**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
  **FORM
        10-Q**
  (Mark
        One)
 x **QUARTERLY
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** **SECURITIES
        EXCHANGE ACT OF 1934**
  For
        the
        quarterly period ended June 1, 2007
  **OR**
  **o
        TRANSITION 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 jurisdictionof
                  incorporation or organization)
              
              (I.R.S.
                  EmployerIdentification
                  No.)**11350
                  Technology Circle, Duluth, 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**x**** **No**o
 
 Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer.
 See
        definition of “accelerated filer and large accelerated filer” in Rule 12b-2
        of the Exchange Act. (Check one):
  Large
        accelerated filer ****o **** Accelerated
        filer ****o **** Non-accelerated
        filer ****x
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Act).  **Yes**o**** **No**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 June 30, 2007
  
  **WEGENER
        CORPORATION**
 **Form
        10-Q For the Quarter Ended June 1, 2007**
 
 **INDEX**
 
 **PART
                  I.  Financial Information**Item
                  1.
              Financial
                  StatementsIntroduction
              3Consolidated
                  Statements of Operations (Unaudited) - Three and Nine Months EndedJune
                  1, 2007 and June 2, 2006
              4Consolidated
                  Balance Sheets - June 1, 2007(Unaudited)
                  and September 1, 2006
              5Consolidated
                  Statements of Shareholders' Equity(Unaudited)
                  - Nine Months EndedJune
                  1, 2007 and June 2, 2006
              6Consolidated
                  Statements of Cash Flows(Unaudited)
                  - Nine Months EndedJune
                  1, 2007 and June 2, 2006
              7Notes
                  to Consolidated FinancialStatements
                  (Unaudited)
              8-15Item
                  2.
              Management's
                  Discussion and Analysis of FinancialCondition
                  and Results of Operations
              16-22Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              22Item
                  4.
              Controls
                  and Procedures
              22Item
                  4T.
              Controls
                  and Procedures
              22**PART
                  II.  Other Information**Item
                  1.
              Legal
                  Proceedings
              23Item
                  6.
              Exhibits
              24Signatures
              25
  2
  **PART
        I.****FINANCIAL
        INFORMATION**
 
 **ITEM
        1.**  **FINANCIAL
        STATEMENTS**
 
 **INTRODUCTION
        - CONSOLIDATED FINANCIAL STATEMENTS**
 
 The
        consolidated financial statements of WegenerTM Corporation (the “Company”, “we”, “our” or “us”) included herein have been
        prepared pursuant to the rules and regulations of the Securities and Exchange
        Commission. The consolidated balance sheet as of June 1, 2007; the consolidated
        statements of shareholders' equity as of June 1, 2007, and June 2, 2006;
        the
        consolidated statements of operations for the three and nine months ended
        June
        1, 2007, and June 2, 2006; and the consolidated statements of cash flows
        for the
        nine months ended June 1, 2007, and June 2, 2006; have been prepared without
        audit. The consolidated balance sheet as of September 1, 2006, 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 September
        1,
        2006, File No. 0-11003.
 
 In
        the
        opinion 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 ended
              
              Nine
                  months ended**June
                  1,**
                **2007**
              
              June
                  2,
                2006
              
              **June
                  1,**
                **2007**
              
              June
                  2,
                2006Revenue
              
              **$**
              **6,247,080**
              
              $
              6,607,740
              
              **$**
              **15,801,222**
              
              $
              16,171,931Operating costs and expensesCost of products sold
              
              
              **3,975,135**
              
              
              4,197,714
              
              
              **10,402,187**
              
              
              10,608,076Selling, general and administrative
              
              
              **1,274,377**
              
              
              1,496,556
              
              
              **3,910,969**
              
              
              4,890,172Research and development
              
              
              **707,445**
              
              
              734,078
              
              
              **2,301,613**
              
              
              2,218,518Operating costs and expenses
              
              
              **5,956,957**
              
              
              6,428,348
              
              
              **16,614,769**
              
              
              17,716,766Operating income (loss)
              
              
              **290,123**
              
              
              179,392
              
              
              **(813,547**
              **)**
              
              (1,544,835
              )Interest expense
              
              
              **(39,923**
              **)**
              
              (42,942
              )
              
              **(90,448**
              **)**
              
              (68,273
              )Interest income
              
              
              **502**
              
              
              1,326
              
              
              **9,473**
              
              
              6,751Earnings (loss) before income taxes
              
              
              **250,702**
              
              
              137,776
              
              
              **(894,522**
              **)**
              
              (1,606,357
              )Income tax benefit
              
              
              **-**
              
              
              -
              
              
              **-**
              
              
              -Net earnings (loss )
              
              **$**
              **250,702**
              
              $
              137,776
              
              **$**
              **(894,522**
              **)**
              $
              (1,606,357
              )Net earnings (loss) per share:Basic
              
              **$**
              **0.02**
              
              $
              0.01
              
              **$**
              **(0.07**
              **)**
              $
              (0.13
              )Diluted
              
              **$**
              **0.02**
              
              $
              0.01
              
              **$**
              **(0.07**
              **)**
              $
              (0.13
              )Shares used in per share calculationBasic
              
              
              **12,647,051**
              
              
              12,579,051
              
              
              **12,602,992**
              
              
              12,579,051Diluted
              
              
              **12,691,220**
              
              
              12,765,925
              
              
              **12,602,992**
              
              
              12,579,051
 
 See
        accompanying notes to consolidated financial statements.
  4
  **WEGENER
        CORPORATION AND SUBSIDIARIES**
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **June
                  1,**
                **2007**
              
              September
                  1,
                2006**(Unaudited**)**Assets**Current assetsCash and cash equivalents
              
              **$**
              **18,566**
              
              $
              958,784Accounts receivable, net
              
              
              **4,293,489**
              
              
              1,780,121Inventories, net
              
              
              **4,198,200**
              
              
              3,858,027Other
              
              
              **128,585**
              
              
              233,127Total current assets
              
              
              **8,638,840**
              
              
              6,830,059Property and equipment, net
              
              
              **1,788,998**
              
              
              2,288,148Capitalized software costs, net
              
              
              **1,243,180**
              
              
              1,229,790Other assets
              
              
              **619,534**
              
              
              779,968Land held for sale
              
              
              **353,712**
              
              
              -**$**
              **12,644,264**
              
              $
              11,127,965**Liabilities and Shareholders’ Equity**Current liabilitiesBank line of credit
              
              **$**
              **2,041,563**
              
              $
              -Accounts payable
              
              
              **1,934,231**
              
              
              1,526,309Accrued expenses
              
              
              **3,362,791**
              
              
              3,262,448Customer deposits
              
              
              **1,051,011**
              
              
              1,264,805Total current liabilities
              
              
              **8,389,596**
              
              
              6,053,562Commitments and contingenciesShareholders’ equityCommon stock, $.01 par value; 20,000,000 shares
                  authorized; 12,647,051 and 12,579,051 shares
                  respectively, issued and outstanding
              
              
              **126,471**
              
              
              125,791Additional paid-in capital
              
              
              **19,999,022**
              
              
              19,924,915Deficit
              
              
              **(15,870,825**
              **)**
              
              (14,976,303
              )Total shareholders’ equity
              
              
              **4,254,668**
              
              
              5,074,403**$**
              **12,644,264**
              
              $
              11,127,965
  See
        accompanying notes to consolidated financial statements.
  5
  **WEGENER
        CORPORATION AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF SHAREHOLDERS’ EQUITY**
 (Unaudited)
  Common
                  Stock
              
              Additional
                Paid-in
                Capital
              
              DeficitShares
              
              AmountBalance at September 2, 2005
              
              
              12,579,051
              
              $
              125,791
              
              $
              19,892,482
              
              $
              (12,093,308
              )Share-based compensation
              
              
              -
              
              
              -
              
              
              29,933
              
              
              -Net loss for the nine months
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,606,357
              )BALANCE at June 2, 2006
              
              
              12,579,051
              
              $
              125,791
              
              $
              19,922,415
              
              $
              (13,699,665
              )Balance at September 1, 2006
              
              
              12,579,051
              
              $
              125,791
              
              $
              19,924,915
              
              $
              (14,976,303
              )Share-based compensation
              
              
              -
              
              
              -
              
              
              17,667
              
              
              -Common stock issued through
                  stock options
              
              
              68,000
              
              
              680
              
              
              56,440
              
              
              -Net loss for the nine months
              
              
              -
              
              
              -
              
              
              -
              
              
              (894,522
              )**BALANCE at June 1, 2007**
              
              
              **12,647,051**
              
              **$**
              **126,471**
              
              **$**
              **19,999,022**
              
              **$**
              **(15,870,825**
              **)**
  See
        accompanying notes to consolidated financial statements.
  6
  **WEGENER
        CORPORATION AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 (Unaudited)
 Nine
                  months ended**June
                  1,**
                **2007**
              
              June
                  2,
                2006**Cash flows from operating activities**Net loss
              
              **$**
              **(894,522**
              **)**
              $
              (1,606,357
              )Adjustments to reconcile net loss to
                  cash used for operating activitiesDepreciation and amortization
              
              
              **1,772,258**
              
              
              2,028,829Share-based compensation expense
              
              
              **17,667**
              
              
              29,933Provision for bad debts
              
              
              **(50,000**
              **)**
              
              (35,000
              )Provision for inventory reserves
              
              
              **250,000**
              
              
              175,000Provision for warranty reserves
              
              
              **150,000**
              
              
              110,000Changes in assets and liabilitiesAccounts receivable
              
              
              **(2,463,368**
              **)**
              
              (2,065,878
              )Inventories
              
              
              **(590,173**
              **)**
              
              (591,393
              )Other assets
              
              
              **104,542**
              
              
              (193,865
              )Accounts payable and accrued expenses
              
              
              **358,265**
              
              
              1,816,950Customer deposits
              
              
              **(213,794**
              **)**
              
              185,969Net cash used for operating activities
              
              
              **(1,559,125**
              **)**
              
              (145,812
              )**Cash flows from investment activities**Property and equipment expenditures
              
              
              **(169,470**
              **)**
              
              (179,539
              )Capitalized software additions
              
              
              **(1,157,567**
              **)**
              
              (1,099,448
              )License agreement, patent, and trademark expenditures
              
              
              **(152,739**
              **)**
              
              (59,007
              **)**Net cash used for investing activities
              
              
              **(1,479,776**
              **)**
              
              (1,337,994
              )**Cash flows from financing activities**Net borrowings under revolving line of credit
              
              
              **2,041,563**
              
              
              423,453Proceeds from stock options exercised
              
              
              **57,120**
              
              
              -Net cash provided by financing activities
              
              
              **2,098,683**
              
              
              423,453Decrease in cash and cash equivalents
              
              
              **(940,218**
              **)**
              
              (1,060,353
              )Cash and cash equivalents, beginning of period
              
              
              **958,784**
              
              
              1,106,872Cash and cash equivalents, end of period
              
              **$**
              **18,566**
              
              $
              46,519Supplemental disclosure of cash flow information:Cash paid during the nine months for:
                Interest
              
              **$**
              **90,448**
              
              $
              68,273
 
 See
        accompanying notes to consolidated financial statements.
  7


**WEGENER
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**Note
      1 Description of Business**




We
      design
      and manufacture equipment for the receiving and transmitting of video, audio
      and
      data programming over satellite, cable, broadcast and terrestrial networks.
      Applications for our equipment include cable and broadcast television,
      high-definition television, business television, IP data delivery, digital
      signage, business music, distance education, radio networks and financial
      information distribution.





The
      equipment we provide enables our customers to implement complex networks
      involving real time switching and control to help them achieve their business
      plans. Using our technologies, our customers can provide targeted programming
      and advertising capabilities to their clients.





We
      also
      make a complete line of signal processing equipment used by the cable television
      industry to provide off-air digital and high definition signals to its
      subscribers. This equipment receives the signals from local terrestrial
      broadcasters and processes them in ways that make these signals compatible
      with
      existing cable plant infrastructure in wide use today.





Our
      primary customers are major broadcast networks, operators of large private
      satellite broadcast networks, and major cable television systems
      operators.




Our
      principal sources of revenues are from the sales of 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. We operate in one business segment, the manufacture and sale of
      satellite communications equipment.





**Note
      2**  **Significant
      Accounting Policies**




The
      significant accounting policies followed by the Company are set forth in Note
      1
      to the Company's audited consolidated financial statements included in the
      Annual Report on Form 10-K for the year ended September 1, 2006.





**Revenue
      Recognition**





Our
      principal sources of revenues are from the sales of hardware products, network
      control software products, services and software and hardware maintenance
      contracts.





Our
      revenue recognition policies are in compliance with Staff Accounting Bulletin
      (SAB) No. 104, “Revenue Recognition”, SAB No. 101, “Revenue Recognition in
      Financial Statements” and EITF Issue No. 00-21, "Revenue Arrangements with
      Multiple Deliverables." 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 June 1, 2007, deferred extended
      service maintenance revenues were $416,000 and deferred revenues related to
      future performance obligations were $408,000 and are expected to be recognized
      as revenue in varying amounts throughout fiscal 2007 and into fiscal
      2008.





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 be held for future delivery as scheduled and
      designated by the buyer, and no additional performance obligations exist by
      the
      Company. For these transactions, the finished goods are segregated from
      inventory and normal billing and credit terms are granted. For the three and
      nine months ended June 1, 2007, revenues in the amount of $2,967,000 and
      $3,006,000, respectively, were appropriately recorded prior to delivery as
      bill
      and hold transactions in accordance with the provisions of SAB 104. At June
      1,
      2007, accounts receivable for these revenues amounted to $2,029,000.


8





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.





Embedded
      in our 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
      account for the product as a software product. Revenue on software products
      and
      software-related elements is recognized in accordance with Statement
      of Position (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 include in revenues all shipping and handling billings to customers,
      and freight costs incurred for product shipments are 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**





In
      December 2004, the Financial Accounting Standards Board (FASB) issued Statement
      of Financial Accounting Standards (SFAS) No. 123 (Revised 2004), “Share-Based
      Payment” (SFAS 123R). SFAS 123R requires all share-based payments to employees,
      including grants of employee stock options, to 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). We adopted SFAS 123R effective
      beginning September 3, 2005 using the Modified Prospective Application Method.
      Under this method, SFAS 123R applies to new awards and to awards modified,
      repurchased or cancelled after the effective date. For the three and nine months
      ended June 1, 2007, stock-based compensation expense included in selling,
      general and administrative expenses amounted to $0 and $17,700, respectively,
      compared to $3,000 and $30,000, respectively, for the same periods ended June
      2,
      2006. The weighted average fair value of options granted during the nine months
      ended June 1, 2007 was $0.90 with an aggregate total value of $16,000. The
      weighted average fair value of options granted during the nine months ended
      June
      2, 2006 was $1.07 with an aggregate total value of $34,000. As of June 1, 2007,
      no compensation costs related to non-vested stock options remain to be
      recognized.




The
      fair
      value of each option was estimated on the date of grant using the Black-Scholes
      option pricing model with the following weighted average
      assumptions:





Three
                months ended
            
            Nine
                months ended**June
                1,**
              **2007**
            
            June
                2,
              2006
            
            **June
                1,**
              **2007**
            
            June
                2,
              2006Risk
                free interest rate
            
            
            **-**
            
            
            **-**
            
            
            **4.70**%****
            
            
            4.41%Expected
                term
            
            
            **-**
            
            
            **-**
            
            
            **10.0
                years**
            
            
            5.6
                yearsVolatility
            
            
            **-**
            
            
            **-**
            
            
            **90**%****
            
            
            90%Expected
                annual dividends
            
            
            **-**
            
            
            **-**
            
            
            **none**
            
            
            none




9





The
      following table summarizes stock option transactions for the nine months ended
      June 1, 2007:





**Number
                of Shares**
            
            
            **Range
                of Exercise Prices**
            
            
            **Weighted**
              **Average**
              **Exercise
                Price**Outstanding at
                September 1, 2006
            
            
            1,282,531
            
            $
            .63
                - 2.72
            
            $
            1.56Granted
            
            
            18,000
            
            
            1.03
            
            
            1.03Exercised
            
            
            (68,000
            )
            
            .84
            
            
            .84Forfeited or cancelled
            
            
            (220,000
            )
            
            .84
                - 2.39
            
            
            2.31**Outstanding at
                June 1, 2007**
            
            
            **1,012,531**
            
            **$**
            **.63
                - 2.72**
            
            **$**
            **1.51****Available for issue at
                June 1, 2007**
            
            
            **743,669**
            
            
            **-**
            
            
            **-****Options exercisable at
                June 1, 2007**
            
            
            **1,012,531**
            
            **$**
            **.63
                - 2.72**
            
            **$**
            **1.51**September 1, 2006
            
            
            1,272,531
            
            $
            .63
                - 2.72
            
            $
            1.56





The
      key
      terms of the stock options granted under our stock plans are set forth in the
      Company's Annual Report on Form 10-K for the fiscal year ended September 1,
      2006.





**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 revenues and expenses during the reporting period.
      Actual results could vary from these estimates.





**Fiscal
      Year**





The
      Company uses a fifty-two, fifty-three week year. The fiscal year ends on the
      Friday closest to August 31. Fiscal years 2007 and 2006 contain fifty-two weeks.





**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 June 1, 2007,
      outstanding checks in the amounts of $429,000 were included in accounts payable
      balances.




**Note
      3**  **Accounts
      Receivable**





Accounts
      receivable are summarized as follows:





**June
                1,**
              **2007**
            
            
            September
                1,
              2006**(Unaudited)**Accounts
                receivable – trade
            
            **$**
            **4,468,837**
            
            $
            2,004,625Other
                receivables
            
            
            **75,969**
            
            
            76,508**4,544,806**
            
            
            2,081,133Less
                allowance fordoubtful
                accounts
            
            
            **(251,317**
            **)**
            
            (301,012
            )**$**
            **4,293,489**
            
            $
            1,780,121




10




**Note
      4**  **Inventories**





Inventories
      are summarized as follows:





**June
                1,**
              **2007**
            
            
            September
                1,
              2006**(Unaudited)**Raw
                material
            
            **$**
            **3,821,281**
            
            $
            3,834,953Work-in-process
            
            
            **864,481**
            
            
            887,142Finished
                goods
            
            
            **3,604,751**
            
            
            2,978,245**8,290,513**
            
            
            7,700,340Less
                inventory reserves
            
            
            **(4,092,313**
            **)**
            
            (3,842,313
            )**$**
            **4,198,200**
            
            $
            3,858,027





During
      the first nine months of fiscal 2007, inventory reserves were increased by
      provisions of $250,000. Our inventory reserve of approximately $4,092,000 at
      June 1, 2007 is 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. 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 authorized and approved listing
      for sale the 4.4 acres of undeveloped land located adjacent to its headquarters
      facility in Duluth (Johns Creek), Georgia. The Company evaluated the criteria
      of
      Statement of Financial Standards (SFAS) No. 144 (as amended), “Accounting for
      the Impairment or Disposal of Long-Lived Assets” (SFAS 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 $353,712 (lower of carrying amount or fair value less costs
      to
      sell) in the consolidated balance sheet as of June 1, 2007. The land was
      acquired in August 1989 and no impairment charges were recorded related to
      the
      reclassification.




**Note
      6**  **Other
      Assets**





Other
      assets consisted of the following:





**June
                1, 2007********(unaudited)****Cost**
            
            
            **Accumulated**
              **Amortization**
            
            
            **Net**License
                agreements
            
            **$**
            **908,800**
            
            **$**
            **(819,242**
            **)**
            **$**
            **89,558**Patent
                applications
            
            
            **464,373**
            
            
            **(10,739**
            **)**
            
            **453,634**Trademarks
            
            
            **89,736**
            
            
            **(23,408**
            **)**
            
            **66,328**Loan
                facility fees
            
            
            **37,500**
            
            
            **(34,375**
            **)**
            
            **3,125**Other
            
            
            **6,889**
            
            
            **-**
            
            
            **6,889****$**
            **1,507,298**
            
            **$**
            **(887,764**
            **)**
            **$**
            **619,534**




11




September
                1, 2006Cost
            
            
            Accumulated
              Amortization
            
            
            NetLicense
                agreements
            
            $
            798,800
            
            $
            (550,037
            )
            $
            248,763Patent
                applications
            
            
            421,633
            
            
            (2,252
            )
            
            419,381Trademarks
            
            
            89,736
            
            
            (16,051
            )
            
            73,685Loan
                facility fees
            
            
            37,500
            
            
            (6,250
            )
            
            31,250Other
            
            
            6,889
            
            
            -
            
            
            6,889$
            1,354,558
            
            $
            (574,590
            )
            $
            779,968




Amortization
      expense of other assets for the three and nine months ended June 1, 2007,
      amounted to $190,000 and $313,000, respectively. Amortization expense for the
      three and nine months ended June 1, 2007 included $111,000 related to write-offs
      of remaining net balances of certain license agreements due to termination
      of
      the agreements. Amortization expense of other assets for the three and nine
      months ended June 2, 2006, amounted to $138,000 and $227,000, respectively.
      Amortization expense for the three and nine months ended June 2, 2006 included
      $85,000 related to write-offs of remaining net balances of certain license
      agreements due to termination of the agreements.





We
      conduct an ongoing review of our intellectual property rights and potential
      trademarks. As of June 1, 2007, we have cumulatively incurred $334,000 of legal
      fees related to the filing of applications for various patents not yet approved
      and $36,000 related to the filing of trademarks. Upon issuance, these costs
      will
      be amortized on a straight-line basis over the lesser of the legal life of
      the
      patents and trademarks or their estimated useful lives. If it becomes more
      likely than not that a patent application will not be granted, we will write-off
      the deferred cost at that time. At June 1, 2007, the cost of registered patents
      and trademarks amounted to $131,000 and $54,000, respectively. License
      agreements are amortized over their estimated useful life of one to five years.
      Loan facility fees are amortized over 12 months.





**Note
      7 Liquidity**





At
      June
      1, 2007, 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. At
      June
      1, 2007, we had line of credit borrowings outstanding of $2,042,000. At June
      1,
      2007, **** approximately
      $1,408,000, net of outstanding letters of credit in the amount of $659,000,
      was
      available to borrow under the advance formulas. Cash and cash equivalents
      decreased $940,000 during the first nine months of fiscal 2007.





During
      the first nine months of fiscal 2007, operating activities used $1,559,000
      of
      cash. Net losses adjusted for noncash expenses provided $1,245,000 of cash,
      while changes in accounts receivable and customer deposit balances used
      $2,677,000 of cash. Changes in inventories, accounts payable and accrued
      expenses, and other assets used $127,000 of cash. Cash used by investing
      activities was $169,000 for property and equipment expenditures, $1,158,000
      for
      capitalized software additions and $153,000 for legal fees related to the filing
      of applications for various patents and trademarks. Financing activities
      provided $2,042,000 of cash from the net line-of-credit borrowings and $57,000
      of cash from exercised stock options.





Subsequent
      to June 1, 2007, WCI’s bank loan facility was renewed effective July 1, 2007.
      The renewed facility provides a maximum available credit limit of $5,000,000
      subject to availability advance formulas. The loan facility matures on September
      30, 2008, or upon demand and requires an annual facility fee of 2.00%
      (previously .75%) of the maximum credit limit. 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 (8.25% at June 1, 2007).
      The bank retained the right to adjust the interest rate, subject to the
      financial performance of the Company.





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
      60months 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 renewed
      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 June 1, 2007, balances outstanding on
      the
      revolving line of credit amounted to $2,042,000. 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, which at June 1, 2007 amounted to $659,000.
      At
      June 1, 2007, **** approximately
      $1,408,000, net of outstanding letters of credit, was available to borrow under
      the advance formulas. During the third quarter of fiscal 2007, the average
      daily
      balance outstanding was $949,000 and the highest outstanding balance was
      $2,476,000. We expect average outstanding borrowings to increase in the fourth
      quarter of fiscal 2007. We believe the renewed loan facility will be sufficient
      to support operations over the next 12 months.


12





At
      June
      1, 2007, 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. While no assurances may be given, we believe these assets could
      be
      used to support additional overall borrowing capacities either with our existing
      bank or from other sources. During the third quarter of fiscal 2007, the Company
      authorized and approved for sale the 4.4 acres of undeveloped land located
      adjacent to its headquarters facility in Duluth (Johns Creek), Georgia (see
      note
      5). Proceeds from the sale of the land would be used to pay any balances
      outstanding on the revolving line of credit.




Under
      the
      loan facility, we are required at the end of the first three quarters in fiscal
      2007 and fiscal 2008, to maintain either a minimum tangible net worth or a
      minimum borrowing availability. At each fiscal year end, commencing with fiscal
      year 2007, we are required to maintain a minimum tangible net worth with
      increased amounts at subsequent fiscal year ends. In addition, we are to retain
      certain key employees, maintain certain financial ratios, and are precluded
      from
      paying dividends. At June 1, 2007, we were in compliance with the
      covenants.





**Note
      8**  **Income
      Taxes**





For
      the
      nine months ended, June 1, 2007 no income tax benefit was recorded due to an
      increase in the deferred tax asset valuation allowance. The valuation allowance
      increased $322,000 in the first nine months of fiscal 2007. At June 1, 2007,
      net
      deferred tax assets of $6,070,000, were fully reserved by a valuation
      allowance.




At
      June
      1, 2007, we had a federal net operating loss carryforward of approximately
      $10,063,000, which expires beginning fiscal 2020 through fiscal 2027.
      Additionally, we had an alternative minimum tax credit of $138,000 and state
      income tax credits of $199,000 expiring in fiscal 2009, both of which were
      fully
      offset by the valuation allowance.





**Note
      9 Earnings Per Share (Unaudited)**





The
      following tables represent required disclosure of the reconciliation of the
      numerators and denominators of the basic and diluted net earnings per share
      computations.





Three
                months ended**June
                1, 2007**
            
            June
                2, 2007**Earnings**
              **(Numerator)**
            
            
            **Shares**
              **(Denominator**)****
            
            
            **Per**
              **share**
              **amount**
            
            
            Earnings
                (Numerator)
            
            
            Shares
                (Denominator)
            
            
            Per
              share
              amountNet earnings
            
            **$**
            **250,702**
            
            
            
            
            
            
            
            $
            137,776**Basic earnings per share**:Net earnings availableto
                common shareholders
            
            **$**
            **250,702**
            
            
            **12,647,051**
            
            **$**
            **0.02**
            
            $
            137,776
            
            
            12,579,051
            
            $
            0.01Effect of dilutive potentialcommon shares: 
                Stock options
            
            
            **-**
            
            
            **44,169**
            
            
            
            
            
            -
            
            
            186,874**Diluted earnings per share:**Net earnings availableto
                common shareholders
            
            **$**
            **250,702**
            
            
            **12,691,220**
            
            **$**
            **0.02**
            
            $
            137,776
            
            
            12,765,925
            
            $
            0.01




13




Nine
                months ended**June
                1, 2007**
            
            June
                2, 2006**Earnings
                (Numerator)**
            
            
            **Shares
                (Denominator**)****
            
            
            **Per**
                **share**
                **amount**
            
            
            Earnings
                  (Numerator)
            
            
            Shares
                (Denominator)
            
            
            Per
                share
                amountNet loss
            
            **$**
            **(894,522**
            **)**
            
            
            
            
            
            
            $
            (1,606,357
            )**Basic loss per share:**Net loss available
                to common shareholders
            
            **$**
            **(894,522**
            **)**
            
            **12,602,992**
            
            **$**
            **(0.07**
            **)**
            $
            (1,606,357
            )
            
            12,579,051
            
            $
            (0.13
            )Effect of dilutive potential
                common shares:Stock options
            
            
            **-**
            
            
            **-**
            
            
            
            
            
            -
            
            
            -**Diluted loss  per share**:Net loss available
                to common shareholders
            
            **$**
            **(894,522**
            **)**
            
            **12,602,992**
            
            **$**
            **(0.07**
            **)**
            $
            (1,606,357
            )
            
            12,579,051
            
            $
            (0.13
            )




Stock
      options excluded from the diluted net earnings (loss) per share calculation
      due
      to their anti-dilutive effect are as follows:





Three
                months ended
            
            Nine
                months ended**June
                1,2007**
            
            June
                2,2006
            
            **June
                1,2007**
            
            June
                2,2006Common stock options:
              Number of shares
            
            
            **692,156**
            
            
            635,156
            
            
            **1,012,531**
            
            
            1,282,531Exercise price
            
            
            **$
                  1.09 to $2.72**
            
            
            $0.63
                  to $2.72
            
            
            **$**0.63
                  to $2.72
            
            
            $0.63
                  to $2.72




**Note
      10 Segment Information and Significant Customers
      (Unaudited)**





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 ended
            Nine
                months ended**June
                1,**
              **2007**
            
            
            June
                2,
              2006
            
            
            **June
                1,**
              **2007**
            
            
            June
                2,
              2006Product LineDirect Broadcast Satellite
            
            **$**
            **6,037,788**
            
            $
            6,418,802
            
            **$**
            **15,250,041**
            
            $
            15,618,256Analog and Custom Products
            
            
            **63,204**
            
            
            74,641
            
            
            **125,789**
            
            
            121,723Service
            
            
            **146,088**
            
            
            114,297
            
            
            **425,392**
            
            
            431,952**$**
            **6,247,080**
            
            $
            6,607,740
            
            **$**
            **15,801,222**
            
            $
            16,171,931




14




Revenues
      by geographic area are as follows:





Three
                months ended
            
            Nine
                months ended**June
                1,**
              **2007**
            
            June
                2,
              2006
            
            **June
                1,**
              **2007**
            
            June
                2,
              2006Geographic AreaUnited States
            
            **$**
            **4,022,462**
            
            $
            4,221,327
            
            **$**
            **12,377,705**
            
            $
            13,305,349Latin America
            
            
            **1,738,505**
            
            
            12,874
            
            
            **1,780,675**
            
            
            100,950Canada
            
            
            **9,310**
            
            
            55,703
            
            
            **113,642**
            
            
            136,821Europe
            
            
            **476,431**
            
            
            2,301,734
            
            
            **1,516,433**
            
            
            2,605,968Other
            
            
            **372**
            
            
            16,102
            
            
            **12,767**
            
            
            22,843**$**
            **6,247,080**
            
            $
            6,607,740
            
            **$**
            **15,801,222**
            
            $
            16,171,931





All
      of
      our long-lived assets are located in the United States. Customers representing
      10% or more of the respective periods’ revenues are as follows:





Three
                months ended
            Nine
                months ended**June
                1,****2007**
            
            
            June
                2,
              2006
            
            
            **June
                1,**
              **2007**
            
            
            June
                2,
              2006Customer
                1
            
            
            **26.4%**
            
            
            (a)
            
            
            **10.4%**
            
            
            (a)Customer
                2
            
            
            **21.3%**
            
            
            (a)
            
            
            **19.4%**
            
            
            (a)Customer
                3
            
            
            **(a)**
            
            
            26.3%
            
            
            **(a)**
            
            
            22.4%Customer
                4
            
            
            **(a)**
            
            
            24.2%
            
            
            **(a)**
            
            
            10.3%




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





**Note
      11 Commitments**





We
      have
      two manufacturing and purchasing agreements for certain finished goods
      inventories. At June 1, 2007, outstanding purchase commitments under these
      agreements amounted to $3,354,000. Pursuant to the above agreements, at June
      1,
      2007, we had outstanding letters of credit in the amount of $659,000.





**Note
      12 Guarantees and Warranty Liability**





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 provisions
      which remained outstanding at June 1, 2007, amounted to $380,000. For the nine
      months ended June 1, 2007, accrued warranty provisions were increased by
      $150,000 for additional estimated warranty claims and were reduced by $105,000
      for satisfied claims. Warranty expense recognized during the nine months ended
      June 1, 2007, amounted to $150,000.





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 June 1, 2007,
      outstanding letters of credit amounted to $659,000.





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 June 1, 2007, balances
      outstanding on the loan facility were $2,042,000.




15




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 September 1, 2006, contained in the Company’s 2006 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 conditions which may not improve during fiscal year 2007 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
        uncertainties detailed from time to time in the Company’s periodic Securities
        and Exchange Commission filings, including the Company’s most recent 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. 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 a leading provider
        of digital solutions for video, audio and IP data networks, primarily via
        satellite delivery. Applications include broadcast and cable television,
        business television, IP data delivery, digital signage, distance education,
        business music and radio networks. COMPEL ® ,
        our
        patented network control system, provides network flexibility to regionalize
        programming, commercials and file transfers.
  We
        are
        continuing to invest in new technologies utilizing MPEG-4/H.264 video
        compression and DVB-S2 satellite modulation combined. MPEG-4/H.264 compression
        and DVB-S2 modulation reduce bandwidth utilization by about half, which allows
        present networks to cut recurring costs by up to 50% and allows the creation
        of
        new networks that were not possible with previous technologies. Alternately,
        our
        customers will be able to upgrade their video to high definition and increase
        its quality significantly while maintaining similar bandwidth utilization
        to
        their current MPEG-2 standard definition offering. The SMD515 IPTV settop
        and
        the Unity ® 550-2
        Enterprise Media Receiver are our first products with MPEG-4/H.264 technology,
        and we continue to explore other potential applications for the technology.
        The
        Unity ® 550-2
        Enterprise Media Receiver was exhibited in June at the 2008 Cable Tec Expo
        and
        is currently scheduled for deliveries in the first quarter of fiscal 2008.
        We
        expect the development of products utilizing MPEG-4/H.264 technology to continue
        throughout the remainder of fiscal year 2007 and into fiscal 2008. We believe
        that market demand for MPEG-4 technology is very strong. However, the conversion
        of new business opportunities into firm orders depends on the availability
        of
        next generation products with MPEG-4 and DVB-S2 technologies. We are extremely
        focused on completion of these products.
  With
        our
        technology leadership in MPEG-4 IPTV Set Top Boxes, DVB-S2 satellite networks
        and digital media distribution, we believe we are well positioned to capitalize
        on future industry trends. As we work to realize this potential, our Board
        of
        Directors has determined that we should examine potential means for further
        strengthening our strategic position and maximizing value for our shareholders.
        During the second quarter of fiscal 2007, the Board of Directors formed a
        committee of independent directors to explore strategic and financial
        alternatives to enhance shareholder value. We retained Near Earth LLC as
        our
        exclusive financial advisor in this evaluation process. These strategic
        alternatives may include: (i) technology licensing agreements, (ii) product
        development and marketing arrangements, joint ventures or strategic
        partnerships, (iii) strategic acquisitions, mergers or other business
        combinations, or (iv) the merger or sale of all or part of the Company. We
        are
        also evaluating various financing alternatives to unlock the market value
        of our
        headquarters and associated real estate to support our capital needs. There
        can
        be no assurance that the exploration of strategic alternatives will result
        in
        any specific transaction. We do not expect to disclose further developments
        regarding the process until the completion of the strategic alternatives
        review
        and a decision by the Board of Directors regarding a transaction or course
        of
        action.
  16
  During
        the third quarter of fiscal 2007, we booked approximately $4.6 million in
        new
        orders, including a $3.2 million contract from SSL
        (Satellite Store Link), to
        launch a digital signage network in Mexico. The contract includes
        iPump ® Media
        Servers, IP-based peripheral decoders and COMPEL ® network
        control system to distribute and display information and advertisements
        dynamically to bank customers and employees in an initial application of
        1,200
        locations throughout Mexico. The system allows SSL to provide cost effective
        national coverage while offering many opportunities to regionalize video,
        data
        and audio services. Approximately $1.6 million of the SSL order was included
        in
        third quarter fiscal 2007 revenues and approximately $1.6 million is expected
        to
        be included in fourth quarter fiscal 2007 revenues.
 
 Subsequent
        to June 1, 2007, we received an order for Unity® 4600 satellite receivers for
        use by the Big
        Ten
        Network (BTN) in
        a new
        cable network being distributed by Fox Cable Networks. BTN,
        a
        national cable and satellite programming service
        dedicated to covering both the athletic and academic content of the Big Ten
        Conference, is
        scheduled to begin programming in August 2007, with most programs being offered
        in HDTV
        (high-definition television) .
  **Financial
        Position and Liquidity**
 
 At
        June
        1, 2007, we had line of credit borrowings outstanding of $2,042,000. 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. Subsequent to June 1, 2007, WCI’s bank loan facility was renewed
        effective July 1, 2007. The renewed loan facility matures on September 30,
        2008,
        or upon demand. At June 1, 2007, **** approximately
        $1,408,000, net of outstanding letters of credit in the amount of $659,000,
        remained available to borrow under the advance formulas.
 
 During
        the first nine months of fiscal 2007, our cash balances decreased by $940,000
        and line of credit net borrowings increased to the outstanding balance of
        $2,042,000. These funds were used to fund  operating
        activities  of
        $1,559,000 and investing activities consisting of capitalized software additions
        of $1,158,000, equipment additions of $169,000 and $153,000 for license
        agreements and legal fees related to the filing of applications for various
        patents and trademarks.
 
 (See
        the
        Liquidity and Capital Resources section for further discussion.)
  17
  **RESULTS
        OF OPERATIONS**
 **THREE
        AND NINE MONTHS ENDED JUNE 1, 2007 COMPARED TO THREE AND NINE MONTHS ENDED
        JUNE
        2, 2006**
 
 The
        following table sets forth, for the periods indicated, the components of
        the
        results of operations as a percentage of sales:
 
 Three
                  months ended
              
              Nine
                  months ended**June
                  1,**
                **2007**
              
              June
                  2,
                2006
              
              **June
                  1,**
                **2007**
              
              June
                  2,
                2006Revenues
              
              
              **100.0**
              **%**
              
              100.0
              %
              
              **100.0**
              **%**
              
              100.0
              %Cost
                  of products sold
              
              
              **63.6**
              
              
              63.5
              
              
              **65.8**
              
              
              65.6Gross
                  margin
              
              
              **36.4**
              
              
              36.5
              
              
              **34.2**
              
              
              34.4Selling,
                  general, and administrative
              
              
              **20.4**
              
              
              22.6
              
              
              **24.8**
              
              
              30.2Research
                  & development
              
              
              **11.3**
              
              
              11.1
              
              
              **14.6**
              
              
              13.7Operating
                  income (loss)
              
              
              **4.6**
              
              
              2.7
              
              
              **(5.1**
              **)**
              
              (9.6
              )Interest
                  expense
              
              
              **(0.6**
              **)**
              
              (0.6
              )
              
              **(0.5**
              **)**
              
              (0.4
              )Interest
                  income
              
              
              **-**
              
              
              -
              
              
              **-**
              
              
              0.4Earnings
                  (loss) before income taxes
              
              
              **4.0**
              
              
              2.1
              
              
              **(5.7**
              **)**
              
              (9.9
              )Income
                  tax benefit
              
              
              **-**
              
              
              -
              
              
              **-**
              
              
              -Net
                  earnings (loss)
              
              
              **4.0**
              **%**
              
              2.1
              %
              
              **(5.7**
              **)%**
              
              (9.9
              )%
  The
        operating results for the three and nine month periods ended June 1, 2007,
        were net
        earnings of $251,000 or $.02 per share and a net loss of $(895,000) or $(.07)
        per share ,
        respectively, compared to net earnings of $138,000 or $.01 per share and
        a net
        loss of $(1,606,000) or $(.13) per share for the same periods ended June
        2,
        2006.
 
 **Revenues** -
        Revenues for the three months ended June 1, 2007 decreased $361,000 or 5.5%
        to
        $6,247,000 from $6,608,000 for the three months ended June 2, 2006. Revenues
        for
        the nine months ended June 1, 2007 decreased $371,000 or 2.3% to $15,801,000
        from $16,172,000 for the nine months ended June 2, 2006.
  Direct
        Broadcast Satellite (DBS) revenues (including service revenues) decreased
        $349,000 or 5.3% in the third quarter of fiscal 2007 to $6,184,000 from
        $6,533,000 in the same period of fiscal 2006. For the nine months ended June
        1,
        2007, DBS revenues decreased $375,000 or 2.3% to $15,675,000 from $16,050,000
        for the nine months ended June 2, 2006. Fiscal 2007 three and nine
        month  revenues
        included approximately $1,649,000 from the third quarter booking of the new
        SSL
        order. The decrease in fiscal 2007 three and nine month revenues compared
        to the
        same periods in fiscal 2006 reflects the timing of shippable bookings and
        resulting revenues from significant customer orders which may fluctuate from
        quarter to quarter.
 
 For
        the
        three months ended June 1, 2007, two customers accounted for 21.3% and 26.4%
        of
        revenues, respectively. For the nine months ended June 1, 2007, these same
        customers accounted for 19.4% and 10.4% of revenues, respectively. For the
        three
        months ended June 2, 2006, two other customers accounted for 26.3% and 24.3%
        of
        revenues, respectively, and for the nine months ended June 2, 2006, they
        accounted for 22.4% and 10.3% 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 2007 and
        beyond.
 
 Our
        backlog is comprised of undelivered, firm customer orders, which are scheduled
        to ship within 18 months. WCI’s backlog was approximately $7.7 million at June
        1, 2007, compared to $10.7 million at September 1, 2006, and $12.1 million
        at
        June 2, 2006. Three customers accounted for 38.4%, 19.9% and 12.3%,
        respectively, of the backlog at June 1, 2007. The total multi-year backlog
        at
        June 1, 2007, was approximately $15.3 million compared to $19.4 million at
        September 1, 2006 and $21.3 million at June 2, 2006.
 
 **Gross
        Profit Margins** - The
        Company's gross profit margin percentages were 36.4% and 34.2% for the three
        and
        nine months ended June 1, 2007, compared to 36.5% and 34.4% for the same
        periods
        ended June 2, 2006. Gross profit margin dollars decreased $138,000 or 5.7%
        and
        $165,000 or 3.0% for the three and nine month periods ended June 1, 2007,
        from
        the same periods ended June 2, 2006. The decreases in margin dollars were
        due to
        the lower revenues for the periods. Profit margins in the three and nine
        month
        periods of fiscal 2007 included capitalized software amortization expenses
        of
        $373,000 and $1,144,000, respectively, compared to $551,000 and $1,449,000
        for
        the same periods of fiscal 2006. In addition, profit margins in the three
        and
        nine month periods of fiscal 2007 included inventory reserve charges of $175,000
        and $250,000 compared to $75,000 and $175,000 for the same periods of fiscal
        2006. Warranty provisions were $50,000 and $150,000 in the three and nine
        month
        periods of fiscal 2007 compared to $50,000 and $110,000, respectively, for
        the
        same periods of fiscal 2006.
  18
  **Selling,
        General and Administrative** -
        Selling, general and administrative (SG&A) expenses decreased $223,000 or
        14.8% to $1,274,000 for the three months ended June 1, 2007, from $1,497,000
        for
        the same period of fiscal 2006. For the nine months ended June 1, 2007, SG&A
        expenses decreased $979,000 or 20.0% to $3,911,000 from $4,890,000 for the
        same
        period of fiscal 2006. Corporate SG&A expenses decreased $62,000, or 19.2%,
        and $439,000, or 34.6%, in the third quarter and first nine months of fiscal
        2007, respectively, compared to the same periods in fiscal 2006, mainly due
        to  a
        reduction in professional fees. WCI’s
        SG&A expenses decreased $160,000, or 13.7%, and $540,000, or 14.9%, for the
        three and nine months ended June 1, 2007, compared to the same periods in
        fiscal
        2006. The decrease in WCI’s SG&A expenses for the three months ended June 1,
        2007 was mainly due to decreases in salaries and related payroll costs of
        $102,000, due to lower headcount, and marketing expenses of $38,000. The
        decrease in WCI’s SG&A expenses for the nine months ended June 1, 2007
        included decreases in professional fees of $102,000, salaries and related
        payroll costs of $163,000, due to lower headcount, and marketing expenses
        of
        $170,000. SG&A expenses included $0 and $17,700 of noncash share-based
        compensation expense in the three and nine months ended June 1, 2007 compared
        to
        $3,000 and $30,000 in the same periods of fiscal 2006. As a percentage of
        revenues, SG&A expenses were 20.4% and 24.8% for the three and nine month
        periods ended June 1, 2007, respectively, compared to 22.6% and 30.2% for
        the
        same periods of fiscal 2006.
 
 **Research
        and Development** -
        Research and development (R&D) expenditures, including capitalized software
        development costs, were $1,090,000 or 17.4% of revenues, and $3,459,000 or
        21.9%
        of revenues, for the three and nine month periods ended June 1, 2007, compared
        to $1,066,000 or 16.1% of revenues, and $3,318,000 or 20.5% of revenues,
        for the
        same periods of fiscal 2006. The increases in expenditures in the three and
        nine
        months ended June 1, 2007,  were
        mainly due to increased salaries related to increases in compensation and
        headcount and increased recruiting costs related to new hires, which were
        offset
        by reductions in consulting and prototype parts costs. Capitalized software
        development costs amounted to $383,000 and $1,158,000 for the third quarter
        and
        first nine months of fiscal 2007 compared to $332,000 and $1,099,000 for
        the
        same periods of fiscal 2006. The increases in capitalized software costs
        in the
        three and  nine
        months of fiscal 2007 were due to increased expenditures related to MPEG-4/H.264
        products. Research and development expenses, excluding capitalized software
        expenditures, were $707,000 or 11.3% of revenues, and $2,302,000 or 14.6%
        of
        revenues, for the three and nine months ended June 1, 2007, respectively,
        compared to $734,000 or 11.1% of revenues, and $2,219,000 or 13.7% of revenues,
        for the same periods of fiscal 2006. The decrease in R&D expenses for the
        three months ended June 1, 2007, was mainly due to the increase in capitalized
        software costs for the period. The increase in R&D expenses for the nine
        months ended June 1, 2007, was mainly due to the increases in expenditures
        discussed above.
 
 **Interest
        Expense** -
        Interest expense decreased $3,000 to $40,000 for the three months ended June
        1,
        2007, from $43,000 for the three months ended June 2, 2006. For the nine
        months
        ended June 1, 2007, interest expense increased $22,000 to $90,000 from $68,000
        for the same period in fiscal 2006. The increase for the nine months in fiscal
        2007 was primarily due to an increase in average line-of-credit
        borrowings.
 
 **Interest
        Income** **-** Interest
        income was $500 and $9,000 for the three and nine month periods ended June
        1,
        2007, compared to $1,000 and $7,000 for the same periods ended June 2, 2006.
        The
        decreases for the three and nine months ended June 1, 2007 were mainly due
        to
        lower average  balances
        of cash and cash equivalents.
 
 **Income
        Tax Expenses** **-** For the
        nine months ended June 1, 2007, no income tax benefit was recorded due to
        an
        increase in the deferred tax asset valuation allowance. The valuation allowance
        increased $322,000 in the first nine months of fiscal 2007. At June 1, 2007,
        net
        deferred tax assets of $6,070,000 were fully reserved by a valuation allowance.
        At June 1, 2007, we had a federal net operating loss carryforward of
        approximately $10,063,000, which expires beginning fiscal 2020 through fiscal
        2027. Additionally, we had an alternative minimum tax credit of $138,000
        and
        state income tax credits of $199,000 expiring in fiscal 2009, both of which
        were
        fully offset by the valuation allowance.
 
 **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 judgements. These policies are as follows:
  19
 
 **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” and EITF Issue No. 00-21, "Revenue Arrangements with
        Multiple Deliverables." 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
        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 June 1, 2007, deferred extended
        service maintenance revenues were $416,000 and deferred revenues related
        to
        future performance obligations were $408,000 and are expected to be recognized
        as revenue in varying amounts throughout fiscal 2007 and into fiscal 2008.
        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 be held for future delivery as scheduled and
        designated by them, and no additional performance obligations exist by the
        Company. For these transactions, the finished goods are segregated from
        inventory and normal billing and credit terms are granted. For the three
        and
        nine months ended June 1, 2007, revenues in the amount of $2,967,000 and
        $3,006,000, respectively, were appropriately recorded prior to delivery as
        bill
        and hold transactions in accordance with the provisions of SAB 104. At June
        1,
        2007, accounts receivable for these revenues amounted to $2,029,000
 
 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 **.** 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.
 
 **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.
        At
        June 1, 2007, inventories, net of reserve provisions, amounted to $4,198,000.
 
 **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. At June 1,
        2007,
        capitalized software costs, net of accumulated amortization, amounted to
        $1,243,000.
 
 **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 **** June
        1,
        2007, deferred tax assets in the amount of $6,070,000 were fully reserved
        by a
        valuation allowance. For the nine months ended June 1, 2007, the valuation
        allowance was increased by $322,000.
  **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 June
        1, 2007, accounts receivable, net of allowances for doubtful accounts, amounted
        to $4,293,000.
  20
  **LIQUIDITY
        AND CAPITAL RESOURCES**
 **NINE
        MONTHS ENDED JUNE 1, 2007**
  At
        June
        1, 2007, 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.
        At June
        1, 2007, we had line of credit borrowings outstanding of $2,042,000. At June
        1,
        2007, **** approximately
        $1,408,000, net of outstanding letters of credit in the amount of $659,000,
        was
        available to borrow under the advance formulas. Cash and cash equivalents
        decreased $940,000 during the first nine months of fiscal 2007.
 
 During
        the first nine months of fiscal 2007, operating activities used $1,559,000
        of
        cash. Net losses adjusted for noncash expenses provided $1,245,000 of cash,
        while changes in accounts receivable and customer deposit balances used
        $2,677,000 of cash. Changes in inventories, accounts payable and accrued
        expenses, and other assets used $127,000 of cash. Cash used by investing
        activities was $169,000 for property and equipment expenditures, $1,158,000
        for
        capitalized software additions and $153,000 for legal fees related to the
        filing
        of applications for various patents and trademarks. Financing activities
        provided $2,042,000 of cash from the net line-of-credit borrowings and $57,000
        of cash from exercised stock options.
 
 Subsequent
        to June 1, 2007, WCI’s bank loan facility was renewed effective July 1, 2007.
        The renewed facility provides a maximum available credit limit of $5,000,000
        with sublimits as defined. The loan facility matures on September 30, 2008,
        or
        upon demand and requires an annual facility fee of 2.00% (previously .75%)
        of
        the maximum credit limit. 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 (8.25% at June 1, 2007). The bank retained the
        right to adjust the interest rate, subject to the financial performance of
        the
        Company.
 
 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; and 40% to 50% of eligible finished goods
        inventories and 50% of import letter of credit commitment balances. In
        addition, the renewed 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 June 1, 2007,
        balances outstanding on the revolving line of credit amounted to $2,042,000.
        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, which at June 1, 2007, amounted to
        $659,000.
 
 At
        June
        1, 2007, **** approximately
        $1,408,000, net of outstanding letters of credit, was available to borrow
        under
        the advance formulas. During third quarter of fiscal 2007, the average daily
        balance outstanding was $949,000 and the highest outstanding balance was
        $2,476,000. We expect average outstanding borrowings to increase in the fourth
        quarter of fiscal 2007. We believe the loan facility will be sufficient to
        support operations over the next 12 months.
 
 At
        June
        1, 2007, 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. While no assurances may be given, we believe these assets could
        be
        used to support additional overall borrowing capacities either with our existing
        bank or from other sources. During the third quarter of fiscal 2007, the
        Company
        authorized and approved listing for sale the 4.4 acres of undeveloped land
        located adjacent to its headquarters facility in Duluth (Johns Creek), Georgia
        (see note 5 to the consolidated financial statements). Proceeds from the
        sale of
        the land would be used to pay any balances outstanding on the revolving line
        of
        credit.
 
 Under
        the
        loan facility, we are required at the end of the first three quarters in
        fiscal
        2007 and fiscal 2008, to maintain either a minimum tangible net worth or
        a
        minimum borrowing availability. At each fiscal year end, commencing with
        fiscal
        year 2007, we are required to maintain a minimum tangible net worth with
        increased amounts at subsequent fiscal year ends. In addition, we are to
        retain
        certain key employees, maintain certain financial ratios, and are precluded
        from
        paying dividends. At June 1, 2007, we were in compliance with the
        covenants.
  21
 
 We
        have
        two manufacturing and purchasing agreements for certain finished goods
        inventories. At June 1, 2007, outstanding purchase commitments under these
        agreements amounted to $3,354,000. Pursuant to the above agreements, at June
        1,
        2007, we had outstanding letters of credit in the amount of
        $659,000.
 
 The
        Company has never paid cash dividends on its common stock and does not intend
        to
        pay cash dividends in the foreseeable future.
  A
        summary
        of our long-term contractual obligations as of June 1, 2007 consisted
        of:
  Payments
                  Due by PeriodContractual
                  Obligations
              
              Total
              
              Fiscal
                2007
              
              Fiscal
                2008-2009
              
              Fiscal
                2010-2011Operating
                  leases
              
              $
              152,000
              
              $
              46,000
              
              $
              102,000
              
              $
              4,000Purchase
                  commitments
              
              
              3,354,000
              
              
              1,364,000
              
              
              1,990,000
              
              
              -Total
              
              $
              3,506,000
              
              $
              1,410,000
              
              $
              2,092,000
              
              $
              4,000
 
 **ITEM
        3.**  **QUANTITATIVE
        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
  Our
        exposure to market rate risk for changes in interest rates relates primarily
        to
        our 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. At June 1, 2007, line of credit outstanding borrowings
        amounted to  $2,042,000.
 
 We
        do not
        enter into derivative financial instruments. All sales and purchases are
        denominated in U.S. dollars.
  **ITEM
        4.**  **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 (June 1, 2007). 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 the most recent
        fiscal quarter that has materially affected, or is reasonably likely to
        materially affect, the Company’s internal control over financial
        reporting.
  **ITEM
        4T. CONTROLS AND PROCEDURES**
  Not
        applicable
  22
  **PART
        II. OTHER INFORMATION**
  **ITEM
        1. LEGAL PROCEEDINGS**
 
 On
        June 1, 2006, a complaint was filed by Rembrandt Technologies, LP
        (Rembrandt) against Charter Communications, Inc. (Charter), Cox Communications
        Inc. (Cox), CSC Holdings, Inc. (CSC) and Cablevisions Systems Corp.
        (Cablevision) in the United States District Court for the Eastern District
        of
        Texas alleging patent infringement. The complaint alleges that products and
        services sold by Charter infringe certain Rembrandt patents related to cable
        modem, voice-over internet, and video technology and applications. The case
        may
        be expensive to defend and there may be substantial monetary exposure if
        Rembrandt is successful in its claim against Charter and then elects to pursue
        other cable operators that use the allegedly infringing products. Wegener
        has
        not been named a party in the suit. However, during the second quarter of
        fiscal
        2007, Charter requested us to defend and indemnify Charter to the extent
        that
        the Rembrandt allegations are premised upon Charter’s use of products that we
        have sold to Charter. To date, we have not agreed to Charter’s request. Trial
        date of this matter is not known at this time. At this point, the outcome
        is
        uncertain and we are presently unable to assess the impact, if any, of this
        litigation on Wegener.
 
 On
        June 1, 2006, a complaint substantially similar to the above described suit
        was filed by Rembrandt against Time
        Warner Cable (TWC) in the
        United States District Court for the Eastern District of Texas. Wegener
        has not been named a party in the suit, but TWC has requested us (as well
        as
        other equipment vendors) to contribute 2% of the defense costs related to
        this
        matter as a result of the products that we and others have sold to TWC. To
        date,
        we have not agreed to contribute to the payment of legal costs related to
        this
        case. Trial date of this matter is not known at this time. At this point,
        the
        outcome is uncertain and we are presently unable to assess the impact, if
        any,
        of this litigation on Wegener.
 
 On
        September 16, 2005, a complaint substantially similar to the foregoing was
        filed by Rembrandt against Comcast Corporation (Comcast) in the United States
        District Court for the Eastern District of Texas. Wegener has not been named
        a
        party in the suit, but we received a subpoena for documents and a deposition
        related to the products we sold to Comcast. We are complying with the subpoena.
  23
 
 **I** **TEM** **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 Exhibit**3.1
              *
              
              
              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)3.2.1
              *
              
              
              Amendments
                  to Article III, Section 3.2 and Article XII of the By-laws of the
                  Company,
                  effective as of September 29, 2006. (4)4.1
              
              
              
              Loan
                  and Security Agreement - Ninth Amendment dated June 28, 2007, by
                  and
                  between Wegener Communications, Inc. and LaSalle National Bank
                  respecting
                  $5,000,000 combined revolving credit note and term
                  note.31.1
              
              
              
              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.+(4)
              
              Incorporated
                  by reference to the Company's Current Report on Form 8-K, dated
                  September
                  29, 2006, as filed with the Commission on October 3, 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:
                July 16,
                2007
              By:
              /s/
                  Robert A. PlacekRobert
                  A. Placek
                Chairman
                  of the Board, President and
                Chief
                  Executive Officer
                (Principal
                  Executive Officer)
 Date:
                July 16,
                2007
              By:
              /s/  C.
                  Troy Woodbury, Jr.C.
                  Troy Woodbury, Jr.
                Treasurer
                  and ChiefFinancial
                  Officer
                (Principal
                  Financial and Accounting Officer)
  25