##### 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, 2008oro

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

95-4333817(State of
    incorporation)

(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-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company o(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, 2008
  TABLE OF
    CONTENTS
   
 Page No.PART IItem 1.


Business


4Item 1A.


Risk Factors


15Item 1B.


Unresolved Staff Comments


24Item 2.


Properties


25Item 3.


Legal Proceedings


25Item 4.


Submission of Matter to Vote of Security
    Holders


25PART IIItem 5.


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


25Item 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


42Item 8.


Financial Statements and Supplementary Data


43Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


75Item 9A.


Controls and Procedures


75Item 9B.


Other Information


75PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


76Item 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 Accountant Fees and Services


96PART IVItem 15.


Exhibits and Financial Statement Schedules


97SIGNATURES


101EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   2




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##### Table of Contents



FORWARD-LOOKING
    INFORMATION
   3




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##### Table of Contents



PART I  Item 1.
    Business  Introduction
          Industry
    Background and Markets
  High-Frequency
    RF Technology
  Microwave
    technology millimeter wave technology microwave
   4




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##### Table of Contents



Telecommunication
    Networks
    Cellular Telephone Backhaul.
  Carrier Class Trunking.
  Private Voice and Data Networks.
  Fixed Wireless Access Network
    Backhaul.
    Defense
    Electronics
    Electronic Warfare Systems.
  Radar Systems.
 5




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##### Table of Contents



Signal Intelligence Systems.
  Intelligent Battlefield Systems.
  High Capacity Communications.
    Homeland
    Security Systems
    Advanced Personnel Screening Portals.
  Long Distance Personnel
    Detection.
    Our
    Business Approach
    Technical Depth.
 6




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##### Table of Contents



Innovative Technology.
  Low Cost.
  Flexible Supply Chain Capabilities. and/or
    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 component performance and assembly
    process variations. This speeds the flow of work through our
    factories, reduces the required level of touch labor and
    minimizes rework.
    For many of our products, we have implemented automated assembly
    techniques that reduce labor content and enhance both product
    uniformity and quality. 7




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
    Testing is often a large part of the manufacturing effort 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, offshore manufacturers for
    even greater labor cost savings. In 2002, we began moving most
    of our high-volume commercial manufacturing to Hana
    Microelectronics Co., Ltd., (or HANA), a
    Thailand-based contract manufacturer. We consign raw materials
    to HANA, as well as provide the specialized assembly and test
    equipment needed to manufacture our products. HANA provides the
    direct labor to assemble and test our products. 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 RF modules are a major part of the overall
    manufacturing cost. We have reduced the cost of these components
    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.
    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.
    Our high unit volumes enable us to achieve lower manufacturing
    costs than many of our competitors as we increase our materials
    purchasing power, amortize our overhead expenses over a larger
    number of units and gain labor efficiencies.
    We intend to continue to improve our lean manufacturing methods
    and further enhance our manufacturing expertise. This will be
    particularly important for our high mix product lines,
    characterized by low volume and high variability, which are
    primarily manufactured in our Northern California facilities in
    support of our Defense and Security revenues.  Products
    and Technology
  Products
    Single-Function Modules.
  Multi-Function Modules.
  Integrated Subsystem Modules.
 8




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Circuit
    Technologies
    HMIC (Hybrid Microwave Integrated
    Circuit).
  MMIC (Monolithic Microwave Integrated
    Circuit).
  MLMS (Multi-Lithic Micro System).
  Circuit
    Packaging Technologies
    Standard Planar Packaging.
  Epsilon Packaging.
  Sales and
    Marketing
   9




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##### Table of Contents



Customers
    Acquisitions
    Acquisition

Structure

Key BenefitsALC Microwave, Inc.  April 2007

Purchased all of the outstanding capital stock of privately-held
    ALC Microwave, Inc. whose primary product line was logarithmic
    amplifiers and subsystems sold to defense markets.

 Provided a significant market position in specialized logarithmic amplifiers.
 Expanded relationships with existing customers and added new customers.JCA Technology, Inc., a wholly-owned subsidiary of New Focus,
    Inc., a subsidiary of Bookham Technology plc  July
    2004

Purchased all of the outstanding capital stock of JCA, whose
    primary product line was microwave amplifiers serving the
    defense electronics industry

 Provided significant market position in RF amplifiers and modules for defense and related applications

 Expanded relationships with existing customers and add new customers

 Formed core of Endwave Defense Systems divisionVerticom, Inc.  May 2003

Purchased assets including customer contracts, equipment,
    inventory, product designs and other intellectual property
    required to manufacture and supply YIG-based frequency
    synthesizers

 Enhanced high-performance oscillator technology

 Added new customer relationship in the defense electronics market

 Added new product application in the defense communication satellite terminal marketArcom Wireless Incorporated, a subsidiary of Dover Corporation
     February 2003

Purchased assets including customer contracts, equipment,
    inventory, product designs and other intellectual property
    required to manufacture and supply a 58 GHz integrated
    transceiver

 Expanded relationship with an existing customer

 Enhanced market position as a leading supplier of 58 GHz products 10




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##### Table of Contents



Acquisition

Structure

Key BenefitsSignal Technology Corp. Fixed Wireless Division 
    September 2002

Purchased assets including customer contracts, equipment,
    inventory, product designs and other intellectual property
    required to manufacture and supply several transceiver products

 Expanded relationships with existing customers including Stratex Networks, Inc. and Nera ASA

 Added new customers including Siemens AG and Ceragon Networks Ltd.

 Significantly increased our product portfolio

 Facilitated move to offshore productionM/A-Com Tech, Inc., a subsidiary of Tyco Electronics formerly
    known as Stellex Microwave Systems  April 2001

Purchased assets including customer contracts, equipment,
    inventory, product designs and other intellectual property
    required to manufacture and supply yttrium iron garnet-based
    frequency synthesizers

 Added new product capabilities in high performance oscillators

 Added new customer relationship with Stratex Networks, Inc.

 Added new application in high capacity microwave radios   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
   11




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Custom Semiconductor Design Capabilities.
  Breadth of Expertise.
  Computer Modeling Capabilities.
  Extensive Library of Circuit Designs.
  Automated Testing Processes.
    Patents
    and Intellectual Property Rights
       12




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Operations
        9001-2000,
  work-in-process
  Backlog
   13




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Governmental
    Regulation
      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
 14




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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 Our Business
  We
    have had a history of losses and may not be profitable in the
    future.
    The
    current turmoil in the global economy could adversely impact our
    operations and financial results.
    We
    depend on a small number of key customers in the
    telecommunications industry for a significant portion of our
    revenues. If we lose any of our major customers, particularly
    Nokia Siemens Networks, 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.
    Our
    operating results may be adversely affected by substantial
    quarterly and annual fluctuations and market
    downturns.
   15




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We
    depend on the telecommunications industry for a substantial
    portion of our revenues. As this industry is negatively impacted
    by the global economic downturn, our revenues could decrease and
    our profitability could suffer. In addition, consolidation in
    this industry could result in delays or cancellations of orders
    for our products, adversely impacting our results of
    operations.
        Implementing
    our acquisition strategy could result in dilution to our
    stockholders and operating difficulties leading to a decline in
    revenues and operating profit.
    
    diversion of our management from the operation of our core
    business;
    assimilating the acquired operations and personnel;
    integrating information technology and reporting systems;
    retention of key personnel;
    retention of acquired customers; and
    implementation of controls, procedures and policies in the
    acquired business.    Our
    strategy depends in part on our ability to further penetrate
    into new non-telecommunication markets, such as defense
    electronics, homeland security and other systems, and we may be
    unable to do so.
   16




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We
    rely on the semiconductor foundry operations of third-party
    semiconductor foundries to manufacture the semiconductors
    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.
      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-controlled oscillators;
    voltage regulators;
    unusual or low usage components;
    surface mount components compliant with the EUs
    Restriction of Hazardous Substances, or RoHS, Directive;
    high-frequency circuit boards;
    custom connectors; and
    yttrium iron garnet components.   17




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We are
    exposed to fluctuations in the market values of our investment
    portfolio.
    Competitive
    conditions often require us to reduce prices and, as a result,
    we need to reduce our costs in order to be
    profitable.
  per-unit
  We
    rely heavily on a Thailand facility of HANA Microelectronics
    Co., Ltd., a contract manufacturer, to produce our RF modules.
    If HANA is unable to produce these modules 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.
    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.
   18




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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 a
    high-frequency RF module 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 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 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;
    labor disputes;
    transportation disruptions;
    changes in import/export regulations;
    infrastructure failures at the facilities of our offshore
    contract manufacturer;
    natural disasters;
    acts of terrorism; and
    political instability.     20




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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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Risks
    Relating to Our Industry
  Our
    revenues in the defense electronics and homeland security
    markets largely depend upon the funding and implementation
    decisions of the United States Government. These decisions could
    change abruptly and without notice, unexpectedly reducing our
    revenues from these markets.
    Our
    failure to compete effectively could reduce our revenues and
    margins.
      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.
   22




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##### Table of Contents



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.
    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.
    
    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 trends or changes in
    telecommunication and non-telecommunication networks;
    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 participants in the communications industry
    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;
    existence of preferred stock with rights differing from those of
    common stock; and
    the low trading volume of our common stock.   23




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##### Table of Contents



We
    have a few shareholders 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, arrangements with
    executive officers and the rights of our preferred shareholder
    contain provisions that could delay or prevent a change in
    control.
  2 3
  and/or
    Item 1B.
    Unresolved
    Staff Comments   24




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Item 2.
    Properties          Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   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, 2007First Quarter

$
13.75


$
10.50Second Quarter

$
12.86


$
9.50Third Quarter

$
12.09


$
8.25Fourth Quarter

$
10.49


$
5.40Fiscal Year Ended December 31, 2008First Quarter

$
7.69


$
5.56Second Quarter

$
7.53


$
5.38Third Quarter

$
7.00


$
4.77Fourth Quarter

$
5.49


$
1.93    25




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##### Table of Contents



Dividend
    Policy
    Equity
    Compensation Plan Information
    Number ofSecuritiesRemainingAvailableNumber of


Weighted-


for IssuanceSecurities to be


Average


Under EquityIssued Upon


Exercise


CompensationExercise of


Price of


PlansOutstanding


Outstanding


(ExcludingOptions,


Options,


SecuritiesWarrants and


Warrants and


Reflected inPlan Category

Rights (a)


Rights (b)


Column (a))(1)(c)Equity compensation plans approved by security holders


3,008,917


$
9.23



2,243,497
(2)Equity compensation plans not approved by security holders


0



0



0Total


3,008,917


$
9.23



2,243,497     (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 (assuming conversion
    of all outstanding shares of preferred stock) 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 360,369 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
  
  12/03


12/04


12/05


12/06


12/07


12/08Endwave Corporation



100.00




237.09




160.05




147.15




98.78




32.61NASDAQ Composite



100.00




110.06




112.92




126.61




138.33




80.65NASDAQ Telecommunications



100.00




106.63




103.01




131.04




135.00




78.26   *
    
    $100 invested on 12/31/03 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, 2008, 2007 and 2006 and the selected
    consolidated balance sheet data as of December 31, 2008 and
    2007 are derived from the 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, 2005 and 2004 and the
    selected consolidated balance sheet data as of December 31,
    2006, 2005 and 2004 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 31,2008


2007


2006


2005


2004(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues

$
58,255


$
56,476


$
62,226


$
48,735


$
33,162Cost of product revenues


42,091



41,764



44,220



33,586



22,576Impairment of goodwill and intangible assets


6,161















Other operating expenses


26,068



23,701



21,901



16,799



16,115Loss from operations


(16,065
)


(8,989
)


(3,895
)


(1,650
)


(5,529
)Net loss

$
(14,751
)

$
(5,401
)

$
(1,344
)

$
(874
)

$
(4,404
)Basic and diluted net loss per share

$
(1.60
)

$
(0.47
)

$
(0.12
)

$
(0.08
)

$
(0.45
)   December 31,2008


2007


2006


2005


2004(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term and long-term investments

$
45,348


$
48,957


$
67,587


$
22,415


$
25,137Total assets


70,340



82,589



100,653



53,149



50,094Long-term obligations, less current portion


73



116



231



385



559Total stockholders equity


62,041



71,848



89,398



43,083



39,064   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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Markets
    and Diversification Strategy
  Telecommunications market.
    Non-telecommunication markets.
    Current market outlook.
    Seasonality
   29




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Critical
    Accounting Policies and Estimates
  General
    Revenue
    Recognition
    Allowance
    for Doubtful Accounts
    Warranty
    Reserves
    Inventory
    Valuation
   30




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Stock-Based
    Compensation
        Deferred
    Taxes
    Long-Lived
    Assets
     31




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Goodwill
    and Intangible Assets with an Indefinite Life
      Fair
    Value Measurement
      Business
    Combinations
   32




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,2008


2007


2006(In thousands)Revenues:Product revenues

$
57,559


$
55,611


$
60,956Development fees


696



865



1,270Total revenues


58,255



56,476



62,226Costs and expenses:Cost of product revenues


41,495



41,216



43,771Cost of product revenues, amortization of intangible assets


596



548



449Research and development


11,878



10,707



8,856Selling, general and administrative


13,474



12,463



12,689Transaction costs










200Amortization of intangible assets


716



531



156Impairment of goodwill and intangible assets


6,161







Total costs and expenses


74,320



65,465



66,121Loss from operations


(16,065
)


(8,989
)


(3,895
)Interest and other income, net


1,248



3,590



2,648Loss before provision for income tax expense (benefit)


(14,817
)


(5,399
)


(1,247
)Income tax expense (benefit)


(66
)


2



97Net loss

$
(14,751
)

$
(5,401
)

$
(1,344
)   33




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##### Table of Contents



Year Ended December 31,2008


2007


2006(As a percentage of total revenues)Revenues:Product revenues


98.8
%


98.5
%


98.0
%Development fees


1.2



1.5



2.0Total revenues


100.0



100.0



100.0Costs and expenses:Cost of product revenues


71.2



73.0



70.3Cost of product revenues, amortization of intangible assets


1.0



1.0



0.7Research and development


20.4



19.0



14.2Selling, general and administrative


23.1



22.1



20.4Transaction costs










0.3Amortization of intangible assets


1.2



0.9



0.3Impairment of goodwill and intangible assets


10.6







Total costs and expenses


127.5



116.0



106.3Loss from operations


(27.5
)


(16.0
)


(6.3
)Interest and other income, net


2.1



6.4



4.3Loss before provision for income tax expense (benefit)


(25.4
)


(9.6
)


(2.0
)Income tax expense (benefit)


(0.1
)






0.2Net loss


(25.3
)%


(9.6
)%


(2.2
)%   Results
    of Operations
  Year
    ended December 31, 2008 compared to year ended
    December 31, 2007
  Total
    revenues
  Year Ended December 31,2008


2007


% Change(In thousands)Total revenues

$
58,255


$
56,476



3.2
%Product revenues

$
57,559


$
55,611



3.5
%Development fees

$
696


$
865



(19.5
)%      34




---



##### Table of Contents



Cost of
    product revenues
  Year Ended December 31,2008


2007


% Change(In thousands)Cost of product revenues

$
41,495


$
41,216



0.7
%Percentage of revenues


71.2
%


73.0
%         Research
    and development expenses
  Year Ended December 31,2008


2007


% Change(In thousands)Research and development expenses

$
11,878


$
10,707



10.9
%Percentage of revenues


20.4
%


19.0
%         Selling,
    general and administrative expenses
  Year Ended December 31,2008


2007


% Change(In thousands)Selling, general and administrative expenses

$
13,474


$
12,463



8.1
%Percentage of revenues


23.1
%


22.1
%  35




---



##### Table of Contents



Amortization
    of intangible assets
  Year Ended December 31,2008


2007


% Change(In thousands)Cost of product revenues, amortization of intangible assets

$
596


$
548



8.8
%Amortization of intangible assets

$
716


$
531



34.8
%           Impairment
    of goodwill and intangible assets
  Year Ended December 31,2008


2007


% Change(In thousands)Impairment of goodwill and intangible assets

$
6,161


$




100.0
%    36




---



##### Table of Contents



Interest
    and other income, net
  Year Ended December 31,2008


2007


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

$
1,248


$
3,590



(65.2
)%         Income
    tax expense (benefit)
  Year Ended December 31,2008


2007


% Change(In thousands)Income tax expense (benefit)

$
(66
)

$
2



3,400
%    37




---



##### Table of Contents



Year
    ended December 31, 2007 compared to year ended
    December 31, 2006
  Total
    revenues
  Year Ended December 31,2007


2006


% Change(In thousands)Total revenues

$
56,476


$
62,226



(9.2
)%Product revenues

$
55,611


$
60,956



(8.8
)%Development fees

$
865


$
1,270



(31.9
)%       Cost of
    product revenues
  Year Ended December 31,2007


2006


% Change(In thousands)Cost of product revenues

$
41,216


$
43,771



(5.8
)%Percentage of revenues


73.0
%


70.3
%     Research
    and development expenses
  Year Ended December 31,2007


2006


% Change(In thousands)Research and development expenses

$
10,707


$
8,856



20.9
%Percentage of revenues


19.0
%


14.2
%    38




---



##### Table of Contents



Selling,
    general and administrative expenses
  Year Ended December 31,2007


2006


% Change(In thousands)Selling, general and administrative expenses

$
12,463


$
12,689



(1.8
)%Percentage of revenues


22.1
%


20.4
%     Transaction
    costs
  Year Ended December 31,2007


2006


% Change(In thousands)Transaction costs

$



$
200



(100
)%     Amortization
    of intangible assets
  Year Ended December 31,2007


2006


% Change(In thousands)Cost of product revenues, amortization of intangible assets

$
548


$
449



22.0
%Amortization of intangible assets

$
531


$
156



240.4
%       Interest
    and other income, net
  Year Ended December 31,2007


2006


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

$
3,590


$
2,648



35.6
%    39




---



##### Table of Contents



Liquidity
    and Capital Resources
    Year Ended December 31,2008


2007


2006(In thousands)Net cash provided by (used in) operating activities

$
(153
)

$
3,921


$
2,776Net cash provided by (used in) investing activities


(5,270
)


24,860



(29,343
)Net cash provided by (used in) financing activities


417



(15,953
)


44,287Cash, cash equivalents, restricted cash, short-term and
    long-term investments at end of period

$
45,948


$
48,982


$
67,848                40




---



##### 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

$
43


$
23


$
20


$



$
Operating lease obligations


4,389



1,035



1,860



1,263



231Purchase obligations


3,676



3,676











Total

$
8,108


$
4,734


$
1,880


$
1,263


$
231     Other
    Long-Term Liabilities
    Recent
    Accounting Pronouncements
      No. FAS 157-2, FSP 157-2, FSP 157-2
 41




---



##### Table of Contents



FSP 157-2
  EITF 03-6-1, EITF 03-6-1. EITF 03-6-1 EITF 03-6-1. EITF 03-6-1 EITF 03-6-1
    No. FAS 157-3, FSP 157-3. FSP 157-3 FSP 157-3
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Quantitative
    and Qualitative Disclosures about Market Risk
     42




---



##### 



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


44Consolidated Balance Sheets


45Consolidated Statements of Operations


46Consolidated Statements of Stockholders
    Equity


47Consolidated Statements of Cash Flows


48Notes to Consolidated Financial Statements


49   43




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           
    44




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2008


2007(In thousands, except share and per share data)ASSETSCurrent assets:Cash and cash equivalents

$
33,998


$
38,992Short-term investments


11,350



5,464Accounts receivable, net of allowance for doubtful accounts of
    $64 in 2008 and $67 in 2007


4,762



9,362Inventories


14,454



12,434Other current assets


738



1,168Total current assets


65,302



67,420Long-term investments






4,501Property and equipment, net


4,220



2,999Other assets


218



212Restricted cash


600



25Goodwill and intangible assets, net






7,432Total assets

$
70,340


$
82,589LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,263


$
3,422Accrued warranty


2,439



2,712Accrued compensation


2,811



2,240Other current liabilities


713



2,251Total current liabilities


8,226



10,625Other long-term liabilities


73



116Total liabilities


8,299



10,741Commitments and contingencies (Note 10)Stockholders equity:Convertible preferred stock, $0.001 par value;
    5,000,000 shares authorized; 300,000 shares issued and
    outstanding in 2008 and 2007, respectively






Common stock, $0.001 par value; 50,000,000 shares
    authorized; 9,345,442 and 9,174,622 shares issued and
    outstanding in 2008 and 2007, respectively


9



9Additional paid-in capital


349,855



345,038Treasury stock, at cost, 39,150 shares at December 31,
    2007






(79
)Accumulated other comprehensive gain (loss)


42



(6
)Accumulated deficit


(287,865
)


(273,114
)Total stockholders equity


62,041



71,848Total liabilities and stockholders equity

$
70,340


$
82,589    45




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2008


2007


2006(In thousands, except share and per share data)Revenues:Product revenues

$
57,559


$
55,611


$
60,956Development fees


696



865



1,270Total revenues


58,255



56,476



62,226Costs and expenses:Cost of product revenues*


41,495



41,216



43,771Cost of product revenues, amortization of intangible assets


596



548



449Research and development*


11,878



10,707



8,856Selling, general and administrative*


13,474



12,463



12,689Transaction costs










200Amortization of intangible assets


716



531



156Impairment of goodwill and intangible assets


6,161







Total costs and expenses


74,320



65,465



66,121Loss from operations


(16,065
)


(8,989
)


(3,895
)Interest and other income, net


1,248



3,590



2,648Loss before income tax expense (benefit)


(14,817
)


(5,399
)


(1,247
)Income tax expense (benefit)


(66
)


2



97Net loss

$
(14,751
)

$
(5,401
)

$
(1,344
)Basic and diluted net loss per share

$
(1.60
)

$
(0.47
)

$
(0.12
)Shares used in computing basic and diluted net loss per share


9,211,110



11,563,716



11,429,860* Includes the following amounts related to stock-based
    compensation:Cost of product revenues

$
732


$
661


$
435Research and development


930



845



540Selling, general and administrative


2,433



2,608



2,337    46




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  AccumulatedShares of





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, 2005





$




11,358,816


$
11


$
309,583


$
(79
)

$
(63
)

$
(266,369
)

$
43,083Change in unrealized gain on short-term investments


























38







38Net loss






























(1,344
)


(1,344
)Comprehensive loss


































(1,306
)Exercise of stock options










120,395



1



428















429Issuance of common stock under employee stock purchase plan










77,735







751















751Stock-based compensation


















3,321















3,321Tax benefit from employee stock transactions


















13















13Issuance of preferred stock and warrant, net of issuance costs
    of $1,927


300,000















43,107















43,107Balance as of December 31, 2006


300,000







11,556,946



12



357,203



(79
)


(25
)


(267,713
)


89,398Change in unrealized gain on short-term investments


























31







31Foreign currency translation adjustment


























(12
)






(12
)Net loss






























(5,401
)


(5,401
)Comprehensive loss


































(5,382
)Exercise of stock options










24,685







145















145Repurchase and retirement of common stock






.



(2,504,847
)


(3
)


(17,202
)














(17,205
)Issuance of common stock under employee stock purchase plan










97,838







766















766Stock-based compensation


















4,141















4,141Issuance costs from the sale of preferred stock and warrants


















(15
)














(15
)Balance as of December 31, 2007


300,000







9,174,622



9



345,038



(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


$




9,345,442


$
9


$
349,855


$



$
42


$
(287,865
)

$
62,041    47




---



##### Table of Contents



ENDWAVE
    CORPORATION
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2008


2007


2006(In thousands)Operating activities:Net loss

$
(14,751
)

$
(5,401
)

$
(1,344
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation


1,201



970



858Stock compensation expense


4,095



4,114



3,312Tax benefit from employee stock transactions










13Amortization of intangible assets


1,312



1,079



605Amortization of investments


(43
)


1



55Loss (gain) on the sale of land and equipment


(3
)


4



77Gain on sale of investments


(57
)






Impairment of goodwill and intangible assets


6,161







Changes in operating assets and liabilities:Accounts receivable


4,600



67



1,774Inventories


(2,015
)


5,841



(3,670
)Other assets


424



(355
)


(93
)Accounts payable


(1,159
)


(939
)


1,326Accrued warranty


(273
)


(374
)


(329
)Accrued compensation, restructuring and other current and long
    term liabilities


355



(1,086
)


192Net cash provided by (used in) operating activities


(153
)


3,921



2,776Investing activities:Cash paid in business combinations


(1,027
)


(5,771
)


Purchases of property and equipment


(2,493
)


(1,092
)


(1,650
)Proceeds from sale of property and equipment


74



11



12Change in restricted cash


(575
)


236



(236
)Purchases of investments


(19,731
)


(57,756
)


(36,319
)Proceeds on sales and maturities of investments


18,482



89,232



8,850Net cash provided by (used in) investing activities


(5,270
)


24,860



(29,343
)Financing activities:Proceeds from the sale of Series B preferred stock and
    warrants, net of issuance costs






(15
)


43,107Common stock repurchased


(356
)


(16,849
)


Payments on capital leases


(23
)






Proceeds from exercises of stock options


5



145



429Proceeds from issuance of common stock


791



766



751Net cash provided by (used in) financing activities


417



(15,953
)


44,287Effect of foreign exchange rate changes on cash and cash
    equivalents


12



(12
)


Net change in cash and cash equivalents


(4,994
)


12,816



17,720Cash and cash equivalents at beginning of year


38,992



26,176



8,456Cash and cash equivalents at end of year

$
33,998


$
38,992


$
26,176Supplemental disclosure of cash flow information:Non-cash transactions:Fixed assets acquired under capital lease

$



$
66


$
Change in unrealized gain (loss) on investments

$
36


$
31


$
38Capitalized stock-based compensation

$
5


$
27


$
9    48




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    The
    Company    
    integrated transceivers combinations of
    electronic devices that combine both the transmit and receive
    functions necessary for a bi-directional radio link;
    amplifiers electronic devices used to
    increase the amplitude and power of an electronic signal;
    synthesizers electronic devices that can be
    used to generate several different radio frequency signals from
    a single source;
    oscillators electronic devices that generate
    radio frequency signals at a fixed frequency;
    up and down converters electronic devices
    that shift the center frequency of a radio signal without
    altering the signals data modulation;
    frequency multipliers electronic devices that
    increase the frequency of a radio signal in integer
    multiples; and
    microwave switch arrays electronic devices
    that can switch the routing of a radio signal.  2.
    Summary
    of Significant Accounting Policies  Basis
    of Consolidation
    Use of
    Estimates
    Revenue
    Recognition
   49




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Warranty
      2008


2007(In thousands)Balance at January 1

$
2,712


$
2,928Warranties accrued


793



816Warranties settled or reversed


(1,066
)


(1,032
)Balance at December 31

$
2,439


$
2,712   Allowance
    for Doubtful Accounts
    Cash
    Equivalents and Short-Term Investments
      Restricted
    Cash
   50




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      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
       51




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Income
    Taxes
      Stock-Based
    Compensation
      No. D-32
 52




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 96-18,
  Research
    and Development Expenses
    Concentration
    of Risk
             53




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Fair
    Value of Financial Instruments
      December 31, 2008Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Investments:Commercial paper

$
1,791


$
2


$
(3
)

$
1,790United States government agency


6,690



35







6,725Corporate securities


2,827



10



(2
)


2,835Total

$
11,308


$
47


$
(5
)

$
11,350  54




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2007Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Cash equivalents:Commercial paper

$
7,195


$



$



$
7,195Investments:United States government agency

$
1,496


$
4


$



$
1,500Corporate securities


8,463



8



(6
)


8,465Total

$
9,959


$
12


$
(6
)

$
9,965         Fair
    Value Measurements
   55




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Quoted Prices inActive Markets of


Significant OtherBalance as of


Identical Assets


Observable InputsDecember 31, 2008


(Level 1)


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

$
33,670


$
33,670


$
Short-term investments:Commercial paper


1,790







1,790United States government agency


6,725







6,725Corporate securities


2,835







2,835Total

$
45,020


$
33,670


$
11,350Liabilities:

$



$



$
       Foreign
    Currency Transactions
  non-U.S. currencies, non-U.S. currencies non-U.S. currencies
  Comprehensive
    Loss
   56




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2008


2007Accumulated other comprehensive gain (loss):Foreign currency translation adjustments

$



$
(12
)Unrealized gain on investments


42



6Total

$
42


$
(6
)   Net
    Loss Per Share
          Advertising
    Costs
    Recent
    Accounting Pronouncements
   57




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. FAS 157-2 (FAS 157-2), FSP 157-2 FSP 157-2
  EITF 03-6-1 EITF 03-6-1), EITF 03-6-1. EITF 03-6-1 EITF 03-6-1
    No. FAS 157-3, FSP 157-3. FSP 157-3 FSP 157-3
  3.
    Goodwill
    and Other Intangible Assets  Goodwill
   58




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Intangible
    Assets
            December 31,2008Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountDeveloped technology

$
3,130


$
(3130
)

$
Tradename


1,290



(1,290
)


Customer relationships


1,680



(1,680
)


Customer backlog


700



(700
)


Non-compete agreement


370



(370
)


Total intangible assets

$
7,170


$
(7,170
)

$
   December 31, 2007Gross





NetCarrying


Accumulated


CarryingAmount


Amortization


AmountDeveloped technology

$
3,130


$
(1,636
)

$
1,494Tradename


1,290



(27
)


1,263Customer relationships


1,680



(633
)


1,047Customer backlog


700



(327
)


373Non-compete agreement


370



(61
)


309Total intangible assets

$
7,170


$
(2,684
)

$
4,486  59




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    4.
    Inventories    2008


2007Raw materials

$
8,452


$
9,630Work in process


1,574



1,365Finished goods


4,428



1,439Total

$
14,454


$
12,434   5.
    Note
    Receivable        6.
    Property
    and Equipment    2008


2007Machinery and equipment

$
14,591


$
13,048Software


1,038



941Leasehold improvements


1,225



52216,854



14,511Less accumulated depreciation


(12,634
)


(11,512
)Property and equipment, net

$
4,220


$
2,999    60




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        7.
    Segment
    Disclosures    2008


2007


2006United States

$
14,990



25.7
%

$
10,387



18.4
%

$
9,812



15.8
%Finland


31,266



53.7
%


29,573



52.4
%


26,332



42.3
%Italy


847



1.5
%


4,091



7.2
%


14,074



22.6
%Norway


111



0.2
%


3,793



6.7
%


7,777



12.5
%Singapore


4,178



7.2
%


704



1.3
%


857



1.4
%Slovakia


3,288



5.6
%


4,129



7.3
%






0.0
%Rest of the world


3,575



6.1
%


3,799



6.7
%


3,374



5.4
%Total

$
58,255



100.0
%

$
56,476



100.0
%

$
62,226



100.0
%       8.
    Stock-Based
    Compensation  Stock
    Option Exchange
   61




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Stock
    Based Compensation
      Year Ended December 31,2008


2007


2006Stock-based compensation expense by type of award:Employee stock options

$
3,434


$
3,653


$
2,900Employee stock purchase plan


666



488



421Amounts capitalized into inventory during the year


(65
)


(60
)


(26
)Amounts capitalized as inventory and expensed


60



33



17Total stock-based compensation


4,095



4,114



3,312Tax effect on stock-based compensation










Total stock-based compensation expense

$
4,095


$
4,114


$
3,312Impact on basic and diluted net loss per share

$
(0.44
)

$
(0.36
)

$
(0.29
)      62




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Valuation
    Assumptions
    Year Ended December 31,2008

2007

2006Stock Option PlansExpected dividend yield

0.0%

0.0%

0.0%Expected stock price volatility

70%

70%

79%Risk free interest rate

1.80 - 3.39%

3.77 - 4.80%

4.52 - 5.45%Expected life of options in years

3.6 years

4 years

5 years     Year Ended December 31,2008

2007

2006Employee Stock Purchase PlanExpected dividend yield

0.0%

0.0%

0.0%Expected stock price volatility

51%

51%

51%Risk free interest rate

1.61 - 4.74%

3.97 - 4.67%

4.74 - 5.15%Expected life of options in years

1.1 - 1.2 years

1.2 years

1.3 years      63




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    9.
    Stockholders
    Equity  Preferred
    Stock and Warrant Purchase Agreement
            No. 00-27, No. 98-5
   64




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
    Common
    Stock
        Shareholder
    Rights Plan
     65




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Employee
    Stock Purchase Plan
    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, 2005


1,292,877



14.19Options granted


608,300



10.25Options exercised


(120,395
)


3.55Options cancelled


(48,113
)


12.63Outstanding at December 31, 2006


1,732,669



13.59Options granted


796,150



12.10Options exercised


(24,685
)


5.88Options cancelled


(38,698
)


13.46Outstanding 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


$
9.23



7.63


$
123,240Options vested and exercisable and expected to be exercisable at
    December 31, 2008


2,746,911


$
9.33



7.52


$
123,240Options vested and exercisable at December 31, 2008


1,585,385


$
9.77



6.75


$
123,240    67




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Vested andExercisableAt December 31,Options Outstanding at December 31, 2008


2008Weighted-Weighted-


Average





Weighted-Average


Remaining





AverageRange of Exercise Price

Shares


Exercise Price


Contractual Life


Shares


Exercise Price$ 0.76 - $ 6.37


292,134


$
3.30



6.36



202,424


$
2.54$ 6.59 - $ 6.59


892,670


$
6.59



9.09



167,870


$
6.59$ 6.60 - $ 9.75


199,160


$
9.07



7.21



129,672


$
9.09$ 9.77 - $ 9.77


328,259


$
9.77



7.08



224,335


$
9.77$ 9.90 - $10.22


441,328


$
10.11



6.28



352,345


$
10.16$10.23 - $12.90


227,155


$
11.97



6.91



170,930


$
11.93$13.23 - $13.23


510,436


$
13.23



8.09



224,985


$
13.23$15.14 - $19.30


113,622


$
16.65



6.32



108,671


$
16.64$20.32 - $20.32


124


$
20.32



1.22



124


$
20.32$21.47 - $21.47


4,029


$
21.47



6.09



4,029


$
21.473,008,917


$
9.23



7.63



1,585,385


$
9.77     10.
    Commitments
    and Contingencies  Commitments
      Years Ending December 31,2009

$
1,0352010


9892011


8712012


6252013


638Thereafter


231Total

$
4,389  68




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##### Table of Contents



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

$
232010


172011


343Less amount representing interest


4Present value of future minimum lease payments


39Less current portion


20Long-term portion

$
19     Purchase
    Obligations
    Contingencies
   69




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Income
    Taxes  non-U.S. loss non-U.S. income
  Years Ended December 31,2008


2007


2006Current income tax expense (benefit):Federal

$
(57
)

$



$
90State


(9
)


2



7$
(66
)

$
2


$
97Deferred income tax expense (benefit):Federal

$



$



$
State










$



$



$
           2008


2007Deferred tax assets:Net operating loss carryforwards

$
72,666


$
70,800Net research credit


1,650



1,800Other


8,181



6,800Total deferred tax assets


82,497



79,400Valuation allowance for deferred tax assets


(82,497
)


(78,600
)Deferred tax assets






800Deferred tax liabilities:Intangible assets






(800
)Net deferred tax assets (liabilities)

$



$
  70




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2008


2007


2006(In thousands)Benefit from income taxes at statutory rate

$
(5,186
)

$
(1,883
)

$
(437
)State taxes


(9
)


2



7Losses for which no benefit is taken


3,757



1,583



70Alternative minimum tax










90Non-deductible stock compensation


295



272



337Goodwill impairment


1,045







Other


32



28



30Total

$
(66
)

$
2


$
97       2008 Total(In thousands)Balance at January 1

$
2,617Increases related to current year tax positions


54Increases related to prior year tax positions


37Balance at December 31

$
2,708   and/or and/or
   71




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12.  401(k)
    Plan
    13.
    Business
    Combinations           72




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Tangible assets acquired

$
3,092Liabilities assumed


(473
)Core/developed technology


880Tradename


230Customer relationships


900Customer backlog


560Non-compete agreement


370Goodwill


1,380Total purchase price

$
6,939       Pro
    forma financial information
    Years Ended December 31,2007


2006Total revenues

$
57,731


$
67,750Net loss


(5,273
)


(1,269
)Net loss per share  basic and diluted


(0.46
)


(0.11
)    73




---



##### 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)2008:Total revenues

$
14,181


$
17,280


$
16,979


$
9,815Cost of product revenues


10,192



11,837



11,947



8,115Net loss(1)


(1,936
)


(760
)


(999
)


(11,056
)Basic and diluted net loss per share(1)

$
(0.21
)

$
(0.08
)

$
(0.11
)

$
(1.19
)2007:Total revenues

$
14,751


$
13,539


$
13,794


$
14,392Cost of product revenues


10,733



10,345



10,089



10,597Net loss


(780
)


(1,907
)


(1,655
)


(1,059
)Basic and diluted net loss per share

$
(0.07
)

$
(0.16
)

$
(0.14
)

$
(0.09
)     (1)
    
    During the fourth quarter of 2008, the Company determined that
    its goodwill and intangible assets were impaired and recorded a
    charge of $6.2 million or ($0.67) per share to write off
    the remaining value of its goodwill and intangible assets.  15.
    Subsequent
    Events   74




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##### 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   75




---



##### Table of Contents



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

Age

PositionEdward A. Keible, Jr.


65


Chief Executive Officer, President and DirectorJohn J. Mikulsky


63


Chief Operating Officer and Executive Vice PresidentBrett W. Wallace


44


Chief Financial Officer, Executive Vice President and SecretaryDavid M. Hall


60


Senior Vice President and General Manager, Defense and SecuritySteven F. Layton


54


Senior Vice President and General Manager, TelecomDaniel P. Teuthorn


45


Senior Vice President and General Manager, TechnologyEdward C.V. Winn(1)(2)(3)


70


Chairman of the Board of DirectorsJoseph J. Lazzara(1)(2)(3)


57


DirectorJohn F. McGrath, Jr.(1)


44


DirectorWade Meyercord(2)(3)


68


DirectorEric Stonestrom(2)(3)


47


Director     (1)
    
    Member of the Audit Committee(2)
    
    Member of the Nominating and Governance Committee(3)
    
    Member of the Compensation Committee  Edward A. Keible, Jr.
  John J. Mikulsky
  Brett W. Wallace
  David M. Hall
 76




---



##### Table of Contents



start-up
  Steven F. Layton
  Daniel P. Teuthorn
  Edward C.V. Winn
  Joseph J. Lazzara
 77




---



##### Table of Contents



John F. McGrath, Jr.
  Wade Meyercord e-commerce and/or
  Eric D. Stonestrom
      Section 16(a)
    Beneficial Ownership Reporting Compliance
   78




---



##### Table of Contents



Committees
    of the Board of Directors
    Audit
    Committee
      Compensation
    Committee
   79




---



##### Table of Contents




    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.    
    the amount of 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, if any, to be awarded to each executive officer.  Nominating
    and Governance Committee
   80




---



##### Table of Contents



Code of
    Business Conduct and Ethics
     
  Item 11.
    Executive
    Compensation  COMPENSATION
    OF EXECUTIVE OFFICERS
  COMPENSATION
    DISCUSSION AND ANALYSIS
  Overview
    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. 81




---



##### Table of Contents




    The amount of 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, if any, to be awarded to each executive officer.    Comparable
    Company Comparisons
      Elements
    of Executive Compensation
   82




---



##### Table of Contents



Base Salary:
  Annual Cash Incentive:
        Stock Options:
 83




---



##### Table of Contents



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
    2008 Severance and Retention Benefits Assuming No Change of
    Control
    COBRA


Option


TotalName

Salary(1)


Benefits(2)


Awards(3)


BenefitEdward A. Keible, Jr.

$
900,667


$
31,769


$
0


$
932,436John J. Mikulsky

$
423,000


$
29,269


$
0


$
452,269Brett W. Wallace

$
188,250


$
14,635


$
0


$
202,885     (1)
    
    Reflects 2 months salary for each full year of employment
    for Mr. Keible (28 months total), 1.5 months
    salary for each full year of employment for Mr. Mikulsky
    (18 months total) and 9 months salary for
    Mr. Wallace.(2)
    
    Reflects 2 months coverage for each full year of employment
    for Mr. Keible (28 months total), 1.5 months
    coverage for each full year of employment for Mr. Mikulsky
    (18 months total) and 9 months coverage for
    Mr. Wallace.(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, 2008, was less than the exercise price of the
    options that would have been accelerated under the Severance and
    Retention Plan, the value of shares as to which vesting would
    have been accelerated is assumed to be zero.  Executive Officer Severance and Retention Plan Assuming a
    Change of Control:
 85




---



##### Table of Contents



Potential
    2008 Severance and Retention Benefits Assuming a Change of
    Control
    COBRA


Option


TotalName

Salary(1)


Benefits(2)


Awards(3)


BenefitEdward A. Keible, Jr.

$
1,801,333


$
31,769


$
0


$
1,833,102John J. Mikulsky

$
846,000


$
29,269


$
0


$
875,269Brett W. Wallace

$
376,500


$
14,635


$
0


$
391,135David M. Hall

$
90,769


$
4,813


$
0


$
95,582Steven F. Layton

$
132,308


$
13,008


$
0


$
145,316Daniel P. Teuthorn

$
140,923


$
11,086


$
0


$
152,009     (1)
    
    Reflects 4 months salary for each full year of employment
    for Mr. Keible (56 months total), 3.0 months
    salary for each full year of employment for Mr. Mikulsky
    (36 months total), 18 months salary for
    Mr. Wallace, 20 weeks salary for Mr. Hall, and
    32 weeks salary for Messrs. Layton and Teuthorn.(2)
    
    Reflects 2 months coverage for each full year of employment
    for Mr. Keible (28 months total), 1.5 months
    coverage for each full year of employment for Mr. Mikulsky
    (18 months total), 9 months coverage for
    Mr. Wallace, 20 weeks for Mr. Hall, and
    32 weeks for Messrs. Layton and Teuthorn.(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, 2008, was less than the exercise price of
    the options that would have been accelerated under the Severance
    and Retention Plan, the value of shares as to which vesting
    would have been accelerated is assumed to be zero.  Named
    Executive Officer Compensation
    Summary
    Compensation Table
  Non-EquityOption


Incentive Plan


All Other


TotalName and Principal Position

Year


Salary


Bonus


Awards


Compensation


Compensation


Compensation(1)


(2)


(3)


(4)


(5)


(6)


(7)Edward A. Keible, Jr.


2008


$
384,615






$
533,938


$
77,200


$
9,492


$
1,005,245President and Chief


2007


$
371,923


$
1,741


$
570,948


$
0


$
11,827


$
956,439Executive Officer


2006


$
325,631






$
431,546


$
178,000


$
10,089


$
945,266John J. Mikulsky


2008


$
280,385






$
232,252


$
42,300


$
7,287


$
562,224Chief Operating Officer


2007


$
266,154






$
234,746


$
0


$
5,773


$
506,673and Executive Vice President


2006


$
250,846






$
190,347


$
94,500


$
7,267


$
542,960Brett W. Wallace(8)


2008


$
249,269






$
261,438


$
37,600


$
6,324


$
554,631Chief Financial Officer,


2007


$
233,000






$
351,127


$
0


$
2,785


$
586,912Executive Vice President
    and Corporate Secretary


2006


$
170,038






$
349,168


$
65,625


$
315


$
585,146David M. Hall


2008


$
235,192






$
185,441


$
23,600


$
6,384


$
450,617Senior Vice President
    General Manager,
    Defense and Security


2007


$
227,961






$
272,262


$
0


$
4,971


$
505,194Steven F. Layton


2008


$
213,731






$
116,318


$
21,500


$
5,492


$
357,041Senior Vice President
    General Manager, Telecom


2007


$
201,808






$
119,767


$
0


$
55,903


$
377,478Daniel F. Teuthorn


2008


$
227,731






$
106,878


$
22,900


$
86,921


$
444,430Senior Vice President
    General Manager, Technology


2007


$
216,039






$
119,715


$
0


$
57,172


$
392,926  86




---



##### Table of Contents



(1)
    
    Messrs. Hall, Layton and Teuthorn were promoted to
    executive officer positions in February 2007; therefore, data
    for 2006 is not reported.(2)
    
    The amounts in this column include any salary contributed by the
    named executive officer to our 401(k) plan.(3)
    
    Reflects cash bonus paid to Mr. Keible for the award of a
    patent. Any bonus amounts paid under our non-equity incentive
    plan are included in the Non-Equity Incentive Plan
    Compensation column.(4)
    
    The amounts included in the Option Awards column
    represent the compensation cost recognized by Endwave related to
    stock option awards to named executive officers, computed in
    accordance with SFAS No. 123(R). 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 included elsewhere in
    this report.(5)
    
    The amounts in this column represent total performance-based
    bonuses earned for services rendered during the fiscal year.(6)
    
    All Other Compensation represents group insurance payments,
    401(k) employer matching contributions and educational
    reimbursement payments made by Endwave. Other Compensation for
    Mr. Teuthorn included educational reimbursement of $81,123
    in 2008 and $52,459 in 2007.(7)
    
    The dollar value in this column for each named executive officer
    represents the sum of all compensation reflected in the
    preceding columns.(8)
    
    Mr. Wallace joined Endwave on March 1, 2006, as
    Executive Vice President. He was promoted to Chief Financial
    Officer on April 25, 2006. Mr. Wallaces annual
    salary for 2006 was $210,000. 87




---



##### Table of Contents



Grants of
    Plan-Based Awards in Fiscal 2008 (1)
  AllOther





Grant DateOption





Closing


Grant DateAwards:


Exercise


Market


FairNumber of


or Base


Price of


Value ofEstimated Possible Payouts


Securities


Price of


Securities


Stock andUnder Non-Equity Incentive Plan Awards


Underlying


Option


Underlying


OptionGrant


Threshold


Target


Maximum


Options


Awards


Option


AwardsName

Date


($)


($)


($)


(#)


($/Sh)


($/Sh)(1)


($)(2)Edward A. Keible, Jr.


2/8/08


$
0


$
386,000


$
540,400



170,313


$
6.59


$
6.62


$
468,699John J. Mikulsky


2/8/08


$
0


$
211,500


$
296,100



85,000


$
6.59


$
6.62


$
222,316Brett W. Wallace


2/8/08


$
0


$
188,250


$
263,550



40,000


$
6.59


$
6.62


$
134,128David M. Hall


2/8/08


$
0


$
118,000


$
165,200



20,000


$
6.59


$
6.62


$
67,064Steven F. Layton


2/8/08


$
0


$
107,500


$
150,500



42,500


$
6.59


$
6.62


$
111,158Daniel P. Teuthorn


2/8/08


$
0


$
114,500


$
160,300



34,063


$
6.59


$
6.62


$
93,540     (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.(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 8
    to our consolidated financial statements. 88




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##### Table of Contents



Outstanding
    Equity Awards at December 31, 2008
  Number of Securities Underlying


Option


OptionUnexercised Options(1)(2)


Exercise


ExpirationName and Principal Position

Exercisable


Unexercisable


Price


DateEdward A. Keible, Jr.


75,000



0


$
9.77



2/6/201637,500



0


$
10.20



8/2/201442,500



0


$
10.22



2/2/201432,813
(3)


0


$
6.59



2/7/201837,500
(3)


0


$
6.59



2/7/2018100,000



0


$
13.23



2/11/20171,000



0


$
13.23



2/11/2017100,000



0


$
6.59



2/7/2018John J. Mikulsky


5,860



0


$
1.17



1/30/201313,894



0


$
1.93



6/5/201330,000



0


$
9.77



2/6/201615,000



0


$
10.20



8/2/201425,000



0


$
10.22



2/2/20144,923



0


$
11.75



1/5/201115,000
(3)


0


$
6.59



2/7/201830,000
(3)


0


$
6.59



2/7/201840,000



0


$
13.23



2/11/201740,000



0


$
6.59



2/7/2018Brett W. Wallace


120,000



0


$
9.32



2/29/201640,000



0


$
13.23



2/11/201740,000



0


$
6.59



2/7/2018David M. Hall


80,000



0


$
12.90



10/19/201515,000



0


$
9.77



2/6/201620,000



0


$
13.23



2/11/201720,000



0


$
6.59



2/7/2018Steven F. Layton


1,351



0


$
1.17



1/30/201311,723



0


$
1.93



6/5/201315,000



0


$
9.77



2/6/201615,000
(3)


0


$
6.59



2/7/20188,750



0


$
10.20



8/2/201418,000



0


$
10.22



2/2/20147,500
(3)


0


$
6.59



2/7/201820,000



0


$
13.23



2/11/201720,000



0


$
6.59



2/7/2018Daniel P. Teuthorn


938



0


$
1.17



1/30/201315,000



0


$
9.77



2/6/20167,500



0


$
10.20



8/2/201415,000



0


$
10.22



2/2/20146,563
(3)


0


$
6.59



2/7/20187,500
(3)


0


$
6.59



2/7/201820,000



0


$
13.23



2/11/201720,000



0


$
6.59



2/7/2018     (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, 2008 are as follows: Keible, 218,633;
    Mikulsky, 100,939; Wallace, 92,500; Hall, 52,189; Layton,
    50,471; and Teuthorn, 43,617. 89




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##### Table of Contents



(3)
    
    This option was replaced in our 2008 option exchange program for
    an option exercisable for the same number of shares but with an
    exercise price per share of $6.59. As required by such program,
    the new option vests over four years beginning in February 2008.  2008
    Option Exercises
    Compensation
    of Non-Employee Directors
    Fees Paid


Option


TotalName

in Cash


Awards(1)


CompensationEdward C.V. Winn, Chairman

$
44,000


$
48,065


$
92,065Joseph J. Lazzara

$
34,000


$
34,664


$
68,664John F. McGrath

$
41,000


$
51,573


$
92,573Wade Meyercord

$
33,000


$
35,704


$
68,704Eric D. Stonestrom

$
28,000


$
60,313


$
88,313     (1)
    
    The amounts included in the Option Awards column
    represent the compensation cost recognized by Endwave in 2008
    related to stock option awards to each member of our Board of
    Directors, computed in accordance with
    SFAS No. 123(R). 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.    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

$
6,000Compensation Committee Chair Annual Retainer

$
8,000Compensation Committee Member Annual Retainer

$
3,000Nominating and Governance Committee Chair Annual Retainer

$
3,000Nominating and Governance Committee Member Annual Retainer

$
0Board Meeting Fee

$
0Committee Meeting Fee

$
0    90




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##### Table of Contents



1 48 1 12
  Report of
    the Compensation
    Committee1
           1
 91




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  c/o Endwave
  Shares Beneficially Owned(1)Series B PreferredCommon Stock


StockName and Address

Number


Percent(2)


Number


Percent(2)Entities affiliated with Oak Management


3,900,000



29.44
%


390,000



100.00
%Corporation, XI, LLC(3)
    One Gorham Island
    Westport, CT 06880Entities affiliated with Potomac Capital


1,552,486



16.61Management(4)
    825 Third Avenue
    New York, NY 10022Entities affiliated with EagleRock


1,233,845



13.20Capital Management(5)
    551 Fifth Avenue, 34th Floor
    New York, NY 10176Pate Capital Partners, LP(6)


700,000



7.49555 Montgomery Street, Ste. 603
    San Francisco, CA 94111Entities affiliated with Dimensional


699,645



7.49Fund Advisors LP(7)
    1299 Ocean Ave.
    Santa Monica, CA 90401Entities affiliated with Portolan Capital Management, LLC(8)


516,329



5.52George McCabe
    2 International Place, FL 26
    Boston, MA 02110Edward A. Keible, Jr.(9)


665,911



7.13John J. Mikulsky(10)


325,182



3.48Brett W. Wallace(11)


246,081



2.63Daniel P. Teuthorn(12)


136,145



1.46Steven F. Layton(13)


139,710



1.49David M. Hall(14)


164,833



1.76Edward C.V. Winn(15)


33,989



*Joseph J. Lazzara(16)


40,966



*John F. McGrath, Jr.(15)


41,216



*Wade Meyercord(15)


40,266



*Eric Stonestrom(15)


28,249



*All directors and executive officers as a group
    (11 persons)(17)


1,862,548



19.93     *
    
    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. 92




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##### Table of Contents



(2)
    
    Applicable percentages are based on 9,345,442 shares
    outstanding on February 6, 2009, adjusted as required by
    rules promulgated by the Securities and Exchange Commission.(3)
    
    300,000 shares of Series B Stock are held of record by
    Oak Investment Partners XI, Limited Partnership, a Delaware
    limited partnership (Oak Investment Partners XI,).
    Oak Associates XI LLC, a Delaware limited liability company
    (Oak Associates XI), is the general partner of Oak
    Investment Partners XI and as such may be deemed to beneficially
    own the shares held by Oak Investment XI. Oak Management
    Corporation, a Delaware corporation (Oak
    Management), is the investment advisor to Oak Investment
    Partners XI and as such may be deemed to beneficially own the
    shares held by Oak Investment XI. Bandel L. Carano, Gerald R.
    Gallagher, Edward F. Glassmeyer, Fredric W. Harman, Ann H.
    Lamont and David B. Walrod are general partners, managing
    members, shareholders, directors and/or officers of Oak
    Investment XI and as such may be deemed to beneficially own the
    shares held by Oak Investment XI. The number of shares of
    Series B Stock beneficially owned by Oak Investment XI
    includes 90,000 shares of Series B Stock issuable
    within 60 days of the date of this table upon exercise of a
    warrant held by Oak Investment XI. The number of shares of
    common stock beneficially owned by Oak Investment XI includes
    3,900,000 shares of common issuable within 60 days of
    the date of this table upon conversion of 390,000 shares of
    Series B Stock beneficially owned by Oak Investment XI.(4)
    
    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.(5)
    
    The shares are held by EagleRock Master Fund, L.P.
    (ERMF) and EagleRock Institutional Partners LP
    (ERIP). EagleRock Capital Management, LLC
    (EagleRock) is the investment manager of ERMF and
    ERIP and has sole power to vote and dispose of the shares held
    by ERMF and ERIP and may be deemed to beneficially own such
    shares. Nader Tavakoli is the Manager of EagleRock and may
    direct the voting and disposition of the shares held by ERMF and
    ERIP and may be deemed to beneficially own such shares.(6)
    
    The shares are beneficially held by Pate Capital Partners, LP .
    Bruce A. Pate, General Partner has the sole power to vote or
    direct the vote of said shares. In addition, Mr. Bruce A.
    Pate has the sole power to dispose or to direct the disposition
    of said shares.(7)
    
    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.(8)
    
    Portolan Capital Management, LLC, an unregistered investment
    adviser beneficially own directly shares of common stock of the
    Issuer in its capacity as investment manager for various
    clients, and indirectly by George McCabe, the Manager of
    Portolan Capital Management, LLC. Portolan Capital Management,
    LLC and Mr. McCabe are sometimes individually referred to
    herein as a Reporting Person and collectively as the
    Reporting Persons.(9)
    
    Includes 526,313 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,
    296,987 shares would be subject to repurchase by us. Also
    includes 139,598 shares held by the Keible Family Trust, of
    which Mr. Keible is co-trustee.(10)
    
    Includes 259,677 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,
    131,251 shares would be subject to repurchase by us. Also
    includes 600 shares owned by Mr. Mikulskys
    daughter.(11)
    
    Includes 240,000 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,
    120,000 shares would be subject to repurchase by us. 93




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##### Table of Contents



(12)
    
    Includes 112,501 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,
    59,299 shares would be subject to repurchase by us.(13)
    
    Includes 137,324 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,
    65,626 shares would be subject to repurchase by us.(14)
    
    Includes 155,000 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,
    63,751 shares would be subject to repurchase by us.(15)
    
    Represents shares issuable upon exercise of options exercisable
    within 60 days of the date of this table.(16)
    
    Includes 39,966 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table. Also
    includes 1,000 shares held by the Joseph J. and Nancy B.
    Lazzara Family Trust, of which Mr. Lazzara is co-trustee.(17)
    
    See footnotes 9 through 16 above, as applicable. Includes
    1,614,501 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,
    736,914 shares would be subject to a repurchase right by us.  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Indemnification
    Transactions
    with Wood River
       94




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##### Table of Contents



Related-Person
    Transactions Policy and Procedures
     95




---



##### Table of Contents



Independence
    of the Board of Directors
      Item 14.
    Principal
    Accountant Fees and Services    2008


2007Audit Fees(1)

$
382


$
543Audit-related Fees(2)






13Tax Fees






All Other Fees






Total

$
382


$
556     (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
 96




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements Schedules and
    Exhibits.
                    Listing of Exhibits:
  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, 2007.3
.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(5)

Preferred Stock and Warrant Purchase Agreement by and between
    Oak Investment Partners XI, Limited Partnership and the
    Registrant dated April 24, 2006.4
.5(5)

Warrant issued to Oak Investment Partners XI, Limited
    Partnership.4
.6(8)

Amendment No. 1 to Rights Agreement, dated as of December 21,
    2007, between the Registrant and 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. 97




---



##### Table of Contents



Number

Description10
.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(2)*

2000 Employee Stock Purchase Plan.10
.9(2)*

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

2000 Non-Employee Directors Stock Option Plan, as amended.10
.11(2)*

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

Description of Compensation Payable to Non-Employee Directors.10
.13(12)*

2008 Base Salaries for Named Executive Officers.10
.14(12)*

2008 Executive Incentive Compensation Plan.10
.15(13)*

Executive Officer Severance and Retention Plan.10
.16(2)

License Agreement by and between TRW Inc. and TRW Milliwave Inc.
    dated February 28, 2000.10
.17(14)

Purchase Agreement between Nokia and the Registrant dated
    January 1, 2006.10
.18(14)

Frame Purchase Agreement by and between the Registrant and
    Siemens Mobile Communications Spa dated January 16, 2006.10
.19(15)

Lease Agreement by and between Legacy Partners I San Jose,
    LLC and the Registrant dated May 24, 2006.10
.20(16)

Amended and Restated Supply Agreement by and between Northrop
    Grumman Space and Mission Systems Corp. and the Registrant dated
    May 12, 2008.10
.21(17)

Services Agreement by and between Hana Microelectronics Co.,
    Ltd. and the Registrant dated October 15, 2006.10
.22(18)

Amended and Restated Settlement Agreement by and between the
    Registrant and Arthur Steinberg, as receiver for Wood River
    Capital Management, L.L.C., Wood River Associates, L.L.C., Wood
    River Partners, L.P. and Wood River Partners Offshore, Ltd.,
    dated December 20, 2007.10
.23(8)

Stock Purchase Agreement, dated December 21, 2007, entered into
    between the Registrant, Wood River Partners, L.P., Wood River
    Partners Offshore, Ltd. and, for the limited purpose set forth
    therein, Arthur J. Steinberg, solely in his capacity as Receiver
    for Wood River Capital Management, L.L.C., Wood River
    Associates, L.L.C., Wood River Partners, L.P. and Wood River
    Partners Offshore, Ltd. and not in his individual capacity.10
.24(16)

Lease Agreement by and between 8812, a California limited
    partnership, and the Registrant dated May 20, 2008.21
.1

List of Subsidiaries.23
.1

Consent of Burr, Pilger & Mayer LLP, 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. 98




---



##### Table of Contents



(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 21, 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.(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 Annual
    Report on
    Form 10-K
    filed for the fiscal year ended December 31, 2007 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
    Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2008 and incorporated herein
    by reference.(17)
    
    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.(18)
    
    Previously filed as an exhibit to the Registrants Current
    Report on
    Form 8-K
    filed on December 20, 2007 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
 99




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##### Table of Contents



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


Charged to


Deductions


Balances atBeginning of


Costs and


and


End ofPeriod


Expense


Write-offs


Period(In thousands)Year ended December 31, 2008

$
67


$
(3
)

$



$
64Year ended December 31, 2007

$
131


$
(5
)

$
(59
)

$
67Year ended December 31, 2006

$
296


$
(124
)

$
(41
)

$
131  100




---



##### Table of Contents



SIGNATURES      By:
    /s/  BRETT
    W. WALLACE      POWER OF
    ATTORNEY
  KNOW ALL PERSONS BY THESE PRESENTS, Form 10-K,
  Signatures

Title

Date/s/  EDWARD
    A. KEIBLE, JR.Edward
    A. Keible, Jr.

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

March 19, 2009/s/  BRETT
    W. WALLACEBrett
    W. Wallace

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

March 19, 2009/s/  EDWARD
    C.V. WINNEdward
    C.V. Winn

Chairman of the Board of Directors

March 19, 2009/s/  JOSEPH
    J. LAZZARAJoseph
    J. Lazzara

Director

March 19, 2009/s/  JOHN
    F. MCGRATH, JR.John
    F. McGrath, Jr.

Director

March 19, 2009/s/  WADE
    MEYERCORDWade
    Meyercord

Director

March 19, 2009/s/  ERIC
    STONESTROMEric
    Stonestrom

Director

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