed by Wegener
Corporation.  At November 28, 2008, no borrowings were outstanding
under the equipment term loan portions of the loan facility. The loan facility
is also used to support import letters of credit issued to offshore
manufacturers. At November 28, 2008, no letters of credit were
outstanding.





Under the
loan facility, at the end of fiscal 2009 we are required to maintain a minimum
tangible net worth and a minimum fixed charge coverage ratio.  In
addition, we are required to retain certain executive officers, maintain certain
financial ratios, and are precluded from paying dividends.





20


At
November 28, 2008, we had land and buildings with a cost basis of $4,457,000
(including land held for sale of $354,000).  Although land and
buildings are subject to a lien under the loan facility, they are not currently
used in the existing loan facility’s availability advance formulas and have no
mortgage balances outstanding.  We are pursuingways to utilize these assets to support additional overall borrowing
capacities.  During the third quarter of fiscal 2007, the Company’s
Board of Directors authorized and approved the listing for sale of the 4.4 acres
of undeveloped land located adjacent to the Company’s headquarters facility in
Johns Creek, Georgia (see note 5 to the consolidated financial statements). On
November 26, 2008, we executed a contract to sell the land for approximately
$840,000, less applicable commissions and closing costs. The contract is subject
to various contingencies, including a rezoning of the property, which could
require up to one year to complete.  No assurances may be given that
the sale will be consummated. Proceeds from the sale of the land would be used
to reduce any balances outstanding on the revolving line of credit.





Cash
Flows





During
the first quarter of fiscal 2009, operating activities used $1,169,000 of
cash.  Net loss adjusted for expense provisions and depreciation and
amortization (before working capital changes) used cash of $796,000, while
changes in accounts receivable and customer deposit balances provided $979,000
of cash.  Changes in accounts payable and accrued expenses,
inventories, deferred revenue and other assets used $1,352,000 of
cash.  Cash used by investing activities was $260,000, which consisted
of capitalized software additions of $254,000 and legal fees related to the
filing of applications for various patents and trademarks of $6,000. Financing
activities provided $1,431,000 of cash from net line of credit
borrowings.





Contractual
Obligations





We have
two manufacturing and purchasing agreements for certain finished goods
inventories. AtNovember 28, 2008,
outstanding purchase commitments under these agreements amounted to
$1,879,000.





The
Company’s long-term contractual obligations as of November 28,
2008 consisted of:








Payments
      Due by PeriodContractual
      Obligations
                                          
                                          Total
                                          
                                          
                                          Fiscal
                                            2009
                                          
                                          
                                          Fiscal
                                            2010-2011
                                          
                                          
                                          Fiscal
                                            2012-2013Operating
      leases
                                          
                                          $
                                          147,000
                                          
                                          
                                          $
                                          123,000
                                          
                                          
                                          $
                                          24,000
                                          
                                          
                                          $
                                          -Bank
      line of credit
                                          
                                          
                                          3,314,000
                                          
                                          
                                          
                                          3,314,000
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Purchase
      commitments
                                          
                                          
                                          1,879,000
                                          
                                          
                                          
                                          1,879,000
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Total
                                          
                                          $
                                          5,340,000
                                          
                                          
                                          $
                                          5,316,000
                                          
                                          
                                          $
                                          24,000
                                          
                                          
                                          $
                                          -





CRITICAL
ACCOUNTING POLICIES





Certain
accounting policies are very important to the portrayal of our financial
condition and results of operations and require management’s most subjective or
difficult judgments.  These policies are as follows:





Revenue
Recognition – Our revenue recognition policies are in compliance with
Staff Accounting Bulletin (SAB) No. 104, “Revenue Recognition,” SAB No. 101,
“Revenue Recognition in Financial Statements."  Revenue is recognized
when persuasive evidence of an agreement with the customer exists, products are
shipped or title passes pursuant to the terms of the agreement with the
customer, the amount due from the customer is fixed or determinable,
collectibility is reasonably assured, and when there are no significant future
performance obligations.  Service revenues are recognized at the time
of performance. Extended service maintenance contract revenues are recognized
ratably over the maintenance contract term, which is typically one year. The
unrecognized revenue portion of maintenance contracts invoiced is recorded as
deferred revenue.  At November 28, 2008, deferred extended service
maintenance revenues were $524,000, and deferred revenues related to future
performance obligations were $21,000 and are expected to be recognized as
revenue in varying amounts throughout fiscal 2009 and into fiscal
2010.  We recognize revenue in certain circumstances before delivery
has occurred (commonly referred to as “bill and hold”
transactions).  In such circumstances, among other things, risk of
ownership has passed to the buyer, the buyer has made a written fixed commitment
to purchase the finished goods, the buyer has requested the finished goods to be
held for future delivery as scheduled and designated by the buyer, and no
additional performance obligations by the Company exist.  For these
transactions, the finished goods are segregated from inventory and normal
billing and credit terms are granted.  For the three months ended
November 28, 2008, revenues in the amount of $96,000 were recorded as bill and
hold transactions.





21


These
policies require management, at the time of the transaction, to assess whether
the amounts due are fixed or determinable, collection is reasonably assured, and
if future performance obligations exist.  These assessments are based
on the terms of the agreement with the customer, past history and credit
worthiness of the customer.  If management determines that collection
is not reasonably assured or future performance obligations exist, revenue
recognition is deferred until these conditions are satisfied.





Our
principal sources of revenues are from the sales of various satellite
communications equipment.  Embedded in our products is internally
developed software of varying applications.  Historically, we have not
sold or marketed our software separately or otherwise licensed our software
apart from the related communications equipment.  Should we begin to
market or sell software whereby it is more than an incidental component of the
hardware, then we would recognize software license revenue in accordance with
SOP No. 97-2, “Software Revenue Recognition,” as amended by SOP No. 98-9,
“Software Revenue Recognition, with Respect to Certain
Transactions.”  Significant judgment may be required in determining
whether a product is a software or hardware product.





Inventory
Reserves-Inventories are valued at the lower of cost (at standard, which
approximates actual cost on a first-in, first-out basis) or
market.  Inventories include the cost of raw materials, labor and
manufacturing overhead.  We make inventory reserve provisions for
obsolete or slow-moving inventories as necessary to properly reflect inventory
value.  These reserves are to provide for items that are potentially
slow-moving, excess or obsolete.  Changes in market conditions, lower
than expected customer demand and rapidly changing technology could result in
additional obsolete and slow-moving inventory that is unsaleable or saleable at
reduced prices, which could require additional inventory reserve
provisions.  AtNovember 28, 2008,
inventories, net of reserve provisions, amounted to $6,397,000.





Capitalized
Software Costs-Software development costs are capitalized subsequent to establishing
technological feasibility.  Capitalized costs are amortized based on
the larger of the amounts computed using (a) the ratio that current gross
revenues for each product bears to the total of current and anticipated future
gross revenues for that product or (b) the straight-line method over the
remaining estimated economic life of the product.  Expected future
revenues and estimated economic lives are subject to revisions due to market
conditions, technology changes and other factors resulting in shortfalls of
expected revenues or reduced economic lives, which could result in additional
amortization expense or write-offs.  AtNovember 28, 2008,
capitalized software costs, net of accumulated amortization, amounted to
$1,221,000.





Deferred
Tax Asset Valuation Allowance – Deferred tax assets are recognized for
deductible temporary differences, net operating loss carryforwards, and credit
carryforwards if it is more likely than not that the tax benefits will be
realized.  Realization of our deferred tax assets depends on
generating sufficient future taxable income prior to the expiration of the loss
and credit carryforwards. At November 28, 2008, deferred tax assets in the
amount of $6,308,000 were fully reserved by a valuation allowance. For the three
months ended November 28, 2008, the valuation allowance was increased by
$430,000.





Accounts
Receivable Valuation – We maintain allowances for doubtful accounts for
estimated losses resulting from the inability of our customers to make required
payments.  If the financial condition of our customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances would be required.  At November 28, 2008,
accounts receivable, net of allowances for doubtful accounts, amounted to
$1,906,000.





22


ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The
Company’s exposure to market rate risk for changes in interest rates relates
primarily to its revolving line of credit and cash equivalents.  The
interest rate on certain advances under the line of credit and term loan
facility fluctuates with the bank’s prime rate (4.0% at November 28,
2008).  At November 28, 2008, line of credit outstanding borrowings
amounted to $3,314,000.





The
Company does not enter into derivative financial instruments.  All
sales and purchases are denominated in U.S. dollars.





ITEM
4. CONTROLS AND PROCEDURES




Not
applicable





ITEM
4T. CONTROLS AND PROCEDURES




The
Company carried out an evaluation, under the supervision and with the
participation of the Company’s management, including the Chief Executive Officer
(CEO) and the Chief Financial Officer (CFO), of the effectiveness of the design
and operation of the Company’s disclosure controls and procedures as of the end
of the period covered by this report (November 28, 2008).  Based upon
that evaluation, the Company’s CEO and CFO have concluded that the Company’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934, as amended) are effective. There has
been no change in the Company’s internal control over financial reporting during
our most recent fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.





PART II.  OTHER
INFORMATION





ITEM
1A. RISK FACTORS





Our
operations and financial results are subject to various risks and uncertainties
that could adversely affect our business, financial condition, results of
operations, and the market price for our Common Stock. Part I, Item 1A, “Risk
Factors,” contained in our Annual Report on Form 10-K for the year ended August
29, 2008, includes a detailed discussion of these factors which have not changed
materially from those included in the Form 10-K, other than as set forth
below.




We
may not have sufficient capital to continue as a going concern and our existing
lender has notified us that it will not renew our line of credit when the line matures on
September 30, 2009.




Bookings
and revenues to date were insufficient to provide adequate levels of cash flow
from operations or adequate levels of collateral to support required borrowings
during fiscal 2009.  In addition, subsequent to November 28, 2008, our
bank notified WCI of its intent not to renew our loan facility when it matures
on September 30, 2009. As a result, we need to raise additional capital or
obtain additional credit facilities during fiscal 2009 to
continue as a going concern and to execute our business plan.Although we
are in discussions with potential financing sources, if we are unsuccessful in
securing additional capital during this period, through additional equity and/or
debt financing, we may not be able to continue as a going
concern.  See also Note 1 to the Consolidated Financial Statements and
“MD&A - Liquidity and Capital Resources.”





23


ITEM
6. EXHIBITS





The
following documents are filed as exhibits to this report.  An asterisk
identifies those exhibits previously filed and incorporated herein by reference
below.  For each such asterisked exhibit there is shown below the
description of the previous filing.  Exhibits which are not required
for this report are omitted.





Exhibit No.
              
              
              Description of Exhibit3.1
              *
              
              Certificate
      of Incorporation as amended through May 4, 1989. (1)3.1.1
              *
              
              Amendment
      to Certificate of Incorporation. (2)3.2
              *
              
              By-laws
      of the Company, as Amended and Restated May 17, 2006.
  (3)10.1
              
              
              Land
      Sale Contract31.1
              
              
              Certification
      of the Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
              
              
              Certification
      of the Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
              
              
              Certification
      of the Chief Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
              
              
              Certification
      of the Chief Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.








(1)
            
            Incorporated
      by reference to the Company's Annual Report on Form 10-K for the fiscal
      year ended September 1, 1989, as filed with the Commission on November 30,
      1989.+(2)
            
            Incorporated
      by reference to the Company's Quarterly Report on Form 10-Q for the
      quarter ended May 30, 1997, as filed with the Commission on June 30,
      1997.+(3)
            
            Incorporated
      by reference to the Company's Current Report on Form 8-K, dated May 17,
      2006, as filed with the Commission on May 22, 2006.++
            
            SEC
      file No. 0-11003





24





SIGNATURES








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.





WEGENER
      CORPORATION(Registrant)Date:  January
      12, 2009
                                  By:
                                  /s/ Robert A. PlacekRobert
      A. PlacekPresident(Principal
      Executive Officer)Date:
      January 12, 2009
                                  By:
                                  /s/ C. Troy Woodbury,
Jr.C.
      Troy Woodbury, Jr.Treasurer
      and ChiefFinancial
      Officer(Principal
      Financial and Accounting
Officer)





25