##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, 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, 2005oro

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.)776 Palomar Avenue
    Sunnyvale, CA(Address of principal
    executive offices)

94085(Zip
    code)   (408) 522-3100
 (Registrants telephone
    number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:  None
  Securities registered pursuant to Section 12(g) of the
    Act: Common Stock, $0.001 par value per share
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ




---



##### 



ENDWAVE
    CORPORATIONFORM 10-K
    Year Ended December 31, 2005
    TABLE OF CONTENTS
  Page No.PART IItem 1.

Business


2Item 1A.

Risk Factors


17Item 1B.

Unresolved Staff
    Comments


28Item 2.

Properties


28Item 3.

Legal
    Proceedings


28Item 4.

Submission of
    Matters to a Vote of Security Holders


28PART IIItem 5.

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


29Item 6.

Selected
    Consolidated Financial Data


29Item 7.

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


30Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


45Item 8.

Financial
    Statements and Supplementary Data


46Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


73Item 9A.

Controls and
    Procedures


73Item 9B.

Other
    Information


75PART IIIItem 10.

Directors and
    Executive Officers of the Registrant


75Item 11.

Executive
    Compensation


79Item 12.

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


83Item 13.

Certain
    Relationships and Related Transactions


84Item 14.

Principal
    Accounting Fees and Services


85PART IVItem 15.

Exhibits and
    Financial Statement Schedules


86SIGNATURES


90EXHIBIT 10.9EXHIBIT 10.24EXHIBIT 10.25EXHIBIT 23.1EXHIBIT 23.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1   1




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##### Table of Contents



FORWARD-LOOKING
    INFORMATION
   PART I  Item 1.
    Business  Introduction
    point-to-point
 2




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##### Table of Contents



Industry
    Background and Markets
  High-Frequency
    RF Technology
      Telecommunication
    Networks
  Applications of High-Frequency RF Technologies in
    Telecommunication Networks.
  Cellular Backhaul.
  Carrier Class Trunking.
  Private Voice and Data Networks.
 3




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##### Table of Contents



Increased Demand for Microwave Radios in Telecommunication
    Networks.
  Growth of Wireless Telephony in Developing
    Nations.
  Increase in Data-Intensive Cellular
    Traffic.
  Deployment of Third-Generation
    Networks.
  Introduction of Other High Capacity Data-Only
    Telecommunication Networks.
 4




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##### Table of Contents



Defense
    Electronics
    Electronic Warfare Systems.
  Radar Systems.
  Intelligent Battlefield Systems.
  High Capacity Communications.
    Homeland
    Security Systems
    Advanced Personnel Screening Portals.
  Long Distance Personnel
    Detection.
    Our
    Opportunity
   5




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##### Table of Contents



Low Cost.
  Technical Depth.
  Flexible Production.
  Innovative Technology.
    Our
    Strengths
    Cost-Effective Volume Manufacturing.
  Depth and Breadth of Technical Expertise.
 6




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Scalable and Flexible Manufacturing.
  Next-Generation Technology.
  Our
    Strategy
    Accelerate
    Revenue Growth
  Increase our Telecommunication Network
    Business.
  Expand into New Growth Markets.
  Grow through Acquisitions.
  Offer
    the Highest Level of Manufacturing Efficiency and
    Flexibility
  Continually Improve Manufacturing
    Efficiency.
 7




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Outsource to Low-Cost, Contract
    Manufacturers.
  Reduce Raw Materials and Component Costs.
  Employ a Fabless Semiconductor
    Model.
  Leverage
    Technical Breadth and Strength
  Broaden our Product Portfolio.
  Develop New Circuit and Packaging
    Technologies.
  Products
    and Technology
  Products
    Single-Function Modules.
 8




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Multi-Function Modules.
  Integrated Subsystem Modules.
    
   Circuit
    Technologies
   9




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##### Table of Contents



Circuit TechnologiesCurrent Technology


Endwave Next-Generation
    TechnologyCircuit Type


HMIC


MMIC


MLMS(Circuit Graphic)


(Circuit Graphic)


(Circuit Graphic)Description


Individual devices bonded to a
    substrate and then interconnected with bond wires


Monolithic semiconductor substrate
    with patterned devices and interconnections


Individual devices flip chip
    attached using our patented flip chip assembly technology to a
    complex substrateModule Design


Multiple circuits cascaded to form
    a functional block


Multiple circuits cascaded to form
    a functional block


Single substrate can form a
    complete system on a chip functional blockSubstrate


Ceramic with single top layer
    metallization


Semiconductor material, typically
    gallium arsenide


Next generation, multi- layer
    substrate containing metal, capacitive and resistive layersActive Devices


Individual RF devices attached to
    substrate


Devices patterned into various
    areas of the substrate; active device area is a small fraction
    of total substrate area


Individual RF devices especially
    designed for flip chip assemblyApplication


Used for rapid prototyping and low
    volume production


Used for high volume automated or
    third-party assembly


Used for high volume automated or
    third-party assemblyNumber of Bond Wires (which require
    manual tuning)


High  Often
    hundreds per module


Moderate  Often
    tens per module


Low  Often fewer
    than 10 per modulePerformance


Variable  Units
    must be hand-tuned to required specifications and performance
    may be variable


Good  MMIC circuit
    designed for consistent performance, limited by substrate
    characteristics


Excellent  Very
    consistent performance due to lack of bond wires and improved
    substrate materialDesign Difficulty


Moderate  The most
    flexible circuit technology for customizing RF performance; can
    be designed very quickly by us because of our large library of
    HMIC core elements


Difficult  Complete
    circuit and all interactions must be concurrently analyzed;
    complicated by sub- optimal substrate properties of
    semiconductor materials for interconnection and filter elements;
    single-substrate process must be used for all devices


Moderate  Multi-layer
    properties of substrate facilitate ease of design; layers
    optimized for their functionRelative Cost


High  Material
    costs are modest, but high assembly, test and rework labor costs


High  Material cost
    of large semiconductors is expensive


Moderate  Device
    and substrate costs are lower than MMICs; assembly process
    automated for lower labor costs than HMICsStatus


In production


In production


In the initial stages of commercial
    production  10




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Circuit
    Packaging Technologies
      Circuit Packaging TechnologiesCurrent Technology


Endwave Next-Generation TechnologyPackage Type


Planar


Epsilon(PLANAR PACKAING DEVICE)


EPSILON PACKAGING DEVICE)Description


Circuit substrates mounted to metal
    carrier and then enclosed with metal cover; entire assembly
    mounted to conventional printed wiring board


Circuit substrates mounted directly
    to composite printed wiring board using chip on
    board approach and then enclosed with non-metallized
    plastic coverSize and Weight


Metallic parts add significant
    thickness and weight


Significantly thinner and lighter
    than planar packagesPerformance


Good  Good
    performance with adequate RF gasket seal


Excellent  RF
    cavity sealed better than planar packagesDesign Difficulty


Moderate  Requires
    separate design effort for carrier and cover with interfaces to
    printed wiring board


Low  Fewer elements
    to design and fewer mechanical interfaces to manage than planar
    packagesManufacturability


Eight major assembly steps


Four major assembly stepsRelative Cost


Moderate  Material
    costs are significant


Low  Metal carrier
    eliminated and plastic cover is more cost-effectiveStatus


In production


In the initial stages of commercial
    production  11




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Sales and
    Marketing
      Customers
    Telecommunication
    Network

Defense Electronics and Homeland
    SecurityCeragon

BAE SystemsNera ASA

The Boeing CompanyNokia

Lockheed Martin CorporationPowerwave Technologies, Inc.

Raytheon CompanySiemens AG
    Stratex Networks, Inc.

SafeView, Inc.    12




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##### Table of Contents



Acquisitions
    Acquisition


Structure


Key BenefitsJCA 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,
    including Raytheon Company, Lockheed Martin Corporation and BAE
    Systems plc
     Added new customers, including Thales Group SA, L-3
    Communications Corp. and Xicom Technology
     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 productsSignal 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  13




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Competition
      
    Product pricing and the ability to offer low-cost solutions;
    Technical leadership and product performance;
    Product breadth;
    Time-to-market
    in the design and manufacturing of products; and
    Logistical flexibility, manufacturing capability and scalable
    capacity.  Research
    and Development
    Custom Semiconductor Design Capabilities. off-the-shelf
  Breadth of Expertise.
  Computer Modeling Capabilities.
  Extensive Library of Circuit Designs. time-to-market
  Automated Testing Processes.
   14




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Patents
    and Intellectual Property Rights
        Operations
     15




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9001-2000,
  Backlog
      Governmental
    Regulation
      Employees
   16




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Available
    Information
  (408) 522-3100. 1-800-SEC-0330. http://www.sec.gov
  Item 1A.
    Risk
    Factors  You should consider carefully the following risk factors as
    well as other information in this report before investing in any
    of our securities. If any of the following risks actually occur,
    our business, operating results and financial condition could be
    adversely affected. This could cause the market price of our
    common stock to decline, and you may lose all or part of your
    investment.
  Risks
    Relating to Our Business
  We
    have had a history of losses and may not be profitable in the
    future.
    We
    depend on a small number of key customers in the
    telecommunications industry for a large portion of our revenues.
    If we lose any of our major customers, particularly Nera, Nokia
    or Siemens 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.
    We
    depend on the telecommunications industry for most of our
    revenues. If this industry suffers another downturn or fails to
    grow as anticipated, 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.
     17




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Our
    future success depends in part on our ability to further
    penetrate into new markets, such as defense electronics and
    homeland security, and we may be unable to do so.
    Our
    operating results may fluctuate significantly based on seasonal
    factors in the telecommunication network market.
    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; 18




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##### Table of Contents




    voltage-controlled oscillators;
    voltage regulators;
    lead-free surface mount components;
    high-frequency circuit boards;
    custom connectors;
    electromagnetic housings;
    yttrium iron garnet components; and
    magnetic components.    Our
    cash requirements will be impacted by our need to increase
    inventories.
    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.
   19




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We
    rely on Velocium and other third-party semiconductor foundries
    to manufacture the semiconductors contained in our products. The
    loss of our relationship with any of these foundries,
    particularly Velocium, without adequate notice would adversely
    impact our ability to fill customer orders and could damage our
    customer relationships.
      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.     20




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Our
    products may contain component, manufacturing or design defects
    or may not meet our customers performance criteria, which
    could cause us to incur significant repair expenses, harm our
    customer relationships and industry reputation, and reduce our
    revenues and profitability.
        We
    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.
     21




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Competitive
    conditions may require us to reduce prices in the future and, as
    a result, we may need to reduce our costs in order to be
    profitable.
    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.
       22




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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.      Because
    we do not have long-term commitments from many of our customers,
    we must estimate customer demand, and errors in our estimates
    could have negative effects on our inventory levels, revenues
    and results of operations.
   23




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##### Table of Contents



Some
    of our customer contracts require us to manufacture products
    designed by our customers. While we intend to convert many of
    these products to products of our own design, such transitions
    may be difficult and/or expensive to implement and delays or
    difficulties in doing so could harm our operating
    results.
    Any
    failure to protect our intellectual property appropriately could
    reduce or eliminate any competitive advantage we
    have.
       24




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##### Table of Contents



Risks
    Relating to Our Industry
  Our
    acquisition of JCA Technology and our own marketing and sales
    efforts have increased the volume of our products used by the
    United States government. Our revenues in this market largely
    depend upon the funding and implementation decisions of Congress
    and United States government agencies. These decisions could
    change abruptly and without notice, unexpectedly reducing our
    current or future revenues in this market.
    Our
    failure to compete effectively could reduce our revenues and
    margins.
     25




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Our
    failure to comply with any applicable environmental regulations
    could result in a range of consequences, including fines,
    suspension of production, excess inventory, sales limitations
    and criminal and civil liabilities.
    Government
    regulation of the communications industry could limit the growth
    of the markets that we serve or could require costly alterations
    of our current or future products.
    Risks
    Relating to Ownership of Our Stock
  The
    assets of Wood River Capital Management, LLC and certain of its
    affiliates, the holders of 36.7% of our outstanding common stock
    as of December 31, 2005, have been placed into receivership
    by the Securities and Exchange Commission, and the receiver may
    dispose of such shares of our common stock. Such disposition may
    adversely affect the trading price of our common
    stock.
    The
    market price of our common stock has historically fluctuated and
    is likely to fluctuate in the future.
    
    our financial performance or the performance of our competitors;
    the purchase or sale of common stock, or short-selling or other
    transactions involving our securities, particularly by Wood
    River or other large stockholders;
    technological innovations or other trends or changes in the
    telecommunication network, defense electronics or homeland
    security markets; 26




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##### Table of Contents




    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; and
    the low trading volume of our common stock.    Wood
    River and the receiver of the Wood River assets control a large
    percentage of our common stock and are able to affect
    significantly the outcome of matters requiring stockholder
    approval.
    Our
    certificate of incorporation, bylaws and arrangements with
    executive officers contain provisions that could delay or
    prevent a change in control.
  2 3
 27




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings      Item 4.
    Submission
    of Matters to a Vote of Security Holders               28




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


LowFiscal Year Ended
    December 31, 2004First Quarter

$
12.96


$
7.10Second Quarter


10.20



5.50Third Quarter


14.60



6.83Fourth Quarter


19.20



12.70Fiscal Year Ended
    December 31, 2005First Quarter


25.83



16.63Second Quarter


49.75



23.66Third Quarter


55.41



12.30Fourth Quarter


15.34



9.46       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, 2003, 2004 and 2005 and the selected
    consolidated balance sheet data as of December 31, 2004 and
    2005 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, 2001 and 2002 and the
    selected consolidated balance sheet data as of December 31,
    2001, 2002 and 2003 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. All per-share
    amounts for all periods presented have been restated to reflect
    the 1-for-4
    reverse stock split that became effective after the close of
    business on June 28, 2002.
  Year Ended
    December 31,2005


2004


2003


2002


2001(In thousands, except per share
    data)Consolidated Statements of
    Operations Data:Revenues

$
48,735


$
33,162


$
33,847


$
22,572


$
34,125Cost of product revenues


33,586



22,576



24,830



29,777



57,233Other operating expenses


16,799



16,115



17,568



27,995



136,463Loss from operations


(1,650
)


(5,529
)


(8,551
)


(35,200
)


(159,571
)Net loss

$
(874
)

$
(4,404
)

$
(7,910
)

$
(31,002
)

$
(156,746
)Basic and diluted net loss per
    share

$
(0.08
)

$
(0.45
)

$
(0.87
)

$
(3.47
)

$
(17.90
)   29




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December 31,2005


2004


2003


2002


2001(In thousands)Consolidated Balance Sheet
    Data:Cash, cash equivalents and
    short-term investments

$
22,415


$
25,137


$
29,298


$
29,025


$
57,163Total assets


53,149



50,094



53,074



60,049



99,037Long-term obligations, less
    current portion


385



559



363



1,075



3,841Total stockholders equity


43,083



39,064



41,043



47,506



77,129   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
    Markets
    and Growth Strategy
  Telecommunication network market.
      Defense electronics and homeland security system
    markets.
 30




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Growth through acquisitions.
  Improvement
    in Cost Structure
      Seasonality
   31




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Critical
    Accounting Policies
  General
    Revenue
    Recognition
    Allowance
    for Doubtful Accounts
    Warranty
    Reserves
    Inventory
    Valuation
   32




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Deferred
    Taxes
    Long-Lived
    Assets
    Business
    Combinations
     33




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Results
    of Operations
    Year Ended
    December 31,2005


2004


2003(In thousands)Revenues:Product revenues

$
47,119


$
32,330


$
32,135Development fees


1,616



832



1,712Total revenues


48,735



33,162



33,847Costs and expenses:Cost of product revenues


33,134



22,389



24,830Cost of product revenues,
    amortization of intangible assets


452



187



Research and development


6,488



4,957



4,462Selling, general and administrative


9,327



7,527



8,755Transaction costs


851







In-process research and development






320



Amortization of intangible assets


179



182



Restructuring charges, net


(46
)


2,895



304Impairment of long-lived assets






389



2,589Loss (recovery) on building
    sublease






(359
)


662Amortization of deferred stock
    compensation






204



796Total costs and expenses


50,385



38,691



42,398Loss from operations


(1,650
)


(5,529
)


(8,551
)Interest and other income, net


776



1,125



641Net loss

$
(874
)

$
(4,404
)

$
(7,910
)   34




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##### Table of Contents



Year Ended
    December 31,2005


2004


2003(As a percentage of total
    revenues)Revenues:Product revenues


96.7
%


97.5
%


94.9
%Development fees


3.3



2.5



5.1Total revenues


100.0
%


100.0
%


100.0
%Costs and expenses:Cost of product revenues


68.0



67.5



73.4Cost of product revenues,
    amortization of intangible assets


0.9



0.6



Research and development


13.3



14.9



13.2Selling, general and administrative


19.1



22.7



25.9Transaction costs


1.7







In-process research and development






1.0



Amortization of intangible assets


0.5



0.5



Restructuring charges, net


(0.1
)


8.7



0.9Impairment of long-lived assets






1.2



7.6Loss (recovery) on building
    sublease






(1.1
)


2.0Amortization of deferred stock
    compensation






0.7



2.3Total costs and expenses


103.4



116.7



125.3Loss from operations


(3.4
)


(16.7
)


(25.3
)Interest and other income, net


1.6



3.4



1.9Net loss


(1.8
)%


(13.3
)%


(23.4
)%   Results
    of Operations
  Year
    ended December 31, 2005 compared to year ended
    December 31, 2004
  Total
    revenues
  Year Ended
    December 31,2005


2004


% Change(In thousands)Total revenues

$
48,735


$
33,162



47.0
%Product revenues

$
47,119


$
32,330



45.7
%Development fees

$
1,616


$
832



94.2
%      35




---



##### Table of Contents



Cost of
    product revenues
  Year Ended
    December 31,2005

2004

% Change(In thousands)Cost of product revenues

$
33,134


$
22,389



48.0
%Percentage of revenues


68.0
%


67.5
%           Research
    and development expenses
  Year Ended
    December 31,2005

2004

% Change(In thousands)Research and development expenses

$
6,488


$
4,957



30.9
%Percentage of revenues


13.3
%


14.9
%  36




---



##### Table of Contents



Selling,
    general and administrative expenses
  Year Ended
    December 31,2005

2004

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

$
9,327


$
7,527



23.9
%Percentage of revenues


19.1
%


22.7
%       Transaction
    costs
  Year Ended
    December 31,2005

2004

% Change(In thousands)Transaction costs

$
851


$




     In-process
    research and development
  Year Ended
    December 31,2005

2004

% Change(In thousands)In-process research and development

$



$
320



    37




---



##### Table of Contents



Amortization
    of intangible assets
  Year Ended
    December 31,2005

2004

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

$
452


$
187



141.7
%Amortization of intangible assets

$
179


$
182



(1.6
)%       Restructuring
    charges, net
  Year Ended
    December 31,2005

2004

% Change(In thousands)Restructuring charges, net

$
(46
)

$
2,895



       Impairment
    of long-lived assets
  Year Ended
    December 31,2005

2004

% Change(In thousands)Impairment of long-lived assets

$



$
389



   held-for-sale held-for-sale
 38




---



##### Table of Contents



Loss
    (recovery) on building sublease
  Year Ended
    December 31,2005

2004

% Change(In thousands)Loss (recovery) on building
    sublease

$



$
(359
)


     Amortization
    of deferred stock compensation
  Year Ended
    December 31,2005

2004

% Change(In thousands)Amortization of deferred stock
    compensation

$



$
204



     Interest
    and other income, net
  Year Ended
    December 31,2005

2004

% Change(In thousands)Interest expense

$



$
19



Interest and other income, net

$
776


$
1,144



(32.2
)%       held-for-sale
 39




---



##### Table of Contents



Year
    ended December 31, 2004 compared to year ended
    December 31, 2003
  Total
    revenues
  Year Ended
    December 31,2004

2003

% Change(In thousands)Total revenues

$
33,162


$
33,847



(2.0
)%Product revenues

$
32,330


$
32,135



0.6
%Development fees

$
832


$
1,712



(51.4
)%       Cost of
    product revenues
  Year Ended
    December 31,2004

2003

% Change(In thousands)Cost of product revenues

$
22,389


$
24,830



(9.8
)%Percentage of revenues


67.5
%


73.4
%     Research
    and development expenses
  Year Ended
    December 31,2004

2003

% Change(In thousands)Research and development expenses

$
4,957


$
4,462



11.0
%Percentage of revenues


14.9
%


13.2
%    40




---



##### Table of Contents



Selling,
    general and administrative expenses
  Year Ended
    December 31,2004

2003

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

$
7,527


$
8,755



(14.0
)%Percentage of revenues


22.7
%


25.9
%     In-process
    research and development
  Year Ended
    December 31,2004

2003

% Change(In thousands)In-process research and development

$
320


$




     Amortization
    of intangible assets
  Year Ended
    December 31,2004

2003

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

$
187


$




Amortization of intangible assets

$
182


$




     Restructuring
    charges, net
  Year Ended
    December 31,2004

2003

% Change(In thousands)Restructuring charges, net

$
2,895


$
304



852.3
%      41




---



##### Table of Contents



Impairment
    of long-lived assets
  Year Ended
    December 31,2004

2003

% Change(In thousands)Impairment of long-lived assets

$
389


$
2,589



(85.0
)%   held-for-sale held-for-sale
      Amortization
    of deferred stock compensation
  Year Ended
    December 31,2004

2003

% Change(In thousands)Amortization of deferred stock
    compensation

$
204


$
796



(74.4
)%     Loss
    (recovery) on building sublease
  Year Ended
    December 31,2004

2003

% Change(In thousands)Loss (recovery) on building
    sublease

$
(359
)

$
662



     Interest
    and other income, net
  Year Ended
    December 31,2004

2003

% Change(In thousands)Interest expense

$
19


$
112



(83.0
)%Interest and other income, net

$
1,144


$
753



51.9
%  42




---



##### Table of Contents



held-for-sale
    Liquidity
    and Capital Resources
    Year Ended
    December 31,2005

2004

2003(In thousands)Net cash provided by (used in)
    operating activities

$
(7,184
)

$
(4,970
)

$
221Net cash provided by investing
    activities


5,906



1,899



1,332Net cash provided by (used in)
    financing activities


4,926



1,471



(1,169
)Cash, cash equivalents, restricted
    cash and short-term investments at end of period

$
22,440


$
25,137


$
30,076          43




---



##### Table of Contents



Years Ending
    December 31,

Operating Leases(In thousands)2006

$
4562007


3082008


3002009


105Total minimum payments required

$
1,169   Recent
    Accounting Pronouncements
      fair-value-based
 44




---



##### Table of Contents



FAS 115-1 FAS 124-1, Other-Than-Temporary FAS 115-1), other-than-temporary, FAS 115-1 other-than-temporary FAS 115-1 FAS 115-1
  Item 7A.
    Qualitative
    and Quantitative Disclosures about Market Risk  Qualitative
    and Quantitative Disclosures about Market Risk
     45




---



##### Table of Contents



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


47Consolidated
    Balance Sheets


49Consolidated
    Statements of Operations


50Consolidated
    Statements of Changes in Stockholders Equity


51Consolidated
    Statements of Cash Flows


52Notes to
    Consolidated Financial Statements


53  46




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM           Internal
    Control  Integrated Framework
  Burr,
    Pilger, & Mayer LLP
     47




---



##### Table of Contents



ERNST &
    YOUNG LLP, INDEPENDENT
    REGISTERED PUBLIC ACCOUNTING FIRM
            Ernst &
    Young LLP
    48




---



##### Table of Contents



ENDWAVE
    CORPORATION
  CONSOLIDATED BALANCE SHEETS
  December 31,2005


2004(In thousands, exceptshare and per share
    data)ASSETSCurrent assets:Cash and cash equivalents

$
8,456


$
4,808Restricted cash


25



Short-term investments


13,959



20,329Accounts receivable, net of
    allowance for doubtful accounts of $296 in 2005 and $243 in 2004


10,487



8,673Accounts receivable, from affiliate






15Inventories


13,448



7,866Other current assets


560



477Total current assets


46,935



42,168Property and equipment, net


1,321



2,394Other assets


97



125Goodwill and intangible assets


4,796



5,407Total assets

$
53,149


$
50,094LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,954


$
2,308Accounts payable to affiliate






1,279Accrued warranty


3,257



4,488Accrued compensation


2,494



1,370Restructuring liabilities, current


20



274Other current liabilities


956



752Total current liabilities


9,681



10,471Other long-term liabilities


385



559Total liabilities


10,066



11,030Commitments and contingencies
    (Note 9)Stockholders equity:Convertible preferred stock,
    $0.001 par value; 5,000,000 shares authorized and none
    issued and outstanding






Common stock, $0.001 par
    value; 100,000,000 shares authorized; 11,358,816 and
    10,499,944 shares issued and outstanding in 2005 and 2004,
    respectively


11



10Additional paid-in capital


309,583



304,658Treasury stock, at cost
    (39,150 shares in 2005 and 2004)


(79
)


(79
)Accumulated other comprehensive
    loss


(63
)


(30
)Accumulated deficit


(266,369
)


(265,495
)Total stockholders equity


43,083



39,064Total liabilities and
    stockholders equity

$
53,149


$
50,094    49




---



##### Table of Contents



ENDWAVE
    CORPORATION
 CONSOLIDATED STATEMENTS OF OPERATIONS  Year Ended
    December 31,2005


2004


2003(In thousands, except shareand per share data)Revenues:Product revenues ($61, $86, and
    $345 from affiliate, respectively)

$
47,119


$
32,330


$
32,135Development fees


1,616



832



1,712Total revenues


48,735



33,162



33,847Costs and expenses:Cost of product revenues ($39,
    $51, and $124 related to revenues from affiliate, respectively)


33,134



22,389



24,830Cost of product revenues,
    amortization of intangible assets


452



187



Research and development


6,488



4,957



4,462Selling, general and administrative


9,327



7,527



8,755Transaction costs


851







In-process research and development






320



Amortization of intangible assets


179



182



Restructuring charges, net


(46
)


2,895



304Impairment of long-lived assets






389



2,589Loss (recovery) on building
    sublease






(359
)


662Amortization of deferred stock
    compensation*






204



796Total costs and expenses


50,385



38,691



42,398Loss from operations


(1,650
)


(5,529
)


(8,551
)Interest and other income, net


776



1,144



753Interest expense






(19
)


(112
)Net loss

$
(874
)

$
(4,404
)

$
(7,910
)Basic and diluted net loss per
    share

$
(0.08
)

$
(0.45
)

$
(0.87
)Shares used in computing basic and
    diluted net loss per share


10,891,431



9,824,633



9,134,626* Amortization of deferred
    stock compensation:Cost of product revenues

$



$
109


$
193Research and development






44



225Selling, general and administrative






51



378$



$
204


$
796    50




---



##### Table of Contents



ENDWAVE
    CORPORATION
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY  AccumulatedAdditional





Deferred


OtherShares of


Common


Paid-In


Treasury


Stock


Comprehensive


AccumulatedCommon Stock


Stock


Capital


Stock


Compensation


Income (Loss)


Deficit


Total(In thousands, except share
    data)Balance as of December 31, 2002


9,014,661


$
9


$
302,116


$
(79
)

$
(1,292
)

$
(67
)

$
(253,181
)

$
47,506Unrealized gain on short-term
    investments






















65







65Net loss


























(7,910
)


(7,910
)Comprehensive loss






























(7,845
)Exercise of stock options


211,776







493



















493Compensation recognized under
    employee stock plans










124



















124Amortization of deferred stock
    compensation


















672











672Reversal of deferred stock
    compensation due to forfeited options










(399
)






399











Issuance of common stock under
    employee stock purchase plan


121,148







93



















93Balance as of December 31, 2003


9,347,585



9



302,427



(79
)


(221
)


(2
)


(261,091
)


41,043Unrealized loss on short-term
    investments






















(28
)






(28
)Net loss


























(4,404
)


(4,404
)Comprehensive loss






























(4,432
)Exercise of stock options


936,991



1



2,047



















2,048Amortization of deferred stock
    compensation


















204











204Reversal of deferred stock
    compensation due to forfeited options










(17
)






17











Issuance of common stock under
    employee stock purchase plan


215,368







201



















201Balance as of December 31, 2004


10,499,944



10



304,658



(79
)






(30
)


(265,495
)


39,064Unrealized loss on short-term
    investments






















(33
)






(33
)Net loss


























(874
)


(874
)Comprehensive loss






























(907
)Exercise of stock options


793,444



1



4,339



















4,340Issuance of common stock under
    employee stock purchase plan and other


65,428







586



















586Balance as of December 31, 2005


11,358,816


$
11


$
309,583


$
(79
)

$



$
(63
)

$
(266,369
)

$
43,083    51




---



##### Table of Contents



ENDWAVE
    CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS  Year Ended
    December 31,2005


2004


2003(In thousands)Operating activities:Net loss

$
(874
)

$
(4,404
)

$
(7,910
)Adjustments to reconcile net loss
    to net cash provided by (used in) operating activities:In-process research and development






320



Depreciation


1,465



1,619



2,444Restructuring charge, net


(46
)


(4
)


304Loss (recovery) on building sublease






(359
)


662Impairment of long-lived assets and
    other






389



2,589Amortization of intangible assets


631



369



Compensation recognized under
    employee stock plans










124Amortization of deferred stock
    compensation






204



672Gain on the sale of land and
    equipment


(159
)


(535
)


(260
)Changes in operating assets and
    liabilities:Accounts receivable


(1,799
)


(1,493
)


(2,480
)Inventories


(5,582
)


610



3,665Other assets


(55
)


160



134Accounts payable


(633
)


400



1,050Accrued warranty


(1,231
)


(1,456
)


252Accrued compensation, restructuring
    and other current and long term liabilities


1,099



(790
)


(1,025
)Net cash provided by (used in)
    operating activities


(7,184
)


(4,970
)


221Investing activities:Cash paid in business combinations


(20
)


(6,067
)


Purchases of equipment


(416
)


(460
)


(8
)Proceeds on sale of property and
    equipment


30



5,115



382Decrease (increase) in restricted
    cash


(25
)


778



782Purchases of short term investments


(14,380
)


(15,387
)


(31,080
)Proceeds on maturities of
    short-term investments


20,717



17,920



31,256Net cash provided by investing
    activities


5,906



1,899



1,332Financing activities:Payments on capital lease
    obligations










(1,259
)Payments on notes payable






(778
)


(496
)Proceeds from exercises of stock
    options


4,340



2,048



493Proceeds from issuance of stock


586



201



93Net cash provided by (used in)
    financing activities


4,926



1,471



(1,169
)Net increase (decrease) in cash and
    cash equivalents


3,648



(1,600
)


384Cash and cash equivalents at
    beginning of year


4,808



6,408



6,024Cash and cash equivalents at end of
    year

$
8,456


$
4,808


$
6,408Supplemental disclosure of cash
    flow information:Cash paid for interest

$



$
19


$
112    52




---



##### 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 alternating increasing and decreasing signals at
    specific intervals;
    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
    Reclassification
    Use of
    Estimates
    Revenue
    Recognition
   53




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Warranty
          2005


2004(In thousands)Balance at January 1

$
4,488


$
5,835Warranties accrued


700



707Warranties settled or reversed


(1,931
)


(2,054
)Balance at December 31

$
3,257


$
4,488   Allowance
    for Doubtful Accounts
   54




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Cash
    Equivalents and Short-Term Investments
    available-for-sale Available-for-sale other-than-temporary
  Restricted
    Cash
    Inventory
    Valuation
  first-in,
  Property
    and Equipment
    DepreciableLifeSoftware


3 yearsLeasehold improvements


3 yearsMachinery and equipment


5 to 7 years   Goodwill
    and Intangible Assets
   55




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Impairment
    of Long-Lived Assets
        held-for-sale
  Income
    Taxes
    Restructuring
    Charges
  No. 94-3, (EITF 94-3) EITF 94-3
  EITF 94-3. EITF 94-3
  Stock-Based
    Compensation
   56




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 96-18,
    Year Ended
    December 31,2005


2004


2003Stock Option PlansExpected dividend yield


0.0
%


0.0
%


0.0
%Expected stock price volatility


78
%


82
%


116
%Risk free interest rate


4.04
%


3.36
%


4.02
%Expected life of options in years


5 years



5 years



7 years       Year Ended
    December 31,2005


2004


2003Employee Stock Purchase
    PlanExpected dividend yield


0.0
%


0.0
%


0.0
%Expected stock price volatility


72
%


79
%


112
%Risk free interest rate


3.58
%


1.57
%


1.16
%Expected life of options in years


0.5 years



0.5 years



0.5 years      57




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended
    December 31,2005


2004


2003(In millions, except per share
    data)Net loss, as reported

$
(0.9
)

$
(4.4
)

$
(7.9
)Add: Stock-based employee
    compensation expense included in reported net loss


0.0



0.2



0.8Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for stock option awards and employee stock purchase rights


(8.0
)


(2.9
)


(3.9
)Net loss, pro forma

$
(8.9
)

$
(7.1
)

$
(11.0
)Basic and diluted net loss per
    share, as reported

$
(0.08
)

$
(0.45
)

$
(0.87
)Basic and diluted net loss per
    share, pro forma

$
(0.81
)

$
(0.72
)

$
(1.20
)       Research
    and Development Expenses
    Concentration
    of Risk
       58




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              Fair
    Value of Financial Instruments
     59




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2005Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Short-term investments:Commercial paper

$
3,618


$



$
(40
)

$
3,578Government agency obligations


10,404







(23
)


10,381Total

$
14,022


$



$
(63
)

$
13,959Cash equivalents:Commercial paper

$
1,898


$



$



$
1,898   December 31, 2004Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Short-term investments:Commercial paper

$
2,058


$



$
(2
)

$
2,056Government agency obligations


18,301







(28
)


18,273Total

$
20,359


$



$
(30
)

$
20,329         Comprehensive
    Income (Loss)
  available-for-sale
  Net
    Loss Per Share
   60




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Advertising
    Costs
    Recent
    Accounting Pronouncements
      fair-value-based fair-value-based
   61




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     FAS 115-1 FAS 124-1, Other-Than-Temporary FAS 115-1), other-than-temporary, FAS 115-1 other-than-temporary FAS 115-1 FAS 115-1
  3.
    Goodwill
    and Other Intangible Assets  Goodwill
      Intangible
    Assets
    December 31, 2005Gross Carrying


Accumulated


Net CarryingAmount


Amortization


AmountDeveloped technology

$
2,250


$
(639
)

$
1,611Tradename


1,060







1,060Customer relationships


780



(221
)


559Customer backlog


140



(140
)


Intangible assets

$
4,230


$
(1,000
)

$
3,230   62




---



##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2004Gross Carrying


Accumulated


Net CarryingAmount


Amortization


AmountDeveloped technology

$
2,250


$
(187
)

$
2,063Tradename


1,060







1,060Customer relationships


780



(65
)


715Customer backlog


140



(117
)


23Intangible assets

$
4,230


$
(369
)

$
3,861         Years Ending
    December 31,2006

$
6062007


6062008


6062009


352Total

$
2,170   4.
    Inventories    2005


2004Raw materials

$
10,181


$
7,139Work in process


1,509



432Finished goods


1,758



295Total

$
13,448


$
7,866  63




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Property
    and Equipment    2005


2004Machinery and equipment

$
11,032


$
10,735Software


618



574Leasehold improvements


93



7911,743



11,388Less accumulated depreciation


(10,422
)


(8,994
)Property and equipment, net

$
1,321


$
2,394     6.
    Restructuring
    Charges, Net and Loss on Sublease  No. 95-3,
  Third Quarter 2004
    Plan

Severance Benefits(In thousands)Restructuring charge

$
431Cash payments


(238
)Accrual at December 31, 2004


193Cash payments


(147
)Restructuring charge adjustment


(46
)Accrual at December 31, 2005

$
    64




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Loss
    on Sublease
    7.
    Segment
    Disclosures    2005


2004


2003United States

$
8,917



18.3
%

$
6,538



19.7
%

$
8,375



24.8
%Finland


23,717



48.8
%


18,545



55.9
%


20,083



59.3
%Italy


7,754



15.9
%


1,672



5.0
%


1,271



3.8
%Singapore


1,022



2.0
%


3,274



9.9
%


35



0.1
%Rest of the world


7,325



15.0
%


3,133



9.5
%


4,083



12.0
%Total

$
48,735



100.0
%

$
33,162



100.0
%

$
33,847



100.0
%     8.
    Stockholders
    Equity  Preferred
    Stock
   65




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Common
    Stock
    Shareholder
    Rights Plan
          Employee
    Stock Purchase Plan
    Stock
    Option Plans
     66




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Non-Employee
    Directors Stock Option Plan
      Weighted-AverageNumber of


ExerciseShares


PriceOutstanding at December 31,
    2002


2,325,751


$
3.82Options granted


725,574



1.84Options exercised


(211,776
)


2.34Options cancelled


(917,388
)


3.86Outstanding at December 31,
    2003


1,922,161



3.22Options granted


705,025



10.51Options exercised


(936,991
)


2.18Options cancelled


(101,835
)


11.44Outstanding at December 31,
    2004


1,588,360



6.55Options granted


561,650



23.21Options exercised


(793,444
)


5.47Options cancelled


(63,689
)


12.18Outstanding at December 31,
    2005


1,292,877


$
14.19  67




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Options Outstanding at
    December 31, 2005


December 31, 2005Weighted-AverageWeighted-Average


Remaining





Weighted-AverageExercise Price per
    Share

Shares


Exercise Price


Contractual Life


Shares


Exercise Price$ 0.76 - $ 1.17


65,857


$
1.00



6.95



21,988


$
0.92$ 1.18 - $ 1.21


26,146


$
1.21



6.58



22,968


$
1.21$ 1.93 - $ 1.93


175,163


$
1.93



7.43



53,867


$
1.93$ 2.68 - $ 4.80


14,847


$
4.04



6.33



9,594


$
3.99$ 5.00 - $ 9.82


43,278


$
8.42



8.13



8,868


$
7.96$10.20 - $10.20


168,688


$
10.20



8.59



21,096


$
10.20$10.22 - $10.22


193,813


$
10.22



8.09



28,995


$
10.22$10.50 - $20.32


226,746


$
14.08



9.16



22,869


$
13.75$21.47 - $21.47


204,039


$
21.47



9.09



204,039


$
21.47$24.00 - $56.00


174,300


$
35.65



9.26



174,300


$
35.651,292,877


$
14.19



8.46



568,584


$
20.54     Deferred
    Stock Compensation
    9.
    Commitments
    and Contingencies  Commitments
      Years Ending
    December 31,2006

$
4562007


3082008


3002009


105Total

$
1,169  68




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Contingencies
    10.
    Related
    Party Transactions        11.
    Income
    Taxes         69




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2005


2004Deferred tax assets:Net operating loss carryforwards

$
70,000


$
64,300Research credit


2,700



2,400Capitalized research and
    development


500



1,100Other


5,100



4,400Total deferred tax assets


78,300



72,200Valuation allowance for deferred
    tax assets


(77,000
)


(70,700
)Deferred tax assets


1,300



1,500Deferred tax liabilities:Intangible assets


(1,300
)


(1,500
)Net deferred tax assets
    (liabilities)

$



$
       2005


2004


2003Income tax benefit at statutory
    rate


(35
)%


(35
)%


(35
)%State, net of federal effect


(6
)


(6
)


(6
)Change in valuation allowance


41



36



37Nondeductible deferred compensation






5



4Effective income tax rate



%



%



%   12.
    401(k)
    Plan    13.
    Business
    Combinations     70




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##### Table of Contents



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

$
1,057Liabilities assumed


(655
)In-process research and development


320Developed technology


2,250Tradename


1,060Customer relationships and backlog


920Other


1,261Goodwill


1,546Deferred tax liability


(1,692
)Total purchase price

$
6,067    71




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##### Table of Contents



ENDWAVE
    CORPORATION
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Pro
    forma financial information
    Year Ended
    December 31,2004


2003Total revenues

$
36,422


$
40,420Net loss

$
(6,564
)

$
(13,084
)Net loss per
    share  basic and diluted

$
(0.67
)

$
(1.43
)       15.
    Quarterly
    Financial Information (unaudited)  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(In thousands, except per share
    data)2005:Total revenues

$
9,100


$
12,242


$
14,320


$
13,073Cost of product revenues


6,288



8,072



9,782



9,444Net income (loss)(1)


(847
)


318



(193
)


(152
)Basic net income (loss) per share

$
(0.08
)

$
0.03


$
(0.02
)

$
(0.01
)Diluted net income (loss) per share

$
(0.08
)

$
0.03


$
(0.02
)

$
(0.01
)2004:Total revenues

$
6,617


$
7,576


$
7,594


$
11,375Cost of product revenues


3,971



5,257



5,482



7,866Net income (loss)(2)


(2,179
)


(429
)


(2,034
)


238Basic net income (loss) per share

$
(0.23
)

$
(0.04
)

$
(0.21
)

$
0.02Diluted net income (loss) per share

$
(0.23
)

$
(0.04
)

$
(0.21
)

$
0.02     (1)
    
    Net income (loss) for the first quarter, second quarter, third
    quarter and fourth quarter of 2005 includes net charges of
    $175,000, $106,000, $925,000 and $230,000, respectively, for a
    restructuring benefit, amortization of intangible assets and
    expensing of transaction costs for a suspended secondary
    offering.(2)
    
    Net income (loss) for the first quarter, third quarter and
    fourth quarter of 2004 includes charges of $2.5 million,
    $853,000 and $221,000, respectively, for restructuring
    activities, asset impairments, recovery on sublease agreements,
    amortization of intangible assets, and in-process research and
    development. 72




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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
   73




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    Internal Control  Integrated Framework
                74




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##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Name

Age

PositionEdward A. Keible, Jr.


62


Chief Executive Officer, President
    and DirectorJulianne M. Biagini


43


Chief Financial Officer, Executive
    Vice President and SecretaryJohn J. Mikulsky


60


Chief Operating Officer and
    Executive Vice PresidentBrett W. Wallace


41


Executive Vice PresidentEdward C.V. Winn(1)(2)


67


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


54


DirectorJohn F. McGrath, Jr.(1)


41


DirectorWade Meyercord(2)(3)


65


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.
  Julianne M. Biagini
  John J. Mikulsky
 75




---



##### Table of Contents



Brett W. Wallace
  Edward C.V. Winn
  Joseph J. Lazzara
  John F. McGrath, Jr.
  Wade Meyercord e-commerce and/or
     76




---



##### Table of Contents



Section 16(a)
    Beneficial Ownership Reporting Compliance
      
    one report was timely filed by Ms. Sharer, a former
    director, but reported an incorrect ending total, which was
    subsequently corrected on one Form 4/A amending the
    previous Form 4 report;
    one report, covering one transaction, was filed late by
    Mr. Mikulsky;
    one report, covering one transaction, was filed late by
    Mr. Keible; three reports were timely filed by
    Mr. Edward Keible, but reported incorrect ending totals,
    and were subsequently corrected on three Form 4/A amending the
    previous Forms 4; and
    one report, covering one transaction, was filed late by
    Ms. Biagini.  Committees
    of the Board of Directors
    Audit
    Committee
   77




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##### Table of Contents



Compensation
    Committee
    Nominating
    and Governance Committee
    Code of
    Business Conduct and Ethics
       78




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##### Table of Contents



Item 11.
    Executive
    Compensation  Compensation
    of Executive Officers
  Regulation S-K
  Summary
    Compensation Table
  Long-Term CompensationAnnual Compensation(1)


AwardsSecuritiesSalary





Underlying


All OtherName and Principal
    Position

Year


($)


Bonus($)


Options(#)


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


2005



340,600



170,000



75,000



459President and Chief Executive
    Officer


2004



327,231



40,000



118,000



3352003



318,000



95,400



110,777



1,974Julianne M. Biagini(3)


2005



213,100



80,000



30,000



409Chief Financial Officer,


2004



204,231



20,000



60,000



363Executive Vice President and
    Corporate Secretary


2003



195,000



48,750



46,659



963John J. Mikulsky(4)


2005



241,000



90,000



45,000



459Chief Operating Officer


2004



231,462



20,000



60,000



420and Executive Vice President


2003



225,000



56,250



55,799



1,573     (1)
    
    In accordance with rules promulgated by the Securities and
    Exchange Commission, other annual compensation in the form of
    perquisites and other personal benefits has been omitted where
    the aggregate amount of such perquisites and other personal
    benefits constitutes less than the lesser of $50,000 or 10% of
    the total annual salary and bonus for the Named Officer for the
    fiscal year.(2)
    
    All Other Compensation represents group life insurance payments
    made by Endwave in the amounts of $459, $335 and $1,974 for
    2005, 2004 and 2003, respectively.(3)
    
    All Other Compensation represents group life insurance payments
    made by Endwave in the amounts of $409, $363 and $963 for 2005,
    2004 and 2003, respectively.(4)
    
    All Other Compensation represents group life insurance payments
    made by Endwave in the amounts of $459, $420 and $1,573 for
    2005, 2004 and 2003, respectively. 79




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##### Table of Contents



Option
    Grants in 2005
  Number of











Potential RealizableSecurities


% of Total








Value at AssumedUnderlying


Options








Annual Rates of StockOptions


Granted to








Price Appreciation forGranted


Employees in


Exercise


Expiration


Option Term ($)(2)Name

(#)(1)


Fiscal Year (%)


Price ($/Sh)


Date


5%


10%Edward A. Keible, Jr


37,500



7.22



34.89



7/31/15



822,545



2,084,3274,657



0.90



21.47



2/03/15



62,859



159,28432,843



6.33



21.47



2/03/15



443,305



1,123,333Julianne M. Biagini


15,000



2.89



34.89



7/31/15



329,018



833,73110,343



1.99



21.47



2/03/15



139,607



3537634,657



0.90



21.47



2/03/15



62,859



159,284John J. Mikulsky


30,000



5.78



34.89



7/31/15



658,036



1,667,4614,657



0.90



21.47



2/03/15



62,859



159,28410,343



1.99



21.47



2/03/15



139,607



353,763     (1)
    
    Options granted under our 2000 Equity Incentive Plan and under
    our 1992 Stock Option Plan vest in accordance with the terms of
    the applicable option grant and the terms of our Executive
    Officer Severance and Retention Plan, detailed in
    Employment, Severance and Change in Control
    Agreements below.(2)
    
    The potential realizable value is based on the term of the
    option at its time of grant. It is calculated by assuming that
    the stock price on the date of grant appreciates at the
    indicated rate, compounded annually for the entire term of the
    option and the option is exercised solely on the last day of its
    term for the appreciated price. These amounts represent certain
    assumed rates of appreciation less the exercise price, in
    accordance with the rules of the Securities and Exchange
    Commission, and do not reflect our estimate or projection of
    future stock price performance. Actual gains, if any, are
    dependent on the actual future performance of our common stock
    and no gain to the optionee is possible unless the stock price
    increases over the option term, which will benefit all
    stockholders.  Aggregated
    Option Exercises in Last Fiscal Year and Year-End Option
    Values
  Number of Securities


Value of UnexercisedValue


Underlying Unexercised


In-the-Money Options atShares Acquired


Realized


Options at FY-End (#)


FY-End ($)Name

on Exercise (#)


($)


Exercisable/Unexercisable


Exercisable/UnexercisableEdward A. Keible, Jr


114,807



2,441,122



201,569/0



1,384,070/0Julianne M. Biagini


140,379



3,644,307



68,126/0



289,500/0John J. Mikulsky


160,228



4,587,984



109,677/0



628,596/0   in-the-money.
  Compensation
    of Non-Employee Directors
   80




---



##### Table of Contents



Annual Retainer

$
10,000Board Chair Annual Retainer

$
10,000Audit Committee Chair Annual
    Retainer

$
10,000Compensation Committee Chair
    Annual Retainer

$
5,000Nominating and Governance
    Committee Chair Annual Retainer

$
3,000Director Meeting Fee (in person)

$
1,000Director Meeting Fee (telephonic)

$
500Audit or Compensation Committee
    Meeting Fee (in person)

$
1,000Audit or Compensation Committee
    Meeting Fee (telephonic)

$
500       Employment,
    Severance and Change in Control Agreements
   81




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##### Table of Contents



Compensation
    Committee Interlocks and Insider Participation
   82




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  c/o Endwave
  Shares BeneficiallyOwned(1)Name and Address

Number


Percent(2)Entities affiliated with Wood
    River Management LLC(3)


4,171,477



36.71
%c/o Arthur Steinberg, Esq,Kaye Scholer LLP425 Park AvenueNew York, NY 10022Entities affiliated with EagleRock
    Capital Management(4)


953,916



8.39551 Fifth Avenue,
    34th FloorNew York, NY 10176Entities affiliated with Potomac
    Capital Management


764,578



6.75825 Third AvenueNew York, NY 10022Edward A. Keible, Jr.(5)


287,087



2.47Julianne M. Biagini(6)


122,827



1.07John J. Mikulsky(7)


195,201



1.70Edward C.V. Winn(8)


12,758



*Joseph J. Lazzara(8)


5,193



*John F. McGrath, Jr.(8)


4,153



*Wade Meyercord(8)


4,661



*Carol Herod Sharer(9)


7,758



*All directors and executive
    officers as a group (8 persons)(10)


639,638



5.37     *
    
    Less than one percent.  (1)
    
    This table is based upon information supplied to us by our
    officers, directors and principal stockholders and upon any
    Schedules 13D or 13G filed with the Securities and Exchange.
    Unless otherwise indicated in the footnotes to this table, and
    subject to community property laws where applicable, we believe
    that each of the stockholders named in this table has sole
    voting and investment power with respect to the shares indicated
    as beneficially owned.(2)
    
    Applicable percentages are based on 11,363,475 shares
    outstanding on February 17, 2006, adjusted as required by
    rules promulgated by the Securities and Exchange Commission.(3)
    
    Includes 2,843,239 shares held by Wood River Partners, L.P.
    (the Partnership) and 1,328,238 shares held by
    Wood River Partners Offshore, Ltd. (the Offshore
    Fund). Wood River Capital Management, L.L.C. (the
    Adviser) is an investment adviser and is the
    management company for the partnership and the Offshore Fund and
    as such may be deemed to beneficially own 4,171,477 shares.
    Wood River Associates, L.L.C. (the General Partner)
    is the general partner of the Partnership and as such may be
    deemed to beneficially own 1,328,238 shares. Pursuant to an
    order of the United States District Court for the Southern
    District of New York dated October 13, 2005, Arthur
    Steinberg, Esq. (the Receiver) was appointed as
    the Receiver of the Wood River Entities. Due to the powers and
    authority conveyed upon the Receiver by the order, the Receiver
    may be deemed to share beneficial ownership of the shares.(4)
    
    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 83




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##### Table of Contents



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.(5)
    
    Includes 276,659 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,
    172,802 shares would be subject to repurchase by us. Also
    includes 10,518 shares held by the Keible Family Trust, of
    which Mr. Keible is co-trustee. Mr. Keibles
    spouse shares voting and investment power over the shares held
    by Mr. Keibles
    father-in-law.(6)
    
    Includes 98,126 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,
    76,004 shares would be subject to repurchase by us.
    Includes 15,342 shares held in escrow and that are subject
    to repurchase.(7)
    
    Includes 139,677 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,
    78,766 shares would be subject to repurchase by us. Also
    includes 600 shares owned by Mr. Mikulskys
    daughter.(8)
    
    Represents shares issuable upon exercise of options exercisable
    within 60 days of the date of this table.(9)
    
    Includes 2,758 shares issuable upon exercise of options
    exercisable within 60 days of the date of this table.(10)
    
    See footnotes 5 through 9 above, as applicable. Includes
    644,638 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,
    327,572 shares would be subject to a repurchase right by us.  Equity
    Compensation Plan Information
    Number of SecuritiesNumber of


Weighted-


Remaining AvailableSecurities to be


Average Exercise


for IssuanceIssued Upon


Price of


Under EquityExercise of


Outstanding


Compensation PlansOutstanding Options,


Options,


(Excluding SecuritiesWarrants and


Warrants and


Reflected inPlan Category

Rights(a)


Rights(b)


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


1,292,877


$
14.19



1,551,170
(2)Equity compensation plans not
    approved by security holders


0



0



0Total


1,292,877


$
14.19



1,551,170     (1)
    
    Each year on October 17, starting 2001 and continuing
    through 2005, the aggregate number of shares of common stock
    that may be issued pursuant to stock awards under the 2000
    Equity Incentive Plan is automatically increased by the lesser
    of 3,000,000 shares or 6% of the total number of shares of
    common stock outstanding on that date or such lesser amount as
    may be determined by the Board of Directors. In addition, each
    year on October 17, starting in 2001 and continuing through
    2005, the aggregate number of shares of common stock that may be
    issued pursuant to stock awards under the 2000 Employee Stock
    Purchase Plan is automatically increased by the lesser of
    350,000 shares or 1.5% of the total number of shares of
    common stock outstanding on that date or such lesser amount as
    may be determined by the Board of Directors.(2)
    
    Includes 258,293 shares issuable under the 2000 Employee
    Stock Purchase Plan.  Item 13.
    Certain
    Relationships and Related Transactions  Indemnification
   84




---



##### Table of Contents



Transactions
    with Northrop Grumman Corporation
          Item 14.
    Principal
    Accounting Fees and Services    2004


2005Audit Fees(1)

$
183


$
464Tax Fees(2)


0



0All Other Fees(3)


0



96Total

$
183


$
560    85




---



##### Table of Contents



(1)
    
    Audit fees represent fees for professional services provided in
    connection with the audit of our annual consolidated financial
    statements and review of our quarterly condensed consolidated
    financial statements.(2)
    
    Tax fees consisted primarily of income tax compliance and
    related services.(3)
    
    Represents fees for services provided in connection with other
    miscellaneous items not otherwise included in the categories
    above including $96,000 related to the filing of a registration
    statement on
    Form S-3
    in fiscal 2005.    Audit
    Committee Pre-Approval Policy
    Item 15.
    Exhibits
    and Financial Statement Schedules                          Number

Description2
.1(1)

Asset Purchase Agreement by and
    among M/A-COM Tech, Inc., Tyco Electronics Logistics AG and the
    Registrant dated April 24, 2001.2
.2(2)

Asset Purchase Agreement by and
    among Signal Technology Corporation and the Registrant dated
    September 24, 2002.2
.3(3)

Purchase and Sale Agreement by and
    Among New Focus, Inc., Bookham Technology PLC and the Registrant
    dated July 21, 2004.3
.1(4)

Amended and Restated Certificate
    of Incorporation effective October 20, 2000.3
.2(5)

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

Amended and Restated Bylaws
    effective October 20, 2000.3
.4(12)

Certificate of Designation for
    Series A Junior Participating Preferred Stock.4
.1(4)

Form of specimen Common Stock
    Certificate. 86




---



##### Table of Contents



Number

Description4
.2(11)

Amended and Restated Registration
    Rights Agreement by and between Northrop Grumman
    Space & Mission Systems Corp. and the Registrant dated
    September 14, 2005.4
.3(12)

Rights Agreement dated as of
    December 1, 2005 between Endwave Corporation and
    Computershare Trust Company, Inc.4
.4(12)

Form of Rights Certificate10
.1(4)

Form of Indemnity Agreement
    entered into by the Registrant with each of its directors and
    officers.10
.2(4)*

1992 Stock Option Plan.10
.3(4)*

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

Form of Nonstatutory Stock Option
    under 1992 Stock Option Plan.10
.5(4)*

2000 Equity Incentive Plan, as
    amended.10
.6(4)*

Form of Stock Option Agreement
    under 2000 Equity Incentive Plan.10
.7(4)*

2000 Employee Stock Purchase Plan.10
.8(4)*

Form of 2000 Employee Stock
    Purchase Plan Offering.10
.9*

2000 Non-Employee Directors
    Stock Option Plan, as amended.10
.10(4)*

Form of Nonstatutory Stock Option
    Agreement under the 2000 Non-Employee Director Plan.10
.11(7), (13)*

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

2006 Base Salaries for Named
    Executive Officers.10
.13(13)*

2006 Executive Incentive
    Compensation Plan.10
.14(8)*

Executive Officer Severance and
    Retention Plan.10
.15(8)*

Transaction Incentive Plan.10
.16(4)

License Agreement by and between
    TRW Inc. and TRW Milliwave Inc. dated February 28, 2000.10
.17(4)

Production Agreement by and
    between TRW Inc. and the Registrant dated March 31, 2000
    for the performance of the Development Agreement by and between
    TRW Inc. and Nokia Telecommunications OY dated January 28,
    1999.10
.18(4)

Services Agreement by and between
    TRW Inc. and the Registrant dated March 31, 2000.10
.19(9)

Development Agreement by and
    between Nokia and the Registrant dated August 14, 2003.10
.20(10)

Purchase Agreement by and between
    Nokia Corporation and the Registrant dated December 31,
    2003.10
.21(5)

Industrial Lease by and between
    The Irvine Company and the Registrant dated January 28,
    2004.10
.22(5)

Amended and Restated Supply
    Agreement by and between Northrop Grumman Space and Mission
    Systems Corp. and the Registrant dated March 26, 2004.10
.23(6)

Settlement and Release Agreement
    by and between Northrop Grumman Space & Mission Systems
    Corp. and the Registrant dated March 23, 2005.10
.24

Purchase Agreement between Nokia
    and Endwave Corporation dated January 1, 2006.10
.25

Frame Purchase Agreement by and
    between Endwave Corporation and Siemens Mobile Communications
    Spa dated January 16, 2006.23
.1

Consent of Burr, Pilger &
    Mayer LLP, independent registered public accounting firm.23
.2

Consent of Ernst & Young
    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.    87




---



##### Table of Contents



(1)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    May 8, 2001 and incorporated herein by reference.(2)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    October 11, 2002 and incorporated herein by reference.(3)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    August 4, 2004 and incorporated herein by reference.(4)
    
    Previously filed with the Registrants Registration
    Statement on
    Form S-1
    (Registration
    No. 333-41302)
    and incorporated herein by reference.(5)
    
    Previously filed with the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2004 and incorporated
    herein by reference.(6)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    March 25, 2005 and incorporated herein by reference.(7)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    February 3, 2005 and incorporated herein by reference.(8)
    
    Previously filed with the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2003 and incorporated
    herein by reference.(9)
    
    Previously filed with an amendment to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2003 filed on
    August 4, 2004 and incorporated herein by reference.(10)
    
    Previously filed with an amendment to the Registrants
    Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2003 filed on
    August 4, 2004 and incorporated herein by reference.(11)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    September 15, 2005 and incorporated herein by reference.(12)
    
    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.(13)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    February 8, 2006 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.   88




---



##### Table of Contents



ENDWAVE
    CORPORATION
   SCHEDULE II
   VALUATION AND QUALIFYING ACCOUNTS
    AdditionsBalance at


Charged to


Deductions


BalancesBeginning


Costs and


and


at End ofof Period


Expense


Write-offs


Period(In thousands)Year ended December 31, 2005

$
243


$
59


$
(6
)

$
296Year ended December 31, 2004

$
284


$
66


$
(107
)

$
243Year ended December 31, 2003

$
324


$
126


$
(166
)

$
284  89




---



##### Table of Contents



SIGNATURES      By:
    /s/  JULIANNE
    M. BIAGINI       POWER OF
    ATTORNEY
  KNOW ALL PERSONS BY THESE PRESENTS, attorneys-in-fact, Form 10-K, attorneys-in-fact,
  Signatures

Title

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

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

March 14, 2006/s/  JULIANNE
    M. BIAGINIJulianne
    M. Biagini

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

March 14, 2006/s/  EDWARD
    C.V. WINNEdward
    C.V. Winn

Chairman of the Board of Directors

March 14, 2006/s/  JOSEPH
    J. LAZZARAJoseph
    J. Lazzara

Director

March 14, 2006/s/  JOHN
    F. MCGRATH, JR.John
    F. McGrath, Jr.

Director

March 14, 2006/s/  WADE
    MEYERCORDWade
    Meyercord

Director

March 14, 2006  90




---



##### Table of Contents



INDEX TO
    EXHIBITS
  Number

Description2
.1(1)

Asset Purchase Agreement by and
    among M/A-COM Tech, Inc., Tyco Electronics Logistics AG and the
    Registrant dated April 24, 2001.2
.2(2)

Asset Purchase Agreement by and
    among Signal Technology Corporation and the Registrant dated
    September 24, 2002.2
.3(3)

Purchase and Sale Agreement by and
    Among New Focus, Inc., Bookham Technology PLC and the Registrant
    dated July 21, 2004.3
.1(4)

Amended and Restated Certificate
    of Incorporation effective October 20, 2000.3
.2(5)

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

Amended and Restated Bylaws
    effective October 20, 2000.3
.4(12)

Certificate of Designation for
    Series A Junior Participating Preferred Stock.4
.1(4)

Form of specimen Common Stock
    Certificate.4
.2(11)

Amended and Restated Registration
    Rights Agreement by and between Northrop Grumman
    Space & Mission Systems Corp. and the Registrant dated
    September 14, 2005.4
.3(12)

Rights Agreement dated as of
    December 1, 2005 between Endwave Corporation and
    Computershare Trust Company, Inc.4
.4(12)

Form of Rights Certificate10
.1(4)

Form of Indemnity Agreement
    entered into by the Registrant with each of its directors and
    officers.10
.2(4)*

1992 Stock Option Plan.10
.3(4)*

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

Form of Nonstatutory Stock Option
    under 1992 Stock Option Plan.10
.5(4)*

2000 Equity Incentive Plan, as
    amended.10
.6(4)*

Form of Stock Option Agreement
    under 2000 Equity Incentive Plan.10
.7(4)*

2000 Employee Stock Purchase Plan.10
.8(4)*

Form of 2000 Employee Stock
    Purchase Plan Offering.10
.9*

2000 Non-Employee Directors
    Stock Option Plan, as amended.10
.10(4)*

Form of Nonstatutory Stock Option
    Agreement under the 2000 Non-Employee Director Plan.10
.11(7), (13)*

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

2006 Base Salaries for Named
    Executive Officers.10
.13(13)*

2006 Executive Incentive
    Compensation Plan.10
.14(8)*

Executive Officer Severance and
    Retention Plan.10
.15(8)*

Transaction Incentive Plan.10
.16(4)

License Agreement by and between
    TRW Inc. and TRW Milliwave Inc. dated February 28, 2000.10
.17(4)

Production Agreement by and
    between TRW Inc. and the Registrant dated March 31, 2000
    for the performance of the Development Agreement by and between
    TRW Inc. and Nokia Telecommunications OY dated January 28,
    1999.10
.18(4)

Services Agreement by and between
    TRW Inc. and the Registrant dated March 31, 2000.10
.19(9)

Development Agreement by and
    between Nokia and the Registrant dated August 14, 2003.10
.20(10)

Purchase Agreement by and between
    Nokia Corporation and the Registrant dated December 31,
    2003.10
.21(5)

Industrial Lease by and between
    The Irvine Company and the Registrant dated January 28,
    2004.10
.22(5)

Amended and Restated Supply
    Agreement by and between Northrop Grumman Space and Mission
    Systems Corp. and the Registrant dated March 26, 2004. 91




---



##### Table of Contents



Number

Description10
.23(6)

Settlement and Release Agreement
    by and between Northrop Grumman Space & Mission Systems
    Corp. and the Registrant dated March 23, 2005.10
.24

Purchase Agreement between Nokia
    and Endwave Corporation dated January 1, 2006.10
.25

Frame Purchase Agreement by and
    between Endwave Corporation and Siemens Mobile Communications
    Spa dated January 16, 2006.23
.1

Consent of Burr, Pilger &
    Mayer LLP, independent registered public accounting firm.23
.2

Consent of Ernst & Young
    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
    May 8, 2001 and incorporated herein by reference.(2)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    October 11, 2002 and incorporated herein by reference(3)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    August 4, 2004 and incorporated herein by reference.(4)
    
    Previously filed with the Registrants Registration
    Statement on
    Form S-1
    (Registration
    No. 333-41302)
    and incorporated herein by reference.(5)
    
    Previously filed with the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2004 and incorporated
    herein by reference.(6)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    March 25, 2005 and incorporated herein by reference.(7)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    February 3, 2005 and incorporated herein by reference.(8)
    
    Previously filed with the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2003 and incorporated
    herein by reference.(9)
    
    Previously filed with an amendment to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2003 filed on
    August 4, 2004 and incorporated herein by reference.(10)
    
    Previously filed with an amendment to the Registrants
    Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2003 filed on
    August 4, 2004 and incorporated herein by reference.(11)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    September 15, 2005 and incorporated herein by reference.(12)
    
    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.(13)
    
    Previously filed as an exhibit to the Registrants Current
    Report on Form
    8-K filed on
    February 8, 2006 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. 92