##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-31635
      Endwave Corporation
 (Exact name of registrant as
    specified in its charter)
      Delaware(State of
    incorporation)

95-4333817(I.R.S. Employer
    Identification No.)130 Baytech Drive
    San Jose, CA(Address of principal
    executive offices)

95134(Zip
    code)   (408) 522-3100
  (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value per share

The NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company þ(Do not check if a smaller reporting company)   Rule 12b-2 o þ




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##### 





ENDWAVE
    CORPORATION
  FORM 10-K
  Year
    Ended December 31, 2010
  TABLE OF
    CONTENTS
   
 Page No.PART IItem 1.

Business


4Item 1A.

Risk Factors


13Item 1B.

Unresolved Staff Comments


25Item 2.

Properties


25Item 3.

Legal Proceedings


25PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


26Item 6.

Selected Consolidated Financial Data


28Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


44Item 8.

Financial Statements and Supplementary Data


45Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


76Item 9A.

Controls and Procedures


76Item 9B.

Other Information


76PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


77Item 11.

Executive Compensation


81Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


92Item 13.

Certain Relationships and Related Transactions
    and Director Independence


94Item 14.

Principal Accounting Fees and Services


95PART IVItem 15.

Exhibits and Financial Statement Schedules


95SIGNATURES


100EX-23.1EX-31.1EX-31.2EX-32.1   2




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FORWARD-LOOKING
    INFORMATION
   3




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##### Table of Contents



PART I  Item 1.
    Business  Introduction
    
    Our semiconductor product line consists of a wide variety of
    monolithic microwave integrated circuits, or MMICs, including
    amplifiers, voltage controlled oscillators, up and down
    converters, variable gain amplifiers, voltage variable
    attenuators, fixed attenuators and filters. These types of
    devices are widely used in telecommunications, satellite,
    defense, security, instrumentation, scientific and consumer
    systems. While we have developed, produced and sold such devices
    for several years as components of our module products, we first
    offered them for sale as stand-alone products in the latter part
    of 2009 and they have not yet become a significant source of
    revenue for us.
    Our integrated transceiver modules combine several electronic
    functions into a single RF
    sub-system.
    Historically, our main customers for these products have been
    telecommunication network original equipment manufacturers, or
    OEMs, and system integrators that utilize them in digital
    microwave radios. More recently we have identified and pursued
    uses for these products in additional product areas; however
    these alternate applications have not yet become a significant
    source of revenue for us.  sub-system
  (ii) in-the-money
   4




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##### Table of Contents



Industry
    Background and Markets
  High-Frequency
    RF Technology
  Microwave
    technology millimeter wave technology microwave
    Telecommunication
    Networks
    Cellular Telephone Backhaul. cellular backhaul
  Carrier Class Trunking.
  Private Voice and Data Networks.
 5




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Fixed Wireless Access Network
    Backhaul.
    Defense
    Systems
    Radar Systems.
  Signal Intelligence Systems.
  High Capacity Communications.
  Security
    Systems
    Long Distance Personnel
    Detection.
  Security Portals.
  Security Cameras.
 6




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Other
    Applications
  Scientific Sensors.
  Through-wall Imagers.
  Automotive Radar.
    Our
    Business Approach
    Technical Depth.
  Innovative Technology.
  Semiconductor Devices. sub-systems,
  Low Cost. sub-contractors.
  Flexible Supply Chain Capabilities. and/or
   7




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##### Table of Contents



component-to-system
  Extensive Technical Expertise.
  A Commitment to Develop Next-Generation
    Technology.
  Comprehensive Approach to Cost-Effective
    Manufacturing.
  
    We design our products to be readily manufacturable and able to
    tolerate a wide range of material and manufacturing process
    variations. This speeds the flow of work, reduces the required
    level of touch labor and minimizes rework.
    Semiconductors are both a critical technical element and a major
    cost component of our products. Our ability to custom design
    these devices allows us to optimize them for cost and
    performance and to achieve significant cost savings by having
    them fabricated in low cost, third-party foundries.
    For many of our products, we have implemented automated assembly
    techniques that reduce labor content and enhance both product
    uniformity and quality.
    Testing is a large part of the manufacturing process and we have
    developed extensive automated testing capabilities that speed
    this process and differentiate us from the labor-intensive
    methods often used in our industry. We use state of the art
    information technology systems to store, analyze and transmit
    test data.
    Because our products are highly manufacturable, we have been
    able to contract with third-party, primarily offshore,
    manufacturers for even greater cost savings. We began the
    transition to outsourced manufacturing in 2002, most notably to
    HANA Microelectronics Co., Ltd., or HANA, a Thailand-based
    contract manufacturer, and today almost all of our manufacturing
    operations utilize an outsourced approach. This transition has
    significantly improved our product margins and enables us to
    adjust rapidly, efficiently and flexibly to our customers
    varying quantity and product mix requirements, which are often
    created by unexpected needs and variations in demand.
    The cost of raw materials and components employed in high
    frequency devices and products are a major part of the overall
    manufacturing cost. We have reduced the cost of these items by
    re-designing them, leveraging our purchasing power and selecting
    more cost-effective suppliers. As an outgrowth of our
    operational presence in Asia, we continue to identify low-cost,
    high-quality Asian-based suppliers for several of the raw
    materials and components used in our products. 8




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Products
    and Technology
  Integrated
    Transceiver
    Sub-system
    Modules
  sub-system sub-system.
    
    MMIC (Monolithic Microwave Integrated
    Circuit).  In this RF semiconductor technology,
    individual devices, components and interconnects are patterned
    onto a semiconductor substrate (typically gallium arsenide, or
    GaAs) in a manner similar to industry standard integrated
    circuit fabrication techniques. We have developed a large
    repertoire of custom designed MMICs that have been optimized for
    cost, performance and manufacturability.
    MLMStm

    (Multi-Lithic Micro System).  This is a
    proprietary RF semiconductor circuit technology that we have
    developed to overcome the shortcomings of conventional circuit
    technologies. This technology consists of a small multi-layer RF
    substrate onto which individual devices (transistors and diodes)
    are attached and electrically connected without the use of bond
    wires. The features of this technology include reduced design
    difficulty, elimination of individual tuning, low cost substrate
    materials, automated manufacture, use of multiple semiconductor
    technologies in the same circuit (i.e. multi-lithic), integrated
    passive circuit elements and the ability to provide a complete
    system on a chip functionality.  tm
  Semiconductor
    Devices
  sub-system
  Sales and
    Marketing
   9




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Customers
    Competition
          
    Product pricing and the ability to offer low-cost solutions;
    Technical leadership and product performance;
    Strong customer relationships;
    Product breadth;
    Time-to-market
    in the design and manufacturing of products; and
    Logistical flexibility, manufacturing capability and scalable
    capacity.  Research
    and Development
      Semiconductor Design Capabilities. off-the-shelf
  Breadth of Expertise.
 10




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Computer Modeling Capabilities.
  Extensive Library of Designs. sub-system time-to-market
  Automated Testing Processes.
    Patents
    and Intellectual Property Rights
    patent-by-patent
    Operations
   11




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9001-2000,
  work-in-process
  Backlog
      Governmental
    Regulation
   12




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Seasonality
    Employees
    Available
    Information
  (408) 522-3100. www.endwave.com Form 10-K, Form 10-Q, Form 8-K
  1-800-SEC-0330. http://www.sec.gov
  Item 1A.
    Risk
    Factors  You should consider carefully the following risk factors as
    well as other information in this report before investing in any
    of our securities. If any of the following risks actually occur,
    our business, operating results and financial condition could be
    adversely affected. This could cause the market price of our
    common stock to decline, and you may lose all or part of your
    investment.
  Risks
    Relating to the Proposed Merger with GigOptix
  Because
    the conversion ratio is not adjustable based on the market price
    of either GigOptix or Endwave common stock, you cannot be sure
    of the value of the merger consideration that you will
    receive.
   13




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##### Table of Contents



GigOptix
    may fail to realize the anticipated benefits of the
    merger.
      Endwave
    will be subject to business uncertainties and contractual
    restrictions while the merger is pending that could adversely
    affect its business.
    Failure
    to complete the merger could negatively affect GigOptix and
    Endwave.
    
    the companies will not realize the benefits expected from
    becoming part of a combined company, including a potentially
    enhanced competitive and financial position;
    the trading price of each companys common stock may
    decline to the extent that the current market price of the
    common stock reflects a market assumption that the merger will
    be completed; and
    some costs related to the merger, such as legal, accounting and
    some financial advisory fees, must be paid even if the merger is
    not completed.  Endwaves
    ability to pursue alternatives to the merger is
    restricted.
   14




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Endwave
    stockholders will have reduced ownership and voting interests in
    GigOptix and will be able to exercise less influence over
    management following the merger.
    There
    may be a limited public market for shares of GigOptix common
    stock, and the ability of its stockholders to dispose of their
    common shares may be limited.
    Substantial
    future sales of GigOptix common stock in the public market
    could cause GigOptix stock price to fall.
  Form S-1
  The
    exercise of options and warrants and other issuances of shares
    of common stock or securities convertible into common stock will
    dilute the interest of GigOptix stockholders.
   15




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Risks
    Relating to Our Business
  We
    have had a history of losses and may not be profitable in the
    future.
    We
    depend on a small number of key customers in the mobile
    communication industry for a significant portion of our
    revenues. If we lose any of our major customers or there is any
    material reduction in orders for our products from any of these
    customers, our business, financial condition and results of
    operations would be adversely affected. In addition,
    consolidation in this industry could result in delays or
    cancellations of orders for our products, adversely impacting
    our results of operations.
      Our
    semiconductor product line will require us to incur significant
    expenses and may not be successful.
   16




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Because
    of the shortages of some components and our dependence on single
    source suppliers and custom components, we may be unable to
    obtain an adequate supply of components of sufficient quality in
    a timely fashion, or we may be required to pay higher prices or
    to purchase components of lesser quality.
      
    semiconductor devices;
    application-specific monolithic microwave integrated circuits;
    voltage regulators;
    passive components;
    unusual or low usage components;
    surface mount components compliant with the EUs
    Restriction of Hazardous Substances, or RoHS, Directive;
    custom metal parts;
    high-frequency circuit boards; and
    custom connectors.    Competitive
    conditions often require us to reduce prices and, as a result,
    requires us to reduce our costs in order to be
    profitable.
  per-unit
  Our
    operating results may be adversely affected by substantial
    quarterly and annual fluctuations and market
    downturns.
   17




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We
    rely on the semiconductor foundry operations of third-party
    semiconductor foundries to manufacture the integrated circuits
    sold directly to our customers and contained in our products.
    The loss of our relationship with any of these foundries without
    adequate notice would adversely impact our ability to fill
    customer orders and could damage our customer
    relationships.
      We
    rely heavily on a Thailand facility of HANA, a contract
    manufacturer, to produce our RF modules and to package our
    microwave and millimeter wave integrated circuits. If HANA is
    unable to produce or package these modules and circuits in
    sufficient quantities or with adequate quality, or it chooses to
    terminate our manufacturing arrangement, we will be forced to
    find an alternative manufacturer and may not be able to fulfill
    our production commitments to our customers, which could cause
    sales to be delayed or lost and could harm our
    reputation.
    Potential
    misclassification of certain products under the Export
    Administration Regulations may result in liability for Endwave
    and affect ongoing operations.
   18




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Our
    products may contain component, manufacturing or design defects
    or may not meet our customers performance criteria, which
    could cause us to incur significant repair expenses, harm our
    customer relationships and industry reputation, and reduce our
    revenues and profitability.
    We may
    not be able to design our products as quickly as our customers
    require, which could cause us to lose sales and may harm our
    reputation.
       19




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We
    depend on our key personnel. Skilled personnel in our industry
    can be in short supply. If we are unable to retain our current
    personnel or hire additional qualified personnel, our ability to
    develop and successfully market our products would be
    harmed.
      The
    length of our sales cycle requires us to invest substantial
    financial and technical resources in a potential sale before we
    know whether the sale will occur. There is no guarantee that the
    sale will ever occur and if we are unsuccessful in designing
    integrated circuits and module products for a particular
    generation of a customers products, we may need to wait
    until the next generation of that product to sell our products
    to that particular customer.
    We may
    not be able to manufacture and deliver our products as quickly
    as our customers require, which could cause us to lose sales and
    would harm our reputation.
    
    the failure of a supplier to deliver needed components on a
    timely basis or with acceptable quality;
    lack of sufficient capacity;
    poor manufacturing yields;
    equipment failures;
    manufacturing personnel shortages;
    transportation disruptions;
    changes in import/export regulations;
    infrastructure failures at the facilities of our offshore
    contract manufacturer; 20




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
    natural disasters;
    acts of terrorism; and
    political instability.    Although
    we do have long-term commitments from many of our customers,
    they are not for fixed quantities of product. As a result, we
    must estimate customer demand, and errors in our estimates could
    have negative effects on our cash, inventory levels, revenues
    and results of operations.
      Any
    failure to protect our intellectual property appropriately could
    reduce or eliminate any competitive advantage we
    have.
     21




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We are
    exposed to fluctuations in the market values of our investment
    portfolio.
  sub-prime
  Risks
    Relating to Our Industry
  Our
    failure to compete effectively could reduce our revenues and
    margins.
   22




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Our
    failure to comply with any applicable environmental regulations
    could result in a range of consequences, including fines,
    suspension of production, excess inventory, sales limitations
    and criminal and civil liabilities.
    Government
    regulation of the communications industry could limit the growth
    of the markets that we serve or could require costly alterations
    of our current or future products.
    Our
    failure to continue to develop new or improved semiconductor
    process technologies could impair our competitive
    position.
    The
    segment of the semiconductor industry in which we participate is
    intensely competitive, and our inability to compete effectively
    would harm our business.
      Risks
    Relating to Ownership of Our Stock
  The
    market price of our common stock has fluctuated historically and
    is likely to fluctuate in the future.
   23




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##### Table of Contents




    our financial performance or the performance of our competitors;
    the purchase or sale of common stock, short-selling or
    transactions by large stockholders;
    technological innovations or other significant trends or changes
    in the markets we serve;
    successes or failures at significant product evaluations or site
    demonstrations;
    the introduction of new products by us or our competitors;
    acquisitions, strategic alliances or joint ventures involving us
    or our competitors;
    decisions by major customers not to purchase products from us or
    to pursue alternative technologies;
    decisions by investors to de-emphasize investment categories,
    groups or strategies that include our company or industry;
    market conditions in the industry, the financial markets and the
    economy as a whole; and
    the low trading volume of our common stock.    We
    have a few stockholders that each own a large percentage of our
    outstanding capital stock and, as a result of their significant
    ownership, are able to significantly affect the outcome of
    matters requiring stockholder approval.
    Our
    certificate of incorporation, bylaws and arrangements with
    executive officers could delay or prevent a change in
    control.
  2 3
 24




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    
    Our principal executive offices located in San Jose,
    California, where we lease approximately 33,000 square
    feet, which encompasses our corporate headquarters and research
    and development facilities. This lease expires in August 2011.
    During 2008, we moved our Northeast operations to Salem, New
    Hampshire where we lease approximately 5,000 square feet.
    This lease expires in November 2013.
    In Folsom, California we lease approximately 1,600 square
    feet under an office lease that expires in June 2013.
    In Chiang Mai, Thailand, near the facilities of our contract
    manufacturer, HANA, we lease approximately 3,000 square
    feet under an office lease that expires in March 2013. We
    believe that these facilities are adequate to meet our current
    and near term future needs.  Item 3.
    Legal
    Proceedings       25




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Information
    Relating to our Common Stock
    High

LowFiscal Year Ended December 31, 2009First Quarter

$
2.51


$
1.36Second Quarter

$
3.08


$
1.71Third Quarter

$
3.43


$
2.24Fourth Quarter

$
3.05


$
2.25Fiscal Year Ended December 31, 2010First Quarter

$
2.95


$
2.28Second Quarter

$
3.61


$
2.62Third Quarter

$
3.16


$
2.00Fourth Quarter

$
3.14


$
2.02     Dividend
    Policy
    Equity
    Compensation Plan Information
    Number ofSecuritiesRemainingAvailablefor IssuanceUnder EquityNumber of


Weighted-


Number of


Weighted-


CompensationSecurities to be


Average


Securities to be


Average


PlansIssued Upon


Exercise


Released Upon


Grant


(ExcludingExercise of


Price of


Vesting of


Date Value of


SecuritiesOutstanding


Outstanding


Outstanding


Outstanding


Reflected inPlan Category

Options


Options


RSUs


RSUs


Column (a))(1)(a)


(b)


(a)


(b)


(c)Equity compensation plans approved by security holders


1,228,187


$
2.39



204,800


$
2.68



5,020,545
(2)Equity compensation plans not approved by security holders


0



0



0



0



0Total


1,228,187


$
2.39



204,800


$
2.68



5,020,545     (1)
    
    The number of shares that may be issued under the 2007 Equity
    Incentive Plan is increased automatically on January 1 of each
    year, beginning in 2008 and ending in 2012, by a number of
    shares equal to the lesser of (i) six percent of the number
    of shares of our common stock outstanding on such date,
    (ii) 1,500,000 shares and (iii) such lower number
    of shares as determined by our board of directors prior to such
    date.(2)
    
    Includes 446,473 shares issuable under the 2000 Employee
    Stock Purchase Plan. 26




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Performance
    Measurement Comparison
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN* Among
    Endwave Corporation, The NASDAQ Composite Index
    And The NASDAQ Telecommunications Index
  
  12/05


12/06


12/07


12/08


12/09


12/10Endwave Corporation



100.00




91.94




61.71




20.37




20.71




19.35NASDAQ Composite



100.00




111.74




124.67




73.77




107.12




125.93NASDAQ Telecommunications



100.00




131.50




146.22




85.43




118.25




129.78    *
    
    $100 invested on 12/31/05 in stock or index-including
    reinvestment of dividends.Fiscal year ending December 31. 27




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Item 6.
    Selected
    Consolidated Financial Data  The following selected consolidated financial data should be
    read in conjunction with Managements Discussion and
    Analysis of Financial Condition and Results of Operations
    and the consolidated financial statements and the notes thereto
    included elsewhere in this report. The selected consolidated
    statements of operations data for the fiscal years ended
    December 31, 2010, 2009 and 2008 and the selected
    consolidated balance sheet data as of December 31, 2010 and
    2009 are derived from our audited consolidated financial
    statements that are included elsewhere in this report. The
    selected consolidated statements of operations data for the
    fiscal years ended December 31, 2007 and 2006 and the
    selected consolidated balance sheet data as of December 31,
    2008, 2007 and 2006 are derived from our audited consolidated
    financial statements not included in this report. The historical
    results are not necessarily indicative of the results of
    operations to be expected in any future periods.
  Year Ended December 31,2010

2009

2008

2007

2006(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues

$
16,716


$
19,502


$
38,696


$
44,329


$
51,833Cost of product revenues


14,002



14,791



26,227



30,399



34,992Other operating expenses


10,761



15,651



17,741



16,820



17,369Income (loss) from continuing operations


(8,092
)


(10,626
)


(3,964
)


670



2,002Income (loss) from discontinued operations, net of tax






17,571



(10,787
)


(6,071
)


(3,347
)Net income (loss)

$
(8,092
)

$
6,945


$
(14,751
)

$
(5,401
)

$
(1,345
)Basic net income (loss) per share

$
(0.83
)

$
0.73


$
(1.60
)

$
(0.47
)

$
(0.12
)Diluted net income (loss) per share

$
(0.83
)

$
0.73


$
(1.60
)

$
(0.37
)

$
(0.10
)   December 31,2010

2009

2008

2007

2006(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term and long-term investments

$
23,527


$
66,465


$
45,348


$
48,957


$
67,587Total assets


32,474



77,116



70,340



82,589



100,653Long-term liabilities, less current portion


358



765



73



116



231Total stockholders equity


28,288



71,952



62,041



71,848



89,398   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read in
    conjunction with the consolidated financial statements and
    related notes included elsewhere in this report, as well as the
    information set forth in the Risk Factors section of
    this report. In addition to historical consolidated financial
    information, this discussion contains forward-looking statements
    that involve known and unknown risks and uncertainties,
    including statements regarding our expectations, beliefs,
    intentions or strategies regarding the future. All
    forward-looking statements included in this report are based on
    information available to us on the date hereof, and we assume no
    obligation to update any such forward-looking statements. Our
    actual results could differ materially from those discussed in
    the forward-looking statements. You are cautioned not to place
    undue reliance on these forward-looking statements. In the past,
    our operating results have fluctuated and are likely to continue
    to fluctuate in the future.
  Overview
   28




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
    Our semiconductor product line consists of a wide variety of
    monolithic microwave integrated circuits, or MMICs, including
    amplifiers, voltage controlled oscillators, up and down
    converters, variable gain amplifiers, voltage variable
    attenuators, fixed attenuators and filters. These types of
    devices are widely used in telecommunications, satellite,
    defense, security, instrumentation, scientific and consumer
    systems. While we have developed, produced and sold such devices
    for several years as components of our module products, we first
    offered them for sale as stand-alone products in the latter part
    of 2009 and they have not yet become a significant source of
    revenue for us.
    Our integrated transceiver modules combine several electronic
    functions into a single RF
    sub-system.
    Historically, our main customers for these products have been
    telecommunication network original equipment manufacturers, or
    OEMs, and system integrators that utilize them in digital
    microwave radios. More recently we have identified and pursued
    uses for these products in additional product areas; however
    these alternate applications have not yet become a significant
    source of revenue for us.  Markets
    and Outlook
  Telecommunications market. point-to-point
  Non-telecommunication markets.
  2010 Revenues.
  Current market outlook.
  Proposed
    Merger with GigOptix
   29




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##### Table of Contents



(ii) in-the-money
        Divestiture
    of our Defense and Security RF Module Business
  Form 10-K,
  Seasonality
    Critical
    Accounting Policies and Estimates
  General
   30




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Revenue
    Recognition
    Allowance
    for Doubtful Accounts
    Warranty
    Reserves
    Inventory
    Valuation
   31




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Stock-Based
    Compensation
          Deferred
    Taxes
    Goodwill,
    Intangible and Long-Lived Assets
         32




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Fair
    Value Measurement
    Business
    Combinations
   33




---



##### Table of Contents



Results
    of Operations
    Year Ended December 31,2010


2009


2008(In thousands)Revenues:Product revenues

$
16,716


$
19,502


$
38,593Development fees










103Total revenues


16,716



19,502



38,696Costs and expenses:Cost of product revenues


14,002



14,791



26,227Research and development


4,607



5,483



6,764Sales and marketing


2,154



2,183



3,446General and administrative


3,951



5,577



7,531Restructuring


49



2,408



Total costs and expenses


24,763



30,442



43,968Loss from operations


(8,047
)


(10,940
)


(5,272
)Interest and other income (expense), net


(45
)


209



1,242Loss from continuing operations before benefit for income taxes


(8,092
)


(10,731
)


(4,030
)Benefit for income taxes






(105
)


(66
)Loss from continuing operations


(8,092
)


(10,626
)


(3,964
)Income (loss) from discontinued operations, net of tax






17,571



(10,787
)Net income (loss)

$
(8,092
)

$
6,945


$
(14,751
)   34




---



##### Table of Contents



Year Ended December 31,2010


2009


2008(As a percentage of total revenues)Revenues:Product revenues


100.0
%


100.0
%


99.7
%Development fees










0.3Total revenues


100.0



100.0



100.0Costs and expenses:Cost of product revenues


83.8



75.9



67.8Research and development


27.6



28.1



17.5Sales and marketing


12.9



11.2



8.9General and administrative


23.6



28.6



19.4Restructuring


0.3



12.3



Total costs and expenses


148.1



156.1



113.6Loss from operations


(48.1
)


(56.1
)


(13.6
)Interest and other income, net


(0.3
)


1.1



3.2Loss from continuing operations before benefit for income taxes


(48.4
)


(55.0
)


(10.4
)Benefit for income taxes






(0.5
)


(0.2
)Loss from continuing operations


(48.4
)


(54.5
)


(10.2
)Income (loss) from discontinued operations, net of tax






90.1



(27.9
)Net income (loss)


(48.4
)%


35.6
%


(38.1
)%   Results
    of Operations
  Year
    ended December 31, 2010 compared to year ended
    December 31, 2009
  Total
    revenues
  Year Ended December 31,2010

2009

% Change(In thousands)Total revenues

$
16,716


$
19,502



(14.3
)%        35




---



##### Table of Contents



Cost of
    product revenues
  Year Ended December 31,2010

2009

% Change(In thousands)Cost of product revenues

$
14,002


$
14,791



(5.3
)%Percentage of revenues


83.8
%


75.9
%         Research
    and development expenses
  Year Ended December 31,2010

2009

% Change(In thousands)Research and development expenses

$
4,607


$
5,483



(16.0
)%Percentage of revenues


27.6
%


28.1
%         Sales and
    marketing expenses
  Year Ended December 31,2010

2009

% Change(In thousands)Sales and marketing expenses

$
2,154


$
2,183



(1.3
)%Percentage of revenues


12.9
%


11.2
%  36




---



##### Table of Contents



General
    and administrative expenses
  Year Ended December 31,2010

2009

% Change(In thousands)General and administrative expenses

$
3,951


$
5,577



(29.2
)%Percentage of revenues


23.6
%


28.6
%         Restructuring
  Year Ended December 31,2010

2009

% Change(In thousands)Restructuring

$
49


$
2,408



(98.0
)%        37




---



##### Table of Contents



Interest
    and other income (expense), net
  Year Ended December 31,2010

2009

% Change(In thousands)Interest and other income (expense), net

$
(45
)

$
209



(121.5
)%           Benefit
    for income taxes
  Year Ended December 31,2010

2009

% Change(In thousands)Benefit for income taxes

$



$
(105
)


(100.0
)%       Discontinued
    Operations
  Year Ended December 31,2010

2009

% Change(In thousands)Income (loss) from discontinued operations, net of tax

$



$
17,571



(100.0
)%  38




---



##### Table of Contents



Year
    ended December 31, 2009 compared to year ended
    December 31, 2008
  Total
    revenues
  Year Ended December 31,2009

2008

% Change(In thousands)Total revenues

$
19,502


$
38,696



(49.6
)%Product revenues

$
19,502


$
38,593



(49.5
)%Development fees

$



$
103



(100.0
)%     Cost of
    product revenues
  Year Ended December 31,2009

2008

% Change(In thousands)Cost of product revenues

$
14,791


$
26,227



(43.6
)%Percentage of revenues


75.9
%


67.8
%     Research
    and development expenses
  Year Ended December 31,2009

2008

% Change(In thousands)Research and development expenses

$
5,483


$
6,764



(18.9
)%Percentage of revenues


28.1
%


17.5
%    39




---



##### Table of Contents



Sales and
    marketing expenses
  Year Ended December 31,2009

2008

% Change(In thousands)Sales and marketing expenses

$
2,183


$
3,446



(36.7
)%Percentage of revenues


11.2
%


8.9
%     General
    and administrative expenses
  Year Ended December 31,2009

2008

% Change(In thousands)General and administrative expenses

$
5,577


$
7,531



(25.9
)%Percentage of revenues


28.6
%


19.5
%     Restructuring
  Year Ended December 31,2009

2008

% Change(In thousands)Restructuring

$
2,408


$




100.0
%        40




---



##### Table of Contents



Interest
    and other income (expense), net
  Year Ended December 31,2009

2008

% Change(In thousands)Interest and other income (expense), net

$
209


$
1,242



(83.2
)%         Benefit
    for income taxes
  Year Ended December 31,2009

2008

% Change(In thousands)Benefit for income taxes

$
(105
)

$
(66
)


59.1
%     Discontinued
    Operations
  Year Ended December 31,2009

2008

% Change(In thousands)Income (loss) from discontinued operations, net of tax

$
17,571


$
(10,787
)


(262.9
)%     41




---



##### Table of Contents



Liquidity
    and Capital Resources
    Year Ended December 31,2010

2009

2008(In thousands)Net cash provided by (used in) operating activities

$
(5,523
)

$
(4,098
)

$
2,373Net cash provided by (used in) investing activities


(6,538
)


27,892



(4,072
)Net cash provided by (used in) financing activities


(35,950
)


632



417Net cash used in discontinued operations






(3,266
)


(3,724
)Cash, cash equivalents, restricted cash, short-term and
    long-term investments at end of period

$
23,527


$
66,465


$
45,948                42




---



##### Table of Contents



Payments Due by PeriodLess than





More thanTotal

1 Year

1-3 Years

3-5 Years

5 Years(In thousands)Contractual Obligations:Capital lease obligations, including interest

$
2


$
2


$



$



$
Operating lease obligations


738



443



295







Purchase obligations


1,418



1,418











Total

$
2,158


$
1,863


$
295


$



$
     Other
    Long-Term Liabilities
    Recent
    Accounting Pronouncements
       43




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Quantitative
    and Qualitative Disclosures about Market Risk
     44




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageNumberReport of Independent Registered Public
    Accounting Firm


46Consolidated Balance Sheets


47Consolidated Statements of Operations


48Consolidated Statements of Stockholders
    Equity


49Consolidated Statements of Cash Flows


50Notes to Consolidated Financial Statements


51   45




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    46




---



##### Table of Contents



ENDWAVE
    CORPORATIONCONSOLIDATED BALANCE SHEETS
  December 31,2010


2009(In thousands, except share and per share data)ASSETSCurrent assets:Cash and cash equivalents

$
7,147


$
55,158Short-term investments


16,380



11,307Accounts receivable, net of allowance for doubtful accounts of
    $18 in 2010 and $19 in 2009


2,600



3,009Inventories


3,719



4,879Other current assets


554



788Total current assets


30,400



75,141Property and equipment, net


2,048



1,796Other assets


26



179Total assets

$
32,474


$
77,116LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,837


$
1,726Accrued warranty


614



1,087Accrued compensation


626



590Restructuring liabilities, short-term


431



570Other current liabilities


320



426Total current liabilities


3,828



4,399Restructuring liabilities, long-term


234



638Other long-term liabilities


124



127Total liabilities


4,186



5,164Commitments and contingencies (Note 10)Stockholders equity:Convertible preferred stock, $0.001 par value;
    5,000,000 shares authorized; zero and 300,000 shares
    issued and outstanding in 2010 and 2009, respectively






43,092Common stock, $0.001 par value; 50,000,000 shares
    authorized; 9,832,684 and 9,684,756 shares issued and
    outstanding in 2010 and 2009, respectively


10



10Additional paid-in capital, common stock


317,291



309,755Accumulated other comprehensive income (loss)


(1
)


15Accumulated deficit


(289,012
)


(280,920
)Total stockholders equity


28,288



71,952Total liabilities and stockholders equity

$
32,474


$
77,116    47




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2010


2009


2008(In thousands, except share and per share data)Revenues:Product revenues

$
16,716


$
19,502


$
38,593Development fees










103Total revenues


16,716



19,502



38,696Costs and expenses:Cost of product revenues*


14,002



14,791



26,227Research and development*


4,607



5,483



6,764Sales and marketing*


2,154



2,183



3,446General and administrative*


3,951



5,577



7,531Restructuring


49



2,408



Total costs and expenses


24,763



30,442



43,968Loss from operations


(8,047
)


(10,940
)


(5,272
)Interest and other income (expense), net


(45
)


209



1,242Loss from continuing operations before benefit for income taxes


(8,092
)


(10,731
)


(4,030
)Benefit for income taxes






(105
)


(66
)Loss from continuing operations


(8,092
)


(10,626
)


(3,964
)Income (loss) from discontinued operations, net of tax*
    (Note 11)






17,571



(10,787
)Net income (loss)

$
(8,092
)

$
6,945


$
(14,751
)Basic net loss per share from continuing operations

$
(0.83
)

$
(1.12
)

$
(0.43
)Basic net income (loss) per share from discontinued operations

$



$
1.85


$
(1.17
)Basic net income (loss) per share

$
(0.83
)

$
0.73


$
(1.60
)Diluted net loss per share from continuing operations

$
(0.83
)

$
(1.12
)

$
(0.43
)Diluted net income (loss) per share from discontinued operations

$



$
1.85


$
(1.17
)Diluted net income (loss) per share

$
(0.83
)

$
0.73


$
(1.60
)Shares used in computing basic net income (loss) per share


9,774,161



9,526,358



9,211,110Shares used in computing diluted net income (loss) per share


9,774,161



9,526,358



9,211,110* Includes the following amounts related to stock-based
    compensation:Cost of product revenues

$
(24
)

$
150


$
385Research and development


36



326



643Sales and marketing


54



374



626General and administrative


320



1,135



1,453Income (loss) from discontinued operations, net of tax






355



988    48




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  Shares of

















AccumulatedConvertible


Convertible


Shares of





Additional





OtherPreferred


Preferred


Common


Common


Paid-In


Treasury


Comprehensive


AccumulatedStock


Stock


Stock


Stock


Capital


Stock


Income (Loss)


Deficit


Total(In thousands, except for share data)Balance as of December 31, 2007


300,000


$
43,092



9,174,622


$
9


$
301,946


$
(79
)

$
(6
)

$
(273,114
)

$
71,848Change in unrealized gain on short-term investments


























36







36Foreign currency translation adjustment


























12







12Net loss






























(14,751
)


(14,751
)Comprehensive loss


































(14,703
)Exercise of stock options










2,748







5















5Retirement of common stock










(39,150
)






(79
)


79











Issuance of common stock under employee stock purchase plan










207,222







791















791Stock-based compensation


















4,100















4,100Balance as of December 31, 2008


300,000



43,092



9,345,442



9



306,763







42



(287,865
)


62,041Change in unrealized gain on short-term investments


























(27
)






(27
)Net income






























6,945



6,945Comprehensive loss


































6,918Exercise of stock options










198,079



1



330















331Issuance of common stock under employee stock purchase plan










141,235







317















317Stock-based compensation


















2,345















2,345Balance as of December 31, 2009


300,000



43,092



9,684,756



10



309,755







15



(280,920
)


71,952Change in unrealized gain (loss) on short-term investments


























(16
)






(16
)Net loss






























(8,092
)


(8,092
)Comprehensive loss


































(8,108
)Exercise of stock options










83,538







172















172Issuance of common stock under employee stock purchase plan










64,390







129















129Repurchase of preferred stock


(300,000
)


(43,092
)










6,854















(36,238
)Stock-based compensation


















381















381Balance as of December 31, 2010





$




9,832,684


$
10


$
317,291


$



$
(1
)

$
(289,012
)

$
28,288    49




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
   Year Ended December 31,2010


2009


2008(In thousands)Operating activities:Net income (loss)

$
(8,092
)

$
6,945


$
(14,751
)Income (loss) from discontinued operations






17,571



(10,787
)Loss from continuing operations, net of tax


(8,092
)


(10,626
)


(3,964
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Depreciation


890



779



595Stock compensation expense


386



1,985



3,107Amortization of investments, net


307



328



(43
)Gain on the sale of land and equipment










(13
)Gain on sale of investments










(57
)Changes in operating assets and liabilities:Accounts receivable


409



(462
)


4,963Inventories


1,155



4,724



(308
)Other assets


387



(767
)


251Accounts payable


111



665



(1,675
)Accrued warranty


(473
)


(706
)


(600
)Accrued compensation, restructuring and other current and long
    term liabilities


(603
)


(18
)


117Net cash provided by (used in) operating activities


(5,523
)


(4,098
)


2,373Investing activities:Proceeds from sale of discontinued operations






28,000



Purchase of ALC Microwave, Inc., net of cash acquired










(1,027
)Change in restricted cash






600



(575
)Purchases of property and equipment


(1,142
)


(396
)


(1,295
)Proceeds from sale of property and equipment










74Purchases of investments


(28,776
)


(31,827
)


(19,731
)Proceeds on sales and maturities of investments


23,380



31,515



18,482Net cash provided by (used in) investing activities


(6,538
)


27,892



(4,072
)Financing activities:Preferred stock repurchased


(36,238
)






Common stock repurchased










(356
)Payments on capital leases


(13
)


(16
)


(23
)Proceeds from exercises of stock options


172



331



5Proceeds from issuance of common stock


129



317



791Net cash provided by (used in) financing activities


(35,950
)


632



417Effect of foreign exchange rate changes on cash and cash
    equivalents










12Cash flows from discontinued operations:Operating activities






(2,472
)


(2,526
)Investing activities






(794
)


(1,198
)Financing activities










Net cash used in discontinued operations






(3,266
)


(3,724
)Net change in cash and cash equivalents


(48,011
)


21,160



(4,994
)Cash and cash equivalents at beginning of year


55,158



33,998



38,992Cash and cash equivalents at end of year

$
7,147


$
55,158


$
33,998Supplemental disclosure of cash flow information:Non-cash transactions:Change in unrealized gain (loss) on investments

$
(16
)

$
(27
)

$
36Capitalized stock-based compensation

$
(5
)

$
5


$
5    50




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    The
    Company    
    The Companys semiconductor product line consists of a wide
    variety of monolithic microwave integrated circuits
    (MMICs), including amplifiers, voltage controlled
    oscillators, up and down converters, variable gain amplifiers,
    voltage variable attenuators, fixed attenuators and filters.
    These types of devices are widely used in telecommunications,
    satellite, defense, security, instrumentation, scientific and
    consumer systems. While the Company has developed, produced and
    sold such devices for several years as components of the
    Companys module products. They were first offered for sale
    as stand-alone products in the latter part of 2009 and they have
    not yet become a significant source of revenue for the Company.
    The Companys integrated transceiver modules combine
    several electronic functions into a single RF
    sub-system.
    Historically, the Companys main customers for these
    products have been telecommunication network original equipment
    manufacturers and system integrators that utilize them in
    digital microwave radios. More recently the Company has
    identified and pursued uses for these products in additional
    product areas; however these alternate applications have not yet
    become a significant source of revenue for the Company.    2.
    Summary
    of Significant Accounting Policies  Basis
    of Consolidation
        Use of
    Estimates
   51




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
    Warranty
      2010


2009(In thousands)Balance at January 1

$
1,087


$
2,439Warranties accrued


403



690Warranties settled or reversed


(876
)


(1,314
)Warranties transferred due to sale of the Defense and Security
    RF module business






(728
)Balance at December 31

$
614


$
1,087   Allowance
    for Doubtful Accounts
    Cash
    Equivalents and Short-Term Investments
    available-for-sale Available-for-sale
 52




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  other-than-temporary
  Inventory
    Valuation
  first-in,
  Property
    and Equipment
    DepreciableLifeSoftware


3 yearsLeasehold improvements


2 to 5 yearsMachinery and equipment


5 to 7 years   Goodwill,
    Intangible and Long-Lived Assets
         53




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Income
    Taxes
      Stock-Based
    Compensation
         54




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Research
    and Development Expenses
    Concentration
    of Risk
                 55




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Fair
    Value of Financial Instruments
      December 31, 2010Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Investments:Commercial paper

$
4,248


$



$



$
4,248United States government agencies


11,822



2



(3
)


11,821Corporate securities


311











311Total

$
16,381


$
2


$
(3
)

$
16,380   56




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2009Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Investments:Commercial paper

$
799


$



$



$
799United States government agencies


8,759



5



(2
)


8,762Corporate securities


1,734



12







1,746Total

$
11,292


$
17


$
(2
)

$
11,307         other-than-temporary,
  Fair
    Value Measurements
    Quoted Prices inBalance as of


Active Markets of


Significant OtherDecember 31,


Identical Assets


Observable Inputs2010


(Level 1)


(Level 2)Assets:Cash equivalents:Money market funds

$
2,911


$
2,911


$
Commercial paper


2,454







2,454Corporate bond


250







250Short-term investments:Commercial paper


4,248







4,248United States government agencies


11,821







11,821Corporate securities


311







311Total

$
21,995


$
2,911


$
19,084Liabilities:

$



$



$
  57




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Quoted Prices inBalance as of


Active Markets of


Significant OtherDecember 31,


Identical Assets


Observable Inputs2009


(Level 1)


(Level 2)Assets:Cash equivalents:Money market funds

$
54,097


$
54,097


$
Short-term investments:Commercial paper


799







799United States government agency


8,762







8,762Corporate securities


1,746







1,746Total

$
65,404


$
54,097


$
11,307Liabilities:

$



$



$
       Foreign
    Currency Transactions
  non-U.S. currencies, non-U.S. currencies non-U.S. currencies
  Comprehensive
    Income (Loss)
  available-for-sale
 58




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2010


2009Accumulated other comprehensive income (loss):Foreign currency translation adjustments

$



$
Unrealized gain (loss) on investments


(1
)


15Total

$
(1
)

$
15   Net
    Income (Loss) Per Share
      Year Ended December 31,2010

2009

2008Convertible preferred stock






3,000,000



3,000,000Stock options to purchase common stock


1,228,187



1,010,561



3,008,917Unvested restricted stock units


204,800







Warrant to purchase convertible preferred stock










900,000Shares issuable under the employee stock purchase plan


30,012



46,113



128,589     Advertising
    Costs
    Recent
    Accounting Pronouncements
     59




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    3.
    Inventories    2010


2009Raw materials

$
3,221


$
4,046Work in process


149



292Finished goods


349



541Total

$
3,719


$
4,879     4.
    Note
    Receivable       60




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Property
    and Equipment    2010


2009Machinery and equipment

$
9,276


$
8,135Software


1,065



1,064Leasehold improvements


605



60510,946



9,804Less accumulated depreciation


(8,898
)


(8,008
)Property and equipment, net

$
2,048


$
1,796           6.
    Segment
    Disclosures    2010


2009


2008United States

$
4,015



24.0
%

$
605



3.1
%

$
1,064



2.7
%Finland


10



0.1
%


9,997



51.3
%


31,266



80.8
%Germany


8,451



50.6
%


3,567



18.3
%






0.0
%Hungary


855



5.1
%


1,595



8.2
%


1,223



3.2
%Slovakia


2,908



17.4
%


3,478



17.8
%


3,288



8.5
%Rest of the world


477



2.8
%


260



1.3
%


1,845



4.8
%Total

$
16,716



100.0
%

$
19,502



100.0
%

$
38,686



100.0
%  61




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      7.
    Stock-Based
    Compensation  Stock
    Option Exchange
  2009
    Exchange Offer
      2008
    Exchange Offer
     62




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Based Compensation
      Year Ended December 31,2010


2009


2008Stock-based compensation expense by type of award:Employee stock options and restricted stock units

$
511


$
2,166


$
3,434Employee stock purchase plan


(130
)


179



666Amounts capitalized into inventory during the year


(6
)


(46
)


(65
)Amounts capitalized as inventory and expensed


11



41



60Total stock-based compensation


386



2,340



4,095Tax effect on stock-based compensation










Total stock-based compensation expense

$
386


$
2,340


$
4,095Impact on basic and diluted net income (loss) per share

$
(0.04
)

$
(0.25
)

$
(0.44
)            63




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Valuation
    Assumptions
    Year Ended December 31,2010


2009


2008Stock Option PlansExpected dividend yield


0.0
%


0.0
%


0.0
%Expected stock price volatility


69
%


70
%


70
%Risk free interest rate


0.51 - 2.43
%


1.43 - 2.53
%


1.80 - 3.39
%Expected life of options in years


4.6 years



4.1 years



3.6 years     Year Ended December 31,2010


2009


2008Employee Stock Purchase PlanExpected dividend yield


0.0
%


0.0
%


0.0
%Expected stock price volatility


51
%


51
%


51
%Risk free interest rate


0.18 - 1.06
%


0.16 - 0.95
%


1.61 - 4.74
%Expected life of options in years


1.2 years



1.2 years



1.1 - 1.2 years    64




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      8.
    Stockholders
    Equity  Preferred
    Stock and Warrant Purchase Agreement
          Common
    Stock
    Employee
    Stock Purchase Plan
     65




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Option Plans
             66




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedWeighted

AverageAverage

Remaining

AggregateNumber of

Exercise

Contractual

IntrinsicShares

Price

Term (Years)

Value(In thousands)Outstanding at December 31, 2007


2,465,436



1.91Options granted


1,025,821



6.44Options exercised


(2,748
)


1.90Options cancelled


(479,592
)


23.66Outstanding at December 31, 2008


3,008,917



9.23Options granted


1,082,924



2.21Options exercised


(198,079
)


1.67Options cancelled


(2,883,201
)


9.54Outstanding at December 31, 2009


1,010,561



2.31Options granted


387,900



2.61Options exercised


(83,538
)


2.06Options cancelled


(86,736
)


2.81Outstanding at December 31, 2010


1,228,187


$
2.39



6.88


$
155Options vested and exercisable and expected to be exercisable at
    December 31, 2010


1,172,967


$
2.39



6.77


$
151Options vested and exercisable at December 31, 2010


681,146


$
2.35



5.23


$
110     Options Vested andExercisableAt December 31,Options Outstanding at December 31, 2010

2010Weighted-Weighted-

AverageAverage

Remaining



Weighted-Exercise

Contractual



AverageRange of Exercise Price

Shares

Price

Life

Shares

Exercise Price$0.76 - $1.21


11,183


$
1.13



2.00



11,183


$
1.13$1.81 - $1.81


271,026


$
1.81



5.46



175,036


$
1.81$1.93 - $2.32


129,209


$
2.19



7.39



42,602


$
1.93$2.40 - $2.40


43,000


$
2.40



8.58



15,937


$
2.40$2.53 - $2.53


453,269


$
2.53



6.15



342,825


$
2.53$2.55 - $2.55


30,300


$
2.55



8.34



30,112


$
2.55$2.65 - $2.65


252,444


$
2.65



9.04



48,480


$
2.65$2.92 - $13.23


37,756


$
4.00



7.92



14,971


$
5.101,228,187


$
2.39



6.88



681,146


$
2.35  67




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted-Weighted-

AverageAverage

Remaining

AggregateNumber of

Grant Date

Contractual

IntrinsicShares

Fair Value

Term (Years)

Value(In thousands)Outstanding at December 31, 2009





$
0.00Awarded


218,000



2.67Released






0.00Forfeited


(13,200
)


2.61Outstanding at December 31, 2010


204,800


$
2.68



0.68


$
467         9.
    Restructuring         68




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010


2009(In thousands)Balance at January 1

$
1,208


$
Restructuring charge


63



2,705Cash payments


(638
)


(1,421
)Imputed interest


46



Restructuring charge adjustment


(14
)


(76
)Balance at December 31

$
665


$
1,208         10.
    Commitments
    and Contingencies  Commitments
      Years Ending December 31,2011

$
4432012


1782013


117Total

$
738  69




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ending December 31,2011

$
2Less amount representing interest


Present value of future minimum lease payments


2Less current portion


2Long-term portion

$
     Purchase
    Obligations
    Contingencies
    11.
    Discontinued
    Operations     70




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008Revenues of discontinued operations

$
5,313


$
19,558Loss from discontinued operations


(2,028
)


(10,787
)Gain on sale of discontinued operations, net of tax


19,599



Net income (loss) from discontinued operations, net of tax

$
17,571


$
(10,787
)     12.
    Income
    Taxes  non-U.S. loss
  Years Ended December 31,2010


2009


2008Current income tax expense (benefit):Federal

$



$
(105
)

$
(57
)State










(9
)



(105
)


(66
)Deferred income tax expense (benefit):Federal










State










$



$
(105
)

$
(66
)          71




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010


2009Deferred tax assets:Net operating loss carryforwards

$
67,593


$
65,302Net research credit


1,826



1,830Other


6,437



7,422Total deferred tax assets


75,856



74,554Valuation allowance for deferred tax assets


(75,856
)


(74,554
)Net deferred tax assets (liabilities)

$



$
         2010


2009


2008(In thousands)Expense (benefit) from income taxes at statutory rate

$
(2,834
)

$
2,394


$
(5,186
)State taxes










(9
)Losses for which no benefit is taken


2,920



1,380



3,757Non-deductible stock compensation






68



295Sale of discontinued operation






(3,646
)


Goodwill impairment










1,045Other


(86
)


(301
)


32Total

$



$
(105
)

$
(66
)  72




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Total(Inthousands)Balance at December 31, 2007

$
2,617Increases related to current year tax positions


54Increases related to prior year tax positions


37Decreases related to prior year tax positions


Balance at December 31, 2008


2,708Increases related to current year tax positions


95Increases related to prior year tax positions


34Decreases related to prior year tax positions


(330
)Balance at December 31, 2009


2,507Increases related to current year tax positions


64Increases related to prior year tax positions


17Decreases related to prior year tax positions


(67
)Balance at December 31, 2010

$
2,521   and/or and/or
    13.
    401(k)
    Plan   73




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Quarterly
    Financial Information (unaudited)  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(In thousands, except per share data)2010:Total revenues

$
4,834


$
3,753


$
4,058


$
4,071Cost of product revenues


3,391



4,036



3,169



3,406Net loss(1)


(1,283
)


(2,814
)


(1,999
)


(1,996
)Basic and diluted net loss per share(1)

$
(0.13
)

$
(0.29
)

$
(0.20
)

$
(0.20
)2009:Total revenues

$
7,242


$
5,580


$
3,126


$
3,554Cost of product revenues


4,819



4,237



2,369



3,366Loss from continuing operations(2)


(2,593
)


(1,957
)


(2,634
)


(3,442
)Income (loss) from discontinued operations


(1,067
)


18,597



41



Net income (loss)(2)


(3,660
)


16,640



(2,593
)


(3,442
)Basic and diluted net income (loss) per share(2)

$
(0.39
)

$
1.76


$
(0.27
)

$
(0.36
)     (1)
    
    During the first and second quarters of 2010, the Company
    incurred $300,000 and $1.5 million, respectively, of
    inventory write-offs associated with excess and obsolete
    material related to a rapid drop in sales of a legacy product
    for a major customers radio platform.(2)
    
    During the fourth quarter of 2009, the Company incurred $878,000
    of inventory write-offs associated with excess and obsolete
    material related to a rapid drop in sales of a legacy product
    for a major customers radio platform.  15.
    Subsequent
    Events  Proposed
    Merger with GigOptix
    (.425/.575) (ii) in-the-money
   74




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2011
    Restructuring
   75




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e))
    Managements
    Annual Report on Internal Control Over Financial
    Reporting
        Changes
    in Internal Controls Over Financial Reporting
    Item 9B.
    Other
    Information   76




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Name

Age

PositionJohn J. Mikulsky


65


Chief Executive Officer, President and DirectorCurt P. Sacks


40


Chief Financial Officer, Senior Vice President and SecretarySteven F. Layton


56


Senior Vice President of Sales and MarketingDaniel P. Teuthorn


47


Senior Vice President of Product Development and OperationsJoseph J. Lazzara(1)(2)(3)


59


DirectorJohn F. McGrath, Jr.(1)(2)(3)


46


DirectorWade Meyercord(1)(2)(3)


70


Chairman of the Board of Directors     (1)
    
    Member of the Audit Committee(2)
    
    Member of the Nominating and Governance Committee(3)
    
    Member of the Compensation Committee    John J. Mikulsky
  Curt P. Sacks
  Steven F. Layton
 77




---



##### Table of Contents



Daniel P. Teuthorn
  Joseph J. Lazzara
  John F. McGrath, Jr.
  Wade Meyercord e-commerce
 78




---



##### Table of Contents



Section 16(a)
    Beneficial Ownership Reporting Compliance
      Committees
    of the Board of Directors
    Audit
    Committee
   79




---



##### Table of Contents



Compensation
    Committee
      
    Developing compensation policies that will attract and retain
    the highest quality executives, that will clearly articulate the
    relationship of corporate performance to executive compensation
    and will reward executives for Endwaves progress;
    Proposing to the Board of Directors the adoption, amendment and
    termination of stock option plans, stock appreciation rights
    plans, pension and profit sharing plan, stock bonus plans, stock
    purchase plans, bonus plans, deferred compensation plans and
    other similar plans;
    Granting rights, participation and interests in such plans to
    eligible participants, subject in certain cases to ratification
    by the Board;
    Reviewing and approving such other compensation matters as may
    be necessary or appropriate in view of the Compensation
    Committees overall responsibility; and
    Reviewing with management our Compensation Discussion and
    Analysis and considering whether to recommend that it be
    included in proxy statements and other filings.   80




---



##### Table of Contents




    The amount of the bonus to be awarded to each executive officer
    in respect of the prior years performance;
    Whether to raise, lower or maintain the executive officers
    base salary for the current year;
    The bonus targets to be set for the executive officers for the
    current year; and
    Option grants and restricted stock units, if any, to be awarded
    to each executive officer.  Nominating
    and Governance Committee
    Code of
    Business Conduct and Ethics
         Item 11.
    Executive
    Compensation  COMPENSATION
    OF EXECUTIVE OFFICERS
  Compensation
    Discussion and Analysis
   81




---



##### Table of Contents



Role
    of Compensation Committee and Chief Executive
    Officer
  Rule 16b-3
    
    Developing compensation policies that will attract and retain
    the highest quality executives, will clearly articulate the
    relationship of corporate performance to executive compensation
    and will reward executives for Endwaves progress;
    Proposing to the Board of Directors the adoption, amendment and
    termination of stock option plans, stock appreciation rights
    plans, pension and profit sharing plan, stock bonus plans, stock
    purchase plans, bonus plans, deferred compensation plans and
    other similar plans;
    Granting rights, participation and interests in such plans to
    eligible participants, subject in certain cases to ratification
    by the Board of Directors; and
    Reviewing and approving such other compensation matters as may
    be necessary or appropriate in view of the Compensation
    Committees overall responsibility.    
    The amount of bonus compensation to be awarded to each executive
    officer in respect of the prior years performance;
    Whether to raise, lower or maintain the executive officers
    base salary for the current year;
    The bonus targets to be set for the executive officers for the
    current year; and
    Option grants and restricted stock units, if any, to be awarded
    to each executive officer.   82




---



##### Table of Contents



Comparable
    Company Comparisons
      Elements
    of Executive Compensation
    Base Salary:
  Annual Cash Incentive:
 83




---



##### Table of Contents



Stock Options and Restricted Stock Units:
    Other Benefits:
  Chief
    Executive Officer Compensation
    Employment,
    Severance and Change in Control Agreements
    Executive Officer Severance and Retention Plan Assuming No
    Change of Control:
 84




---



##### Table of Contents



Potential
    2010 Severance and Retention Benefits Assuming No Change of
    Control
    COBRA

Option

TotalName

Salary(1)

Benefits(2)

Awards(3)

BenefitJohn J. Mikulsky

$
493,500


$
52,500


$
30,168


$
576,168Curt P. Sacks

$
110,000


$
7,500


$
4,113


$
121,613Daniel P. Teuthorn

$
229,000


$
15,000


$
5,154


$
249,154Steven F. Layton

$
215,000


$
15,000


$
9,715


$
239,715     (1)
    
    Reflects the greater of 9 months salary or
    1.5 months salary for each full year of employment
    for Mr. Mikulsky (21 months) and the greater of
    6 months salary or 1 month salary for each full
    year of employment up to a maximum of 12 months for
    Mr. Sacks (6 months), Mr. Teuthorn
    (12 months) and Mr. Layton (12 months).(2)
    
    Reflects the greater of 9 months coverage or
    1.5 months coverage for each full year of employment for
    Mr. Mikulsky (21 months) and the greater of
    6 months coverage or 1 month coverage for each full
    year of employment up to a maximum of 12 months for
    Mr. Sacks (6 months), Mr. Teuthorn
    (12 months) and Mr. Layton (12 months).(3)
    
    Reflects value of options accelerated in the event of
    termination without cause without a change of control. Since the
    closing price of Endwaves common stock on
    December 31, 2010, was $2.28 and the exercise prices of
    certain options outstanding and
    in-the-money
    on December 31, 2010, were below the closing price, the
    value of the
    in-the-money
    options that would have been accelerated are reflected above.  Executive Officer Severance and Retention Plan Assuming a
    Change of Control:
   85




---



##### Table of Contents



COBRA

Option

TotalName

Salary(1)

Benefits(2)

Awards(3)

BenefitJohn J. Mikulsky

$
987,000


$
105,000


$
30,168


$
1,122,168
(4)Curt P. Sacks

$
220,000


$
15,000


$
9,400


$
244,400Daniel P. Teuthorn

$
229,000


$
15,000


$
10,441


$
254,441Steven F. Layton

$
215,000


$
15,000


$
15,003


$
245,003     (1)
    
    Reflects the greater of 18 months salary or three
    months salary for each full year of employment for
    Mr. Mikulsky (42 months) and 12 months
    salary for Mr. Sacks, Mr. Teuthorn and Mr. Layton.(2)
    
    Reflects the greater of nine months coverage or 1.5 months
    coverage for each full year of employment for Mr. Mikulsky
    (21 months) and 12 months coverage for Mr. Sacks,
    Mr. Teuthorn and Mr. Layton.(3)
    
    Reflects value of options accelerated in the event of
    termination without cause in connection with a change of
    control. Since the closing price of Endwaves common stock
    on December 31, 2010, was $2.28 and the exercise prices of
    certain options outstanding and
    in-the-money
    on December 31, 2010 were below the closing price, the
    value of the
    in-the-money
    options that would have been accelerated are reflected above.(4)
    
    In connection with the proposed Merger with GigOptix, it is
    anticipated that Mr. Mikulskys benefit will be
    reduced to an amount that maximizes the aggregate present value
    of such benefit without causing any payment to create an excise
    tax liability under Section 4999 of the Internal Revenue
    Code of 1986, as amended. 86




---



##### Table of Contents



Named
    Executive Officer Compensation
    Summary
    Compensation Table
  Non-EquityStock

Incentive Plan

All Other

TotalName and Principal Position

Year

Salary

Bonus

Awards

Compensation

Compensation

Compensation(1)





(2)



(3)John J. Mikulsky


2010


$
282,000



0


$
267,504


$
0


$
9,496


$
559,000President and Chief
    Executive Officer


2009


$
282,000



0


$
130,576


$
0


$
2,618


$
415,1942008


$
280,385



0


$
222,316


$
42,300


$
7,287


$
552,288Curt P. Sacks


2010


$
213,462



0


$
77,128


$
0


$
1,471


$
292,061Senior Vice President and


2009


$
199,615



0


$
112,430


$
0


$
9,718


$
321,763Chief Financial OfficerSteven F. Layton


2010


$
215,000



0


$
77,128


$
0


$
1,310


$
293,438Senior Vice President


2009


$
215,000



0


$
65,289


$
0


$
2,243


$
282,532Sales and Marketing


2008


$
213,731



0


$
111,158


$
21,500


$
5,492


$
351,881Daniel F. Teuthorn


2010


$
229,000



0


$
77,128


$
0


$
2,178


$
308,306Senior Vice President


2009


$
229,000



0


$
60,862


$
0


$
2,333


$
292,195Product Development and Operations


2008


$
227,731



0


$
93,540


$
22,900


$
86,921


$
431,092     (1)
    
    Mr. Mikulsky has held the position of Chief Executive
    Officer since December 2009, and prior to that,
    Mr. Mikulsky was an Executive Officer for the Company since
    2001. Mr. Sacks has held the position of Chief Financial
    Officer since June 2009.(2)
    
    The amounts in this column represent the compensation cost
    related to stock option and restricted stock unit awards issued
    to named executive officers. For purposes of this table, the
    fair value excludes the impact of estimated forfeitures. For a
    discussion of other valuation assumptions, see Note 7 to
    our consolidated financial statements included elsewhere in this
    report.(3)
    
    The amounts in this column represent all other compensation
    payments. Also included are total payments made by Endwave for
    group insurance, educational reimbursement. Other compensation
    for Mr. Teuthorn included educational reimbursement of
    $81,123 in 2008. 87




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##### Table of Contents



Grants of
    Plan-Based Awards in Fiscal 2010
  Grant DateAll







ClosingAll



Other







MarketOther



Stock







Price of



Grant DateEstimated Possible Payouts



Option



Awards:



Exercise



Securities



FairUnder Non-Equity Incentive



Awards:



Number of



or Base



Underlying



Value ofPlan Awards



Number of



Shares of



Price of



Stock and



Stock andSecurities



Restricted



Option



Option



OptionGrant



Threshold



Target



Maximum



Underlying



Stock



Awards



Awards



AwardsName


Date



($)



($)



($)



Options



Units



($/Sh)



($/Sh)(1)



($)John J. Mikulsky



2/5/10



$
0



$
0



$
0




50,000








$
2.65



$
2.58



$
74,683
(2)John J. Mikulsky



2/5/10



$
0



$
0



$
0




60,000








$
2.65



$
2.58



$
89,620
(2)John J. Mikulsky



2/5/10



$
0



$
0



$
0









40,000








$
2.58



$
103,200
(3)Curt P. Sacks



2/5/10



$
0



$
0



$
0




24,000








$
2.65



$
2.58



$
35,848
(2)Curt P. Sacks



2/5/10



$
0



$
0



$
0









16,000








$
2.58



$
41,280
(3)Daniel P. Teuthorn



2/5/10



$
0



$
0



$
0




24,000








$
2.65



$
2.58



$
35,848
(2)Daniel P. Teuthorn



2/5/10



$
0



$
0



$
0









16,000








$
2.58



$
41,280
(3)Steven F. Layton



2/5/10



$
0



$
0



$
0




24,000








$
2.65



$
2.58



$
35,848
(2)Steven F. Layton



2/5/10



$
0



$
0



$
0









16,000








$
2.58



$
41,280
(3)     (1)
    
    The exercise price for option awards is determined as the
    closing price on the day prior to grant. Therefore, the grant
    date closing price of the security underlying the option can
    differ materially, positively or negatively, from the exercise
    price of the option award. The restricted stock unit awards do
    not have an exercise price.(2)
    
    Each option vests as to 1/8 of the shares of common stock
    underlying it on the six month anniversary of the grant date,
    with the remaining seven-eighths of the grant vesting in equal
    quarterly installments over the remaining four-year vesting
    period. For the purposes of this table, the value excludes the
    impact of estimated forfeitures. For a discussion of other
    valuation assumptions, see Note 7 to our consolidated
    financial statements.(3)
    
    Each restricted stock unit vests as to 50% of the shares of
    common stock underlying it on the one year anniversary of the
    grant date, with the remainder vesting on the second anniversary
    of the grant date. For the purposes of this table, the value
    excludes the impact of estimated forfeitures. 88




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##### Table of Contents



Outstanding
    Equity Awards at December 31, 2010
  Number of SecuritiesNumber of Securities Underlying

Option

Option

UnderlyingUnexercised Options/(1)(2)(3)

Exercise

Expiration

Unvested RSUs/(4)Name and Principal Position

Exercisable

Unexercisable

Price

Date

UnvestedJohn J. Mikulsky


5,860



0


$
1.17



1/30/2013



013,894



0


$
1.93



6/05/2013



040,000



0


$
1.81



2/05/2019



013,333
(3)


0


$
2.53



9/10/2019



01,552
(3)


0


$
2.53



9/10/2019



03,447
(3)


0


$
2.53



9/10/2019



010,000
(3)


0


$
2.53



9/10/2019



010,000
(3)


0


$
2.53



9/10/2019



05,000
(3)


0


$
2.53



9/10/2019



02,038
(3)


0


$
2.53



9/10/2019



06,295
(3)


0


$
2.53



9/10/2019



01,641
(3)


0


$
2.53



9/10/2019



013,333
(3)


0


$
2.53



9/10/2019



050,000
(2)


0


$
2.65



2/04/2020



060,000
(2)


0


$
2.65



2/04/2020



040,000
(4)Curt P. Sacks


20,000



0


$
1.81



2/05/2019



040,000



0


$
2.40



7/30/2019



06,666
(3)


0


$
2.53



9/10/2019



0875
(3)


0


$
2.53



9/10/2019



01,000
(3)


0


$
2.53



9/10/2019



02,500
(3)


0


$
2.53



9/10/2019



013,333
(3)


0


$
2.53



9/10/2019



0833
(3)


0


$
2.53



9/10/2019



06,666
(3)


0


$
2.53



9/10/2019



024,000
(2)


0


$
2.65



2/04/2020



016,000
(4)Steven F. Layton


1,351



0


$
1.17



1/30/2013



02,813



0


$
1.93



6/05/2013



08,910



0


$
1.93



6/05/2013



020,000



0


$
1.81



2/05/2019



06,666
(3)


0


$
2.53



9/10/2019



01,552
(3)


0


$
2.53



9/10/2019



0947
(3)


0


$
2.53



9/10/2019



05,000
(3)


0


$
2.53



9/10/2019



05,000
(3)


0


$
2.53



9/10/2019



02,916
(3)


0


$
2.53



9/10/2019



02,446
(3)


0


$
2.53



9/10/2019



03,554
(3)


0


$
2.53



9/10/2019



06,666
(3)


0


$
2.53



9/10/2019



024,000
(2)


0


$
2.65



2/04/2020



016,000
(4)Daniel P. Teuthorn


938



0


$
1.17



1/30/2013



020,000



0


$
1.81



2/05/2019



06,666
(3)


0


$
2.53



9/10/2019



01,358
(3)


0


$
2.53



9/10/2019



0829
(3)


0


$
2.53



9/10/2019



0 89




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##### Table of Contents



Number of SecuritiesNumber of Securities Underlying

Option

Option

UnderlyingUnexercised Options/(1)(2)(3)

Exercise

Expiration

Unvested RSUs/(4)Name and Principal Position

Exercisable

Unexercisable

Price

Date

Unvested2,500
(3)


0


$
2.53



9/10/2019



05,000
(3)


0


$
2.53



9/10/2019



02,500
(3)


0


$
2.53



9/10/2019



02,038
(3)


0


$
2.53



9/10/2019



02,961
(3)


0


$
2.53



9/10/2019



06,666
(3)


0


$
2.53



9/10/2019



024,000
(2)


0


$
2.65



2/04/2020



016,000
(4)     (1)
    
    Each option vests as to 1/8 of the shares of common stock
    underlying it on the six month anniversary of the grant date,
    with the remaining seven-eighths of the grant vesting in equal
    quarterly installments over the remaining four-year vesting
    period. Each option expires ten years after the date of grant
    or, if earlier, three months after termination of employment in
    most cases.(2)
    
    All options described in the above table are reflected as
    exercisable because all options granted to our executive
    officers have an early exercise feature that allows
    optionees to exercise unvested options, subject to our right to
    repurchase the unvested shares at cost upon the optionees
    termination of employment. Options unvested as of
    December 31, 2010 are as follows: Mikulsky, 136,865; Sacks,
    67,703; Layton, 43,781; and Teuthorn, 42,195.(3)
    
    This option was replaced in our 2009 option exchange program for
    an option with an exercise price per share of $2.53. As required
    by such program, the new option vests over two years beginning
    in September, 2009.(4)
    
    Each restricted stock unit vests as to 50% of the shares of
    common stock underlying it on the one year anniversary of the
    grant date, with the remainder vesting at the second anniversary
    of the grant date. The restricted stock units do not have early
    exercisability rights. Restricted Stock Units unvested as of
    December 31, 2010 are as follows: Mikulsky, 40,000; Sacks,
    16,000; Layton, 16,000; and Teuthorn, 16,000.  2010
    Option Exercises
    Compensation
    of Non-Employee Directors
    RestrictedFees Paid

Stock

TotalName

In Cash

Awards(1)

CompensationJoseph J. Lazzara

$
50,500


$
31,500


$
82,000John F. McGrath

$
45,500


$
31,500


$
77,000Wade Meyercord

$
48,000


$
31,500


$
79,500     (1)
    
    The amounts included in the Restricted Stock Unit
    Awards column represent the compensation cost related to
    restricted stock units issued in 2010. For purposes of this
    table, the value excludes the impact of estimated forfeitures.
    For a discussion of other valuation assumptions, see Note 7
    to our consolidated financial statements.   90




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##### Table of Contents



Board
    Membership Fees Payable to Non-Employee Directors
  Non-Employee Director Annual Retainer

$
25,000Board Chair Annual Retainer

$
10,000Audit Committee Chair Annual Retainer

$
16,000Audit Committee Member Annual Retainer

$
8,000Compensation Committee Chair Annual Retainer

$
8,000Compensation Committee Member Annual Retainer

$
4,000Nominating and Governance Committee Chair Annual Retainer

$
6,000Nominating and Governance Committee Member Annual Retainer

$
2,000Board Meeting Fee

$
0Committee Meeting Fee

$
0     Report of
    the Compensation
    Committee1
          1
 91




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  c/o Endwave
  Common StockName and Address

Number

Percent(2)Entities affiliated with Empire Capital Management, LLC(3)


1,336,592



13.591 Gorham Island, Suite 201
    Westport, CT 06880Entities affiliated with Wells Fargo Investments LLC(4)


615,270



6.26420 Montgomery Street
    San Francisco, CA 94104Entities affiliated with Dimensional


731,826



7.44Fund Advisors LP(5)
    1299 Ocean Avenue
    Santa Monica, CA 90401Entities affiliated with ERIP LLC


622,329



6.33104 West 27th Street, 6th Floor(6)
    New York, NY 10001Entities affiliated with Potomac Capital Management(7)


597,541



6.08825 Third Avenue
    New York, NY 10022John J. Mikulsky(8)


330,298



3.36Curt P. Sacks(9)


138,959



1.41Daniel P. Teuthorn(10)


113,167



1.15Steven F. Layton(11)


105,602



1.07Joseph J. Lazzara(12)


22,092



*John F. McGrath, Jr.(13)


21,406



*Wade Meyercord(13)


21,167



*All directors and executive officers as a group
    (7 persons)(14)


752,691



7.65     *
    
    Less than one percent.(1)
    
    This table is based upon information supplied to us by our
    officers, directors and principal stockholders and upon any
    Schedules 13D or 13G filed with the Securities and Exchange.
    Unless otherwise indicated in the footnotes to this table, and
    subject to community property laws where applicable, we believe
    that each of the stockholders named in this table has sole
    voting and investment power with respect to the shares indicated
    as beneficially owned.(2)
    
    Applicable percentages are based on 9,832,684 shares
    outstanding on January 31, 2011, adjusted as required by
    rules promulgated by the Securities and Exchange Commission.(3)
    
    Empire GP, the general partner of Empire Capital, has the power
    to direct the affairs of Empire Capital, including decisions
    respecting the disposition of the proceeds from the sale of the
    Common Stock. Empire Management, the investment manager of the
    Empire Overseas Fund has the power to direct the affairs of the
    Empire Overseas Fund, including decisions respecting the
    disposition of the proceeds from the sale of the Common Stock.
    Empire Management, pursuant to investment management agreements
    with Charter Oak, Charter Oak II and Charter Oak Master,
    has the power to dispose of the proceeds from the sale of the
    Common Stock with respect to those assets of the Charter Oak
    Funds under its discretion. Empire Management, pursuant to an
    investment management agreement with the Enhanced Master Fund,
    has the power to dispose 92




---



##### Table of Contents



of the proceeds from the sale of the Common Stock with respect
    to those assets under its discretion. Messrs. Fine and
    Richards are the Members of Empire GP and Empire Management, and
    in their capacities direct the operations of Empire GP and
    Empire Management.(4)
    
    Wells Fargo & Company is the beneficial owner of
    615,270 shares of the issuers common stock on behalf
    of Wells Fargo Investments LLC.(5)
    
    Dimensional Fund Advisors LP (formerly, Dimensional
    Fund Advisors, Inc.) (Dimensional), an
    investment advisor registered under Section 203 of the
    Investment Advisors Act of 1940, furnishes investment advice to
    four investment companies registered under the Investment
    Company Act of 1940, and serves as investment manager to certain
    other commingled group trusts and separate accounts. These
    investment companies, trusts and accounts are the
    Funds. In its role as investment advisor or manager,
    Dimensional possesses investment and/or voting power over the
    securities of the Issuer described in this schedule that are
    owned by the Funds, and may be deemed to be the beneficial owner
    of the shares of the Issuer held by the Funds. However, all
    securities reported are owned by the Funds. Dimensional
    disclaims beneficial ownership of such securities.
    Mr. Christopher Crossan, Global Chief Compliance Officer,
    is a General Partner of Dimensional Holdings Inc.(6)
    
    The shares are held by ERIP LLC and Ms. Chernaya, the
    manager of ERIP LLC. Ms. Chernaya is the beneficial owner
    of 622,329 shares of the issuers common stock and has
    the sole power to vote or to direct the vote of
    622,329 shares of the issuers common stock.(7)
    
    Potomac Capital Partners LP is a private investment partnership
    formed under the laws of the State of Delaware. Potomac Capital
    Management LLC is the General Partner of Potomac Capital
    Partners LP. Mr. Paul J. Solit is the Managing Member of
    Potomac Capital Management LLC.(8)
    
    Includes 20,000 restricted stock units releasable within
    60 days of the date of this table. Also includes
    236,393 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    119,160 shares would be subject to repurchase by us.(9)
    
    Includes 8,000 restricted stock units releasable within
    60 days of the date of this table. Also includes
    115,873 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    58,469 shares would be subject to repurchase by us.(10)
    
    Includes 8,000 restricted stock units releasable within
    60 days of the date of this table. Also includes
    75,456 shares issuable upon exercise of options exercisable
    within 60 days of the date of this table. If exercised in
    full within 60 days of the date of this table,
    35,631 shares would be subject to repurchase by us.(11)
    
    Includes 8,000 restricted stock units releasable within
    60 days of the date of this table. Also, includes
    91,821 shares issuable upon exercise of options exercisable
    within 60 days of the date of this table. If exercised in
    full within 60 days of the date of this table,
    36,689 shares would be subject to repurchase by us.(12)
    
    Includes 21,092 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. Also
    includes 1,000 shares held jointly in the name of Joseph J.
    and Nancy B. Lazzara.(13)
    
    Represents shares issuable upon exercise of options exercisable
    within 60 days of the date of this table.(14)
    
    See footnotes 8 through 13 above, as applicable. Includes
    583,208 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. If
    exercised in full within 60 days of the date of this table,
    249,949 shares would be subject to a repurchase right by us. 93




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Indemnification
    Related-Person
    Transactions Policy and Procedures
      Independence
    of the Board of Directors
     94




---



##### Table of Contents



Item 14.
    Principal
    Accounting Fees and Services    2010


2009Audit Fees(1)

$
251


$
336Audit-related Fees(2)






13Tax Fees






All Other Fees






Total

$
251


$
349     (1)
    
    Audit fees represent fees for professional services provided in
    connection with the audit of our annual consolidated financial
    statements, review of our quarterly condensed consolidated
    financial statements and services that are normally provided by
    BPM in connection with statutory and regulatory filings or
    engagements.(2)
    
    Audit-related fees consist of assurance and related services
    that are reasonably related to the performance of the audit or
    review of our consolidated financial statements and are not
    reported above under audit fees. The services provided for the
    fees disclosed under this category include due diligence and
    accounting consultations in connection with acquisitions.  Independence
    of Independent Registered Public Accounting Firm and
    Pre-Approval Policy
  case-by-case
 PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements Schedules and
    Exhibits.
                 95




---



##### Table of Contents



Intentionally omitted
  Exhibits
  INDEX TO
    EXHIBITS
  Number

Description2
.1(1)

Stock Purchase Agreement among the Registrant and the
    stockholders and option holders of ALC Microwave, Inc. dated
    April 19, 2007.2
.2(18)

Asset Purchase Agreement among the Registrant, Microsemi
    Corporation and SHR Corporation dated April 30, 2009.2
.3(18)

Indemnification Agreement between the Registrant and Microsemi
    Corporation dated April 30, 2009.2
.4(22)

Agreement and Plan of Merger, dated as of February 4, 2011,
    by and among GigOptix, Inc., the Registrant and Aerie
    Acquisition Corporation.3
.1(2)

Amended and Restated Certificate of Incorporation effective
    October 20, 2000.3
.2(3)

Certificate of Amendment of Amended and Restated Certificate of
    Incorporation effective June 28, 2002.3
.3(4)

Certificate of Designation for Series A Junior
    Participating Preferred Stock.3
.4(5)

Certificate of Designation for Series B Preferred Stock.3
.5(6)

Certificate of Amendment of Amended and Restated Certificate of
    Incorporation effective July 26, 2007.3
.6(7)

Amended and Restated Bylaws.4
.1(2)

Form of Specimen Common Stock Certificate.4
.2(4)

Rights Agreement dated as of December 1, 2005 between the
    Registrant and Computershare Trust Company, Inc.4
.3(4)

Form of Rights Certificate4
.4(8)

Amendment No. 1 to Rights Agreement, dated as of
    December 21, 2007, between the Registrant and ComputerShare
    Trust Company, Inc.4
.5(22)

Amendment No. 2 to Rights Agreement, dated as of
    February 4, 2011, by and between the Registrant and
    Computershare Trust Company, N.A., successor in interest to
    Computershare Trust Company, Inc.10
.1(2)

Form of Indemnity Agreement entered into by the Registrant with
    each of its directors and officers.10
.2(2)*

1992 Stock Option Plan.10
.3(2)*

Form of Incentive Stock Option under 1992 Stock Option Plan.10
.4(2)*

Form of Nonstatutory Stock Option under 1992 Stock Option Plan.10
.5(9)*

2007 Equity Incentive Plan.10
.6(10)*

Form of Stock Option Agreement under 2007 Equity Incentive Plan.10
.7(10)*

Form of Stock Option Agreement for Non-Employee Directors under
    the 2007 Equity Incentive Plan.10
.8(21)*

Form of Restricted Stock Unit Award under 2007 Equity Incentive
    Plan.10
.9(2)*

2000 Employee Stock Purchase Plan.10
.10(2)*

Form of 2000 Employee Stock Purchase Plan Offering.10
.11(11)*

2000 Non-Employee Directors Stock Option Plan, as amended.10
.12(2)*

Form of Nonstatutory Stock Option Agreement under the 2000
    Non-Employee Director Plan.10
.13(12)*

Description of Compensation Payable to Non-Employee Directors.10
.14(21)*

2010 Base Salaries for Named Executive Officers.10
.15(2)

License Agreement by and between TRW Inc. and TRW Milliwave Inc.
    dated February 28, 2000. 96




---



##### Table of Contents



Number

Description10
.16(14)

Purchase Agreement between Nokia and the Registrant dated
    January 1, 2006.10
.17(14)

Frame Purchase Agreement by and between the Registrant and
    Siemens Mobile Communications Spa dated January 16, 2006.10
.18(15)

Lease Agreement by and between Legacy Partners I San Jose,
    LLC and the Registrant dated May 24, 2006.10
.19(16)

Services Agreement by and between Hana Microelectronics Co.,
    Ltd. and the Registrant dated October 15, 2006.10
.20(17)

Lease Agreement by and between 8812, a California limited
    partnership, and the Registrant dated May 20, 2008.10
.21(17)

Amended and Restated Supply Agreement by and between Northrop
    Grumman Space and Mission Systems Corp. and the Registrant dated
    May 12, 2008.10
.22(13)

First Amendment, dated as of December 1, 2008, to Amended
    and Restated Supply Agreement by and between Northrop Grumman
    Space and Mission Systems Corp. and the Registrant dated
    May 12, 2008.10
.23(13)

Amendment, dated as of February 13, 2009, to Amended and
    Restated Supply Agreement by and between Northrop Grumman Space
    and Mission Systems Corp. and the Registrant dated May 12,
    2008.10
.24(19)*

Executive Officer Severance Plan.10
.25(19)*

Senior Executive Officer Severance and Retention Plan.10
.26(20)

Stock Purchase Agreement, dated as of January 21, 2010,
    between Oak Investment Partners XI, Limited Partnership and the
    Registrant.23
.1

Consent of Burr Pilger Mayer, Inc. independent registered public
    accounting firm.31
.1

Certification by Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification by Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certifications of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     (1)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on April 24, 2007 and incorporated herein by
    reference.(2)
    
    Previously filed as an exhibit to the Registrants
    Registration Statement on
    Form S-1
    (Registration
    No. 333-41302)
    and incorporated herein by reference.(3)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2004 and incorporated
    herein by reference.(4)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on December 5, 2005 and incorporated herein by
    reference.(5)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on April 26, 2006 and incorporated herein by
    reference.(6)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 and incorporated
    herein by reference.(7)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on July 28, 2008 and incorporated herein by reference.(8)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on December 28, 2007 and incorporated herein by
    reference.(9)
    
    Previously filed as an appendix to the Registrants
    Definitive Proxy Statement on Schedule 14A filed on
    June 13, 2007 and incorporated herein by reference.(10)
    
    Previously filed as an exhibit to the Registrants
    Registration Statement on
    Form S-8
    (Registration
    No. 333-144851)
    and incorporated herein by reference. 97




---



##### Table of Contents



(11)
    
    Previously filed as an exhibit to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2005 and
    incorporated herein by reference.(12)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on February 1, 2008 and incorporated herein by
    reference.(13)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    filed for the quarter year ended March 31, 2009 and
    incorporated herein by reference.(14)
    
    Previously filed as an exhibit to the Registrants
    Registration Statement on
    Form S-3
    (Registration
    No. 333-144054)
    and incorporated herein by reference.(15)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2006 and incorporated herein
    by reference.(16)
    
    Previously filed as an exhibit to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2006 and
    incorporated herein by reference.(17)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter year ended June 30, 2008 and incorporated
    herein by reference.(18)
    
    Previously filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter year ended June 30, 2009 and incorporated
    herein by reference.(19)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on September 17, 2009 and incorporated herein by
    reference.(20)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on January 21, 2010 and incorporated herein by
    reference.(21)
    
    Previously filed as an exhibit to the Registrants Annual
    Report on
    Form 10-K
    for the fiscal year ended December 31, 2009 and
    incorporated herein by reference.(22)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on February 4, 2011 and incorporated herein by
    reference.*
    
    Indicates a management contract or compensatory plan or
    arrangement.
    
    Confidential treatment has been requested for a portion of this
    exhibit.  Financial Statement Schedule
 98




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##### Table of Contents



ENDWAVE
    CORPORATION
  SCHEDULE II
  VALUATION
    AND QUALIFYING ACCOUNTS
    Additions(Reductions)Balance at


Charged to


Deductions


Balance Transferred


Balances atBeginning of


Costs and


and


Due to Sale of the


End ofPeriod


Expense


Write-offs


Business


Period(In thousands)Year ended December 31, 2010

$
19


$
(1
)

$



$



$
18Year ended December 31, 2009

$
64


$
(27
)

$



$
(18
)

$
19Year ended December 31, 2008

$
67


$
(3
)

$



$



$
64  99




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##### Table of Contents



SIGNATURES      By:
    /s/  Curt
    P. Sacks      POWER OF
    ATTORNEY
  KNOW ALL PERSONS BY THESE PRESENTS, Form 10-K,
  Signatures

Title

Date/s/  JOHN
    J. MIKULSKYJohn
    J. Mikulsky

President, Chief Executive Officer
    and Director
    (Principal Executive Officer)

February 25, 2011/s/  CURT
    P. SACKSCurt
    P. Sacks

Chief Financial Officer and  Senior Vice
    President 
    (Principal Financial and Accounting Officer)

February 25, 2011/s/  WADE
    MEYERCORDWade
    Meyercord

Chairman of the Board of Directors

February 25, 2011/s/  JOSEPH
    J. LAZZARAJoseph
    J. Lazzara

Director

February 25, 2011/s/  JOHN
    F. MCGRATH, JR.John
    F. McGrath, Jr.

Director

February 25, 2011  100