ENDWAVE CORP, S-1, 2000-07-12

ENDWAVE CORP
S-1, 2000-07-12

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<S><C>
As filed with the Securities and Exchange Commission on July 12, 2000
Registration No. 333-
====================================================================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------
ENDWAVE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 3663 95-4333817
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
----------------------------------
321 SOQUEL WAY
SUNNYVALE, CALIFORNIA 94085
(408) 737-7300
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
----------------------------------
Edward A. Keible, Jr.
President and Chief Executive Officer
321 Soquel Way
Sunnyvale, California 94085
(408) 737-7300
(Name, address, including zip code, and telephone number, including area code, of agent for service)
----------------------------------

Copies to:
Kenneth L. Guernsey Kenneth R. Lamb
Jodie M. Bourdet John B. Stone
Gregg W. Corso Kelly Dodge
Esme C. Smith Gibson, Dunn & Crutcher LLP
Jason S. Throne One Montgomery Street
Cooley Godward llp Telesis Tower, 31st Floor
One Maritime Plaza, 20th Floor San Francisco, California 94104
San Francisco, California 94111 (415) 393-8200
(415) 693-2000
-----------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
----------------------------------
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, check the following box. / /
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration
statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /
-----------------------------------

CALCULATION OF REGISTRATION FEE
===================================================================================================================================
TITLE OF SECURITIES PROPOSED MAXIMUM AGGREGATE
TO BE REGISTERED OFFERING PRICE (1) AMOUNT OF REGISTRATION FEE
====================================================================================================================================
------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par value per share $115,000,000 $30,360
====================================================================================================================================
(1) Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457 under the
Securities Act of 1933, as amended.
-----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

====================================================================================================================================
</TABLE>
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The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is declared effective. This
preliminary prospectus is not an offer to sell these securities and we are not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.

Subject to Completion, Dated , 2000

[endwave logo]

-------------------------------------------------------------------------------
SHARES
COMMON STOCK

-------------------------------------------------------------------------------

This is the initial public offering of Endwave Corporation and we are offering
shares of our common stock. We anticipate the initial public offering price will
be between $ ______ and $ ______ per share. We have applied to list our common
stock on the Nasdaq National Market under the symbol "ENWV."

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Underwriting
Price to Public Discounts and Commissions Proceeds to Endwave
<S> <C> <C> <C>
Per Share $ $ $
Total $ $ $

</TABLE>

We have granted the underwriters the right to purchase up to additional
shares to cover over-allotments.

DEUTSCHE BANC ALEX. BROWN

J.P. MORGAN & CO.

U.S. BANCORP PIPER JAFFRAY

EPOCH PARTNERS

The date of this prospectus is , 2000

<PAGE>

DESCRIPTION OF INSIDE FRONT COVER OF PROSPECTUS:

THE INSIDE FRONT COVER IS ENTITLED "ENDWAVE PRODUCTS" AND HAS FOUR SECTIONS
SHOWING PICTURES OF ENDWAVE'S FOUR DIFFERENT PRODUCT CATEGORIES ALONG WITH A
BRIEF DESCRIPTION OF EACH. THE TEXT FOR EACH SECTION IS AS FOLLOWS:

RF MODULES
o BASIC RF BUILDING BLOCKS FOR BROADBAND WIRELESS SYSTEMS
o ALSO USED FOR RAPID PROTOTYPING

INTEGRATED TRANSCEIVERS
o COMBINED TRANSMIT AND RECEIVE FUNCTIONALITY IN A SINGLE PACKAGE
o SUPPORT MULTIPLE FREQUENCIES AND APPLICATIONS

BROADBAND ANTENNAS
o DIRECTIONAL ANTENNAS USED FOR POINT-TO-POINT AND CELLULAR BACKHAUL
o SYSTEMS AND SUBSCRIBER TERMINALS OF POINT-TO-MULTIPOINT SYSTEMS
SECTOR ANTENNAS USED FOR POINT-TO-MULTIPOINT HUB TERMINALS

OUTDOOR UNITS
o COMPLETE ROOFTOP RF UNITS
o POINT-TO-MULTIPOINT HUB AND SUBSCRIBER UNITS

DESCRIPTION OF GATEFOLD:

The gatefold page is titled "Applications of Endwave Products in
Broadband Wireless Access Systems," and the title appears in a single line
across the top of the page. There is a paragraph directly underneath the title,
which is left justified. The paragraph reads:

Broadband wireless access systems use high frequency radios to link
multiple points in a communications network. These systems enable high
speed data transmissions from a fixed location, such as a corporate
office, to the trunking network, which can be used in either
"point-to-point" or "point-to-multipoint" configurations. They also
enable high speed data transmission from a cellular base station to the
trunking network, which is commonly referred to as "backhaul" and high
speed point-to-point rings called "wireless fiber."

There is a small icon in the bottom left corner of the page that is
labeled "Indicates location of Endwave product." This icon is on top of all
icons representing buildings and the Cell Base Station and represents the
connection point.

Breaking the gatefold page into four quadrants, the pictures in each
quadrant refer to the descriptions stated in the paragraph.

The TOP LEFT QUADRANT is a picture labeled "Point-to-Point Access." The
picture shows two icons, which represent two buildings, connected by a straight
line with a wave in the middle. The left most icon is labeled "Corporate Office"
and has "PTP Access" on top of the line representing the connection. The icon on
the right is labeled "Trunking Network Access Point."

The BOTTOM LEFT QUADRANT is a picture labeled "Point-to-Multipoint Access
Systems." The picture shows four icons, which represent buildings. There are
three icons labeled "PMP Subscriber" and are connected to an icon on the right
side labeled "PMP Hub Station."

The BOTTOM RIGHT QUADRANT is a picture labeled "Cellular Backhaul." The
picture has three icons for cellular phones that are connected by a dotted line
to a circle that is labeled "Cell Base Station."

<PAGE>

The Cell Base Station is connected to an icon on the left side of the quadrant,
representing a building and is labeled "Mobile Telephone Switching Office." The
connection between the Cell Base Station and the Mobile Telephone Switching
Office is labeled "PTP Cellular Backhaul."

The TOP RIGHT QUADRANT is a picture labeled "Point-to-Point Deployed in a
Ring "Wireless Fiber"." The picture shows four icons representing buildings that
are laid in the form of a parallelogram. The buildings are connected to each
other along the sides of the parallelogram by two lines that are labeled "PTP
Access." The left most icon is labeled "Trunking Network Access Point."

The center of the page is labeled "High Capacity Fiber Trunking Network."
There is a line in the shape of the outline of a cloud that has the label "Fiber
Trunking Network" centered about it. The line also encompasses the "Trunking
Network Access Point" icons in the top left and top right quadrant as well as
the "Mobile Telephone Switching Office" and "PMP Hub Station" icons in the
bottom left and bottom right quadrants.

In each of the quadrants there is a dotted quarter circle that
encompasses each of the pictures.

DESCRIPTION OF INSIDE BACK COVER:

The inside back cover is titled "ENDWAVE PATENTED CIRCUIT TECHNOLOGY."
The title is left justified.

Immediately following is a bullet list stating:

o Minimizes use of expensive gallium arsenide

o Fewer bond wires that require tuning

o Well suited for automated high volume manufacturing

Below this list is a boxed diagram with the label "MCIC `FLIP-CHIP'
CIRCUIT" centered above it. Below the diagram are a series of pictures which are
laid out from left to right and have the labels below them stating: "CUSTOM
DESIGNED `FLIP-CHIP' DIE," "CERAMIC SUBSTRATE WITH LITHOGRAPHED CIRCUIT ELEMENTS
AND `BUMPED' DIE BONDING SITE", and "`FLIP' ATTACHED DIE." There are arrows from
the top of each photograph pointing back to a specific point in the MCIC
diagram.

<PAGE>

PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED IN GREATER DETAIL
ELSEWHERE IN THIS PROSPECTUS. THIS SUMMARY MAY NOT CONTAIN ALL OF THE
INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON STOCK. YOU
SHOULD READ THE ENTIRE PROSPECTUS, INCLUDING "RISK FACTORS" AND THE FINANCIAL
STATEMENTS, CAREFULLY BEFORE MAKING AN INVESTMENT DECISION.

OUR BUSINESS

We are a leading provider of radio frequency, or RF, subsystems that
enable the transmission and reception of data signals in high data rate, or
broadband, wireless systems. We sell our products to wireless systems
integrators that provide the broadband wireless equipment used by communications
service providers to offer data services. Our customers use our products in high
speed cellular backhaul, point-to-point access, and point-to-multipoint access
applications. Wireless systems integrators who use our products in their
broadband wireless systems include Allgon, Hughes Network Systems, Nokia, Nortel
Networks, P-Com, Rockwell International, Toshiba America and WinNet MCS.

Demand for high speed data services and the bandwidth limitations of
existing access networks are driving the growth in the broadband wireless access
market. Communications networks consist of subscribers' internal networks; the
trunking network, which transports data aggregated from multiple network points;
and access networks, which link the subscriber networks to the trunking network.
While the trunking and subscriber networks generally support high data
transmission rates, existing access networks are a bottleneck and limit a
communications service provider's ability to offer high speed data services. We
believe that broadband wireless access technologies offer the best solution to
this bottleneck in many networks because they can be deployed faster and more
economically than alternative access technologies. The Strategis Group, an
independent research firm, estimates that the customer premises equipment market
alone will grow from approximately $443 million in 2000 to $5.4 billion in 2004.
This market encompasses sales of the equipment installed at subscribers'
premises to complete the link of a broadband wireless access system to the
subscribers' networks.

We leverage our proprietary technologies and RF design expertise to
design and manufacture products at multiple levels of integration to best meet
our customers' requirements. Our products include RF modules, integrated
transceivers, broadband antennas and outdoor units. We have developed
proprietary circuit technologies that enable us to design RF circuits to
minimize labor costs and the use of expensive gallium arsenide material. Because
we design our own RF circuits, we have the flexibility to optimize our product
designs by not being limited to standard, commercially available gallium
arsenide devices. We do not operate a facility to manufacture these devices.
Instead, we use third-party semiconductor fabrication facilities to manufacture
the gallium arsenide devices we design. Our use of third-party semiconductor
facilities gives us the flexibility to use the process technology that is best
suited for each application and eliminates the need for us to invest in and
maintain our own semiconductor fabrication facilities.

In March 2000, we merged with TRW Milliwave, an RF subsystems supplier
that was a wholly-owned subsidiary of TRW. As a result of the merger, we
substantially increased our customer base and design and manufacturing capacity,
making us one of our industry's largest commercial suppliers of RF subsystems.
In addition, we established a strategic relationship with TRW that includes a
long term supply agreement with TRW for gallium arsenide devices. We also
entered into two agreements with TRW that license to us specified existing TRW
circuit technologies and provide us access to technical support and design
expertise.

We were originally incorporated in California in 1991 and reincorporated
in Delaware in 1995. We changed our name from Endgate Corporation to Endwave
Corporation in connection with our merger with Milliwave. Our principal
executive offices are located at 321 Soquel Way, Sunnyvale, California 94085.
Our telephone number is (408) 737-7300.

1
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THE OFFERING

Common stock offered........................ shares

Common stock outstanding after
this offering............................. shares

Use of proceeds............................. For general corporate purposes and
working capital requirements.

Proposed Nasdaq National Market symbol...... ENWV

The number of shares to be outstanding after the offering is based on the
number of shares of common stock outstanding as of June 30, 2000 and gives
effect to the conversion of all outstanding shares of our preferred stock into
shares of common stock upon the closing of this offering. See "Description of
Capital Stock." This number excludes:

o 4,486,138 shares that we may issue upon exercise of options
outstanding as of June 30, 2000 with a weighted average exercise
price of $4.78 per share; and

o 322,641 shares that we may issue upon the exercise of warrants
outstanding as of June 30, 2000 with a weighted average exercise
price of $7.93 per share. Substantially all of these warrants expire
upon the closing of this offering if not exercised prior to the
closing.

---------------

When we refer to "us," "we," "our" or "Endwave" in this prospectus, we
are referring to Endwave Corporation. When we refer to our business or other
corporate activities prior to March 31, 2000, the date of the merger, we are
generally referring to Endgate's business and corporate activities unless
otherwise specified.

Endwave and the Endwave logo are our trademarks. All other trademarks or
service markes appearing in this prospectus are trademarks or service marks of
the respective companies that own them.

Except where we state otherwise, the information we present in this
prospectus:

o assumes that the underwriters do not exercise their option to
purchase ____ additional shares after the closing of this offering;
and

o gives effect to the conversion of all of our outstanding preferred
stock into common stock upon the closing of this offering.

2
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SUMMARY FINANCIAL DATA
(in thousands, except per share data)

On March 31, 2000, Endgate merged with TRW Milliwave Inc., a wholly-owned
subsidiary of TRW Inc. Endgate was the surviving corporation in the merger and
Milliwave ceased to exist as a separate legal entity. However, because TRW owned
more than half of Endgate's outstanding capital stock immediately after the
merger, Milliwave is treated as the acquiring company for accounting purposes.
As a result, Endgate ceased to be a separate accounting entity as of the date of
the merger, and Endwave's financial statements prior to the merger are those of
Milliwave. Milliwave and Endwave have a fiscal year end of December 31. Prior to
the merger, Endgate's fiscal year end was June 30.

The following table sets forth our statement of operations data for 1999
and the six months ended June 30, 1999 and 2000 on a pro forma basis as if our
merger with Milliwave had been completed on January 1, 1999. The pro forma
statement of operations data excludes an $11.7 million expense for acquired
in-process research and development because it is a non-recurring charge. Pro
forma net loss per share data and pro forma share data used in computing pro
forma net loss per share have been calculated by assuming that all of Endgate's
outstanding shares of preferred stock had been converted, as of their original
issuance dates, into shares of Endgate's common stock.

YEAR ENDED SIX MONTHS ENDED JUNE 30,
DECEMBER 31, ----------------------------------
1999 1999 2000
--------------- ---------------- ----------------
(unaudited) (unaudited)
PRO FORMA STATEMENT OF OPERATIONS DATA:
Revenues:
<S> <C> <C> <C>
Product revenues......................................... $ 13,745 $ 3,829 $ 16,059
Development fees......................................... 1,302 221 2,551
--------------- ---------------- ----------------
Total revenues......................................... 15,047 4,050 18,610
Costs and expenses:
Cost of product revenues................................. 18,499 6,927 23,976
Research and development................................. 10,925 5,431 6,556
Sales and marketing...................................... 1,316 595 1,291
General and administrative............................... 3,870 2,191 2,917
Amortization of goodwill and other intangible assets..... 19,208 9,604 9,604
Amortization of deferred stock compensation.............. 710 -- 1,986
--------------- ---------------- ----------------
Total costs and expenses............................... 54,528 24,748 46,330
Loss from operations........................................ (39,481) (20,698) (27,720)
Interest expense and other, net............................. (585) (638) (324)
--------------- ---------------- ----------------
Net loss.................................................... $ (40,066) $ (21,336) $ (28,044)
=============== ================ ================
Basic and diluted pro forma net loss per share.............. $ (2.18) $ (1.34) $ (1.14)
=============== ================ ================
Shares used to compute pro forma net loss per share, basic
and diluted.............................................. 18,401 15,864 24,623
=============== ================ ================
</TABLE>

3
<PAGE>

The following table is a summary of Endgate's historical statement of
operations data for the fiscal years ended June 30, 1997, 1998 and 1999 and the
nine months ended March 31, 1999 and 2000.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
---------------------------------------- --------------------------
1997 1998 1999 1999 2000
------------ ------------ ------------ ------------ ------------
ENDGATE STATEMENT OF OPERATIONS DATA: (unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Product revenues....................... $1,133 $1,560 $1,084 $875 $2,384
Development fees....................... 239 373 519 458 2,689
Total revenues....................... 1,372 1,933 1,603 1,333 5,073
Cost of product revenues.................. 3,957 4,230 5,836 4,500 9,011
Research and development expenses......... 6,236 6,128 9,824 7,265 8,133
Sales and marketing expenses.............. 474 489 751 531 904
General and administrative expenses....... 1,303 1,528 1,843 1,218 1,548
Loss from operations...................... (10,598) (10,442) (16,651) (12,181) (15,714)
Net loss.................................. $(10,298) $(10,575) $(17,258) $(12,763) $(16,338)
</TABLE>

The following table is a summary of Milliwave's statement of operations
data for the fiscal years ended December 31, 1997, 1998 and 1999 and the six
months ended June 30, 1999 and 2000. Milliwave accounted for the merger with
Endgate using the purchase method of accounting. The data for the six months
ended June 30, 2000 includes the results of operations of Endgate for the three
months ended June 30, 2000 because the merger occurred on March 31, 2000.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------- -------------------------
1997 1998 1999 1999 2000
---------- ------------ ----------- ------------ -----------
MILLIWAVE STATEMENT OF OPERATIONS DATA: (unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Product revenues......................... $5,250 $7,030 $12,419 $3,367 $ 14,537
Development fees......................... -- -- -- -- 946
-- -- -- -- --
---------- ------------ ----------- ------------ ------------
Total revenues......................... 5,250 7,030 12,419 3,367 15,483
Cost of product revenues...................... 4,350 5,992 11,221 3,880 19,196
Research and development...................... 254 286 326 142 3,732
Selling, general and administrative........... 1,222 2,964 2,370 1,352 3,140
Amortization of goodwill and other intangible
assets..................................... 384 1,536 1,536 768 4,689
In-process research and development........... -- -- -- -- 11,700
Loss from operations.......................... (960) (3,748) (3,034) (2,775) (28,976)
Net loss...................................... $(761) $(2,898) $(2,516) $(2,075) $ (27,996)
</TABLE>

4
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The following table summarizes our balance sheet as of June 30, 2000:

o on an actual basis;

o on a pro forma basis to reflect the conversion of our preferred stock
into common stock upon the closing of this offering; and

o on the same pro forma basis, as adjusted to reflect the sale of _____
shares of common stock in this offering at an estimated initial
public offering price of $___ per share, after deducting underwriting
discount and commissions and estimated offering expenses.

<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
(UNAUDITED)
---------------------------------
ACTUAL PRO FORMA PRO FORMA
AS ADJUSTED
------- --------- -----------
<S> <C> <C> <C>
ENDWAVE BALANCE SHEET DATA:
Cash and cash equivalents......................................... $36,918 $36,918
Working capital................................................... 36,588 36,588
Goodwill and other intangible assets.............................. 104,376 104,376 104,376
Total assets...................................................... 181,027 181,027
Long term obligations, less current portion....................... 1,596 1,596 1,596
Total stockholders' equity........................................ 156,541 156,541
</TABLE>

<PAGE>

RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING OUR COMMON STOCK.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. THE RISKS AND
UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES THAT WE FACE. ADDITIONAL
RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY BELIEVE
ARE IMMATERIAL ALSO MAY IMPAIR OUR BUSINESS. IF ANY OF THE FOLLOWING RISKS
OCCURS, OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE
SERIOUSLY IMPAIRED. IN ADDITION, THE TRADING PRICE OF OUR COMMON STOCK COULD
DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.

RISKS RELATED TO OUR BUSINESS

WE EXPECT TO CONTINUE INCURRING OPERATING LOSSES AND MAY NOT BE PROFITABLE IN
THE FUTURE.

We have not achieved profitability. We cannot predict whether we will
achieve or sustain profitability. Our failure to achieve profitability within
the time frame that investors expect may cause the market price of our common
stock to decline. On a pro forma basis giving effect to our merger with
Milliwave, we had operating losses of $27.7 million in the six months ended June
30, 2000 and $39.5 million in 1999.

Our cost of product revenues has exceeded our product revenues due in
part to the historically low volumes of products we have sold and our
investments in increasing manufacturing capacity. We cannot assure you that we
will increase our revenues or attain or maintain positive gross margins on
product revenues.

The development of our technologies and products has required significant
expenditures to hire and retain our research and development staff. In addition,
many of our major customers typically require high levels of product
customization that generally requires the commitment of significant research and
development resources. Following this offering, we intend to significantly
increase expenditures in all areas, including research and development, to
execute our business strategy. As a result of these and other factors, we expect
to continue to incur significant quarterly losses for at least the next several
quarters. If our revenues fail to grow at anticipated rates or if our expenses
increase faster than we anticipate, our losses may increase and we may not
become profitable.

BECAUSE WE HAVE A LIMITED OPERATING HISTORY, YOU MAY HAVE DIFFICULTY EVALUATING
OUR BUSINESS AND FUTURE PROSPECTS.

We were founded in 1992. From 1994 through 1999, we focused primarily on
providing RF modules, transceivers and antennas to wireless systems integrators
and equipment manufacturers. Our outdoor units are designed for the
point-to-multipoint market, which did not emerge until recently. These outdoor
units have been purchased primarily for site demonstrations and initial
commercial deployments. We shipped our first outdoor units for a system trial in
August 1998. We received the first commercial order for these products in
December 1999. Furthermore, because our merger with Milliwave occurred in March
2000, we have a limited operating history as a combined company. Accordingly,
you have limited financial data that you can use to evaluate our future
prospects in the broadband wireless access market.

WE DEPEND UPON A SMALL NUMBER OF CUSTOMERS, AND THE LOSS OF ANY OF THEM, OR
THEIR FAILURE TO SELL THEIR SYSTEMS, WOULD LIMIT OUR ABILITY TO GENERATE
REVENUES.

We depend, and expect to remain dependent, on a small number of wireless
systems integrators for sales of our products. If our customers reduce orders
for our products, we could lose revenues and suffer damage to our reputation in
the industry. On a pro forma basis giving effect to our merger with Milliwave,
Hughes Network Systems, Nokia and Nortel Networks and its affiliates

6
<PAGE>

(which we refer to as "Nortel Networks") accounted for 29%, 21% and 26% of our
revenues in the six months ended June 30, 2000. On the same pro forma basis,
they accounted for 7%, 34% and 9% of our total revenues in the year ended
December 31, 1999. We have production and supply contracts with TRW under which
we deliver products to Nokia and Nortel Networks in satisfaction of TRW's direct
contractual obligations with them. Although our relationships with Nokia and
Nortel Networks are indirect, these companies are effectively two of our largest
customers. The terms of our contracts with TRW are substantially similar to the
terms in TRW's contracts with Nokia and Nortel Networks and are no longer
commercially satisfactory. TRW's contract with Nortel Networks, and our
corresponding agreement with TRW, expire in October 2000. One of TRW's contracts
with Nokia, and our corresponding agreement with TRW, will expire in July 2001.
The other TRW contract with Nokia, and our corresponding agreement with TRW,
expire when all obligations under this contract with Nokia have been satisfied,
which we expect to occur in fall 2000. We are negotiating production contracts
with Nokia and Nortel Networks that would take effect upon the expiration of
their agreements with TRW. We cannot assure you that we will be successful in
negotiating these contracts on favorable terms, or at all.

Our customers may not have or use the financial, marketing, technological
and other resources necessary to ensure that their solutions will succeed in a
marketplace characterized by rapid technological changes and intense
competition. For example, communications service providers may insist that
wireless systems integrators provide extensive financing for the deployment of
large broadband wireless access networks, and our customers may be unwilling or
unable to provide the necessary financial resources. If the wireless systems
integrators that we supply are not successful in selling their broadband
wireless access systems for any reason, our operating results would be harmed.

BECAUSE OUR COST OF PRODUCT REVENUES HISTORICALLY HAS EXCEEDED OUR PRODUCT
REVENUES, AND BECAUSE WE EXPECT COMPETITIVE CONDITIONS WILL FORCE US TO REDUCE
PRICES IN THE FUTURE, WE MUST ACHIEVE COST REDUCTIONS IN ORDER TO BECOME
PROFITABLE.

Since our inception, our cost of product revenues has exceeded our
revenues and, accordingly, we have reported negative gross margins. We expect
that market conditions, particularly declining prices for competing broadband
access solutions will force us to reduce our prices in the future. If we are not
able to reduce our per unit cost of product revenues to a sufficient degree, we
will not become profitable. In order to reduce these costs, we must migrate our
products to technologies that enable low cost, automated manufacturing
techniques so that we can increase manufacturing volume and yield. The volume of
our orders may not be sufficiently large to make use of these technologies and,
as a result, we may not be able to achieve these cost reductions.

We have limited experience in manufacturing our circuits using our
proprietary "flip-chip" technology and have not produced products in the volume
and at the prices requested by our customers to date. We cannot assure you that
we will be able to produce products using this technology in significant volume
in the future. We believe our "flip-chip" technology is critical to our future
success. Our inability to successfully use our "flip-chip" technology for high
volume manufacturing will significantly diminish our ability to lower our per
unit manufacturing costs and, as a result, will delay or may even prevent our
achieving profitability.

7
<PAGE>

OUR OPERATING RESULTS IN FUTURE PERIODS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY
AND MAY FAIL TO MEET THE EXPECTATIONS OF SECURITIES ANALYSTS OR INVESTORS,
CAUSING OUR STOCK PRICE TO FALL.

Our quarterly and annual operating results are difficult to predict and
are likely to continue to fluctuate significantly from period to period. If our
operating results fall below the expectations of securities analysts or
investors, the price of our common stock could fall substantially. Our operating
results may fluctuate for several reasons, including:

o variations in the timing and size of, or cancellations or reductions
of, customer orders and shipments;

o variations in the availability, cost and quality of components from
our suppliers, particularly from our single source suppliers and
suppliers of scarce components;

o competitive factors, including pricing, availability and demand for
competing products;

o constraints on our manufacturing capacity;

o variability of the product development and sales cycle with our
customers;

o variations in our manufacturing yields and other factors affecting
our manufacturing costs;

o changes in our sales prices;

o changes in the mix of products with different gross margins;

o failure to meet milestones under any significant development
contracts;

o obsolescence of our component inventories;

o hiring and loss of personnel, particularly in manufacturing, research
and development and sales and marketing;

o failure to timely or successfully complete the integration of our
operations with those of Milliwave; and

o product defect claims and associated warranty expenses.

WE HAVE A LENGTHY PRODUCT DEVELOPMENT AND SALES CYCLE. AS A RESULT, WE MUST
INVEST SUBSTANTIAL FINANCIAL AND TECHNICAL RESOURCES IN A POTENTIAL SALE BEFORE
WE KNOW WHETHER THE SALE WILL OCCUR. IF THE SALE DOES NOT OCCUR, WE MAY NOT HAVE
THE OPPORTUNITY TO SELL PRODUCTS TO THAT CUSTOMER UNTIL ANOTHER GENERATION OF
ITS SYSTEM IS DEVELOPED.

Because our products are highly technical, our sales efforts involve a
collaborative and iterative process with our customers to determine their
specific requirements and design an appropriate solution. Depending on the
product, the typical product development and sales cycle can take anywhere from
three to twelve months. During the product development phase, our engineers
typically work with the customer to define the product and design a prototype
product for the customer to evaluate. We incur significant expenses as part of
this process without any assurance of resulting revenues. We generate revenues
only if our product is selected for incorporation into a customer's system. If
our product is not selected, we generally will not have an opportunity to sell
our product to that customer until that customer develops a new generation of
its system. We have been advised by some of our major customers that, to date,
we have not met their stated volume and cost requirements. As a result, we face
a significant risk of not being included in their next generation products. The
length of our product development and sales cycle makes us particularly
vulnerable to the loss of a significant customer or a significant reduction in
orders by a customer, because we may be unable to quickly replace the lost or
reduced sales.

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.

Existing and potential customers typically demand that we design products
for them under difficult time constraints. Our ability to design products within
the time constraints demanded by a

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customer will depend on the number of product design professionals who are
available to focus on that customer's project. The availability of professionals
with the requisite level of expertise is limited, and we may be unable to commit
the necessary resources to a potential customer. If so, we may lose a potential
sale.

Each of our products is designed for a specific range of frequencies.
Because different national governments license different portions of the
frequency spectrum for the broadband wireless access market, and because
communications service providers that use broadband wireless access systems
license specific frequencies as they become available, we must adapt our
products rapidly to use different frequencies in order to remain competitive.
This design process can be difficult and time consuming, could increase our
costs and could cause delays in the delivery of products to our customers, which
may harm our reputation and affect the timing of our revenues.

WE MAY NOT BE ABLE TO MANUFACTURE AND DELIVER OUR PRODUCTS AS QUICKLY AS OUR
CUSTOMERS REQUIRE, WHICH COULD CAUSE US TO LOSE SALES OR INCUR PENALTIES AND
WOULD HARM OUR REPUTATION.

We may not be able to manufacture products and deliver them to our
customers at the times and in the volumes they require. If we fail to
manufacture and deliver products in a timely fashion, our reputation may be
harmed, we may lose potential future sales and we may be forced to pay penalties
to our customers. Manufacturing delays can occur for a variety of reasons, such
as lack of manufacturing capacity, the failure of a supplier to provide
components in a timely fashion or with acceptable quality, our inability to
attract and retain qualified manufacturing personnel and low manufacturing
yield. The manufacturing of our products is complex. The yield, or percentage of
products manufactured that conform to required specifications, can decrease for
many reasons, such as materials containing impurities, equipment not functioning
in accordance with requirements or human error. If our yield is lower than we
expect, we may not be able to deliver products on time. Our ability to design,
manufacture and deliver products on time could also be harmed by integration
difficulties arising from our recent merger with Milliwave, because mergers of
this type often have a negative effect, at least in the short term, on the
efficiency of manufacturing operations. We could be subject to interruptions or
delays in our manufacturing as a result of a labor dispute, equipment failure,
natural disaster, infrastructure failure, political instability or other cause.

As part of our growth strategy, we partially outsource the assembly of
our broadband antennas and plan to continue to outsource some portions of our
product manufacturing to third party vendors. If these vendors do not provide us
with high quality products and services in a timely manner, or if one or more of
these vendors terminates its relationship with us, we may be unable to obtain
satisfactory replacements to fulfill customer orders on a timely basis. In this
event, our reputation may be harmed and we may lose potential future sales.

IF WE ARE UNABLE TO SUCCESSFULLY INTEGRATE MILLIWAVE'S OPERATIONS WITH OUR OWN,
OUR OPERATING RESULTS WOULD BE HARMED.

In March 2000, we completed our merger with Milliwave, which, at the time
of the merger, was a wholly-owned subsidiary of TRW. As part of the merger, we
acquired Milliwave's manufacturing and product development facility in Diamond
Springs, California. We are in the process of integrating the operations at the
Diamond Springs manufacturing facility with those at our Sunnyvale, California
and Santa Clara, California manufacturing facilities. We have limited experience
operating multiple manufacturing facilities. We may fail to successfully operate
the Diamond Springs manufacturing facility or to integrate it with our existing
business on schedule or within our budget, which could result in:

o our failure to manage manufacturing capacity to meet product demand;

o our failure to maintain the quality of the Diamond Springs
manufacturing processes;

o the diversion of management time and attention;

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o difficulties in coordinating the operations of multiple research and
development facilities;

o the loss of Milliwave employees; and

o the loss of customers.

We must properly manage the integration of Milliwave's business with our
business to ensure that our manufacturing capacity can meet product demand and
to achieve the anticipated cost reductions and synergies from the merger.
Failure to do so could result in unanticipated costs, lost sales and customers
and harm to our reputation.

OUR RELIANCE ON TRW AND OTHER THIRD PARTY SEMICONDUCTOR PROVIDERS TO MANUFACTURE
OUR GALLIUM ARSENIDE DEVICES MAY CAUSE A SIGNIFICANT DELAY IN OUR ABILITY TO
FILL ORDERS AND LIMIT OUR ABILITY TO ASSURE PRODUCT QUALITY AND CONTROL COSTS.

We do not own or operate a semiconductor fabrication facility. We
currently rely on TRW and other third-party semiconductor fabrication facilities
to manufacture substantially all of the gallium arsenide devices incorporated in
our products. We expect to obtain a substantial portion of our gallium arsenide
devices from TRW for the foreseeable future. In connection with our merger with
Milliwave, we entered into a supply agreement with TRW for these devices. The
agreement expires in March 2003. We may not be able to negotiate an extension to
this agreement on favorable terms, if at all. We also may not be successful in
forming alternative supply arrangements that provide us with a sufficient supply
of gallium arsenide devices. The loss of any of our third-party semiconductor
fabrication facilities, particularly TRW, or any delay or reduction in the
supply of gallium arsenide devices, will impact our ability to fulfill customer
orders and could damage our relationships with our customers, either of which
would significantly harm our business and operating results. Because there are
limited numbers of third-party semiconductor fabrication facilities that use the
particular process technologies we select for our products and have sufficient
capacity to meet our needs, using alternative or additional third-party
semiconductor fabrication facilities would require an extensive qualification
process that could prevent or delay product shipments.

Our reliance on these third-party suppliers involves several additional
risks, including reduced control over manufacturing costs, delivery times,
reliability and quality of the products incorporating these devices. The
fabrication of semiconductor devices is a complex and precise process. Minute
impurities, difficulties in the fabrication process, defects in the masks used
to print circuits on a semiconductor wafer, wafer breakage or other factors can
cause a substantial percentage of wafers to be rejected or numerous devices on a
wafer to be nonfunctional. We expect that our customers will continue to
establish demanding specifications for quality, performance and reliability that
must be met by our products. Our third-party semiconductor fabrication
facilities may not be able to achieve and maintain acceptable production yields
in the future. In the past, we have experienced delays in product shipments from
our third-party semiconductor fabrication facilities, which in turn delayed
product shipments to our customers. To the extent these suppliers suffer
failures or defects, or delay deliveries to us, we could experience lost
revenues, increased costs and delays in, cancellations or rescheduling of orders
or shipments, any of which would harm our business.

BECAUSE OF THE SCARCITY OF SOME COMPONENTS AND OUR DEPENDENCE ON SINGLE
SUPPLIERS FOR SOME OTHER COMPONENTS, WE MAY BE UNABLE TO OBTAIN AN ADEQUATE
SUPPLY OF SUCH COMPONENTS, OR WE MAY BE REQUIRED TO PAY HIGHER PRICES OR TO
PURCHASE COMPONENTS OF LESSER QUALITY.

We currently purchase a number of components, including electronic
filters, semiconductor devices, circuits and circuit boards, frequency
references and housings, from single source suppliers for which alternative
sources are not readily available. In addition, we rely on Hughes Network
Systems for components we incorporate into products we in turn sell to Hughes
Network Systems. The market is also experiencing a shortage of tantalum
capacitors, a critical component in many of our products. Any delay or
interruption in the supply of these or other components could impair our

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ability to manufacture and deliver our products, harm our reputation and cause a
reduction in our revenues. Our single source suppliers could enter into
exclusive agreements with or be acquired by one of our competitors, increase
their prices, refuse to sell their products to us, discontinue products or go
out of business. Even to the extent alternative suppliers are available to us,
identifying them and entering into arrangements with them is difficult and time
consuming, and they may not meet our quality standards. We may not be able to
obtain sufficient quantities of required components on the same or substantially
the same terms. Additionally, consolidations among our suppliers could result in
other sole source suppliers. Any increase in the cost of the components that we
use in our products could make our products less competitive and lower our
margins.

WE EXPECT TO EXPAND OUR OPERATIONS SIGNIFICANTLY, AND OUR FAILURE TO MANAGE OUR
EXPANSION COULD LEAD TO CUSTOMER DISSATISFACTION, COST INEFFICIENCIES AND LOST
SALES OPPORTUNITIES.

We are rapidly and significantly expanding our operations, including the
number of our employees, the geographic scope of our activities and our product
offerings. We have yet to achieve full integration, or to determine the
appropriate manner of integration, of our Diamond Springs facility acquired
through our merger with Milliwave, with our pre-existing Sunnyvale and Santa
Clara facilities. The expansion of our operations has placed a significant
strain on all of our resources. To manage our growth, we must hire, train and
manage significant numbers of qualified employees, particularly research and
development, sales and marketing and manufacturing personnel, develop our
budgeting and forecasting procedures, improve our administrative, accounting and
management information systems and controls, manage our research and development
efforts, control our levels of inventory, and effectively coordinate the
activities of the personnel within and among our various departments. All of
these endeavors will require substantial management effort. Our failure to
manage growth effectively could cause unanticipated costs and delays in the
sale, manufacture and delivery of our products, which could lead to lost
revenues, delays in revenue recognition, customer dissatisfaction and harm to
our reputation.

BECAUSE WE DO NOT HAVE LONG TERM COMMITMENTS FROM MANY OF OUR CUSTOMERS, WE MUST
ESTIMATE CUSTOMER DEMAND, AND ERRORS IN OUR ESTIMATES WOULD HAVE NEGATIVE
EFFECTS ON OUR INVENTORY LEVELS AND REVENUES.

Our sales are made on the basis of individual purchase orders rather than
long term purchase commitments. In addition, our customers may cancel or defer
purchase orders. We have historically been required to place firm orders for
products with our suppliers up to six months prior to the anticipated delivery
date and, on occasion, prior to receiving an order for the product. Therefore,
our order volumes are based on our forecasts of demand from our customers. This
process requires us to make multiple demand forecast assumptions, each of which
may introduce error into our estimates. If we overestimate customer demand, we
may allocate resources to manufacturing products that we may not be able to sell
when we expect or at all. As a result, we would have excess inventory, which
would harm our financial results. Conversely, if we underestimate customer
demand or if insufficient manufacturing capacity is available, we would lose
revenue opportunities, lose market share and damage our customer relationships.
On occasion, we have been unable to adequately respond to unexpected increases
in customer purchase orders and were unable to benefit from this increased
demand.

BECAUSE WE INTEND TO CONTINUE EXPANDING OUR MANUFACTURING CAPACITY IN ADVANCE OF
DEMAND, OUR MANUFACTURING FACILITIES ARE, AND IN THE FUTURE MAY CONTINUE TO BE,
UNDERUTILIZED, WHICH MAY HARM OUR OPERATING RESULTS.

As part of our strategy, we are expanding our manufacturing capacity
beyond the level required for our current sales. As a result, our manufacturing
facilities are and in the future may continue to be underutilized from time to
time as we expand in anticipation of growth in demand. We added substantial
additional manufacturing capacity as a result of the merger with Milliwave. We
cannot ensure that the industry projections for future growth upon which we are
basing our

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strategy of increasing our manufacturing capacity will prove to be accurate.
Even if the broadband wireless industry experiences significant growth, we
cannot ensure that we will be successful in selling our products and growing
along with the industry. If demand for our products does not increase
significantly, underutilization of our manufacturing facilities will likely
occur and could harm our profitability and other operating results. Conversely,
if we do not expand our manufacturing capacity rapidly enough to meet demand for
our products, we will lose opportunities for additional sales. Any failure to
develop sufficient manufacturing capacity to meet demand would harm our market
share and operating results.

OUR PRODUCTS MAY CONTAIN MANUFACTURING OR DESIGN DEFECTS OR MAY NOT MEET OUR
CUSTOMERS' PERFORMANCE CRITERIA, WHICH COULD HARM OUR CUSTOMER RELATIONSHIPS,
INDUSTRY REPUTATION, REVENUES AND PROFITABILITY.

We have experienced manufacturing quality problems with our products in
the past and may have similar problems in the future. As a result of these
problems, we have replaced components in some products in accordance with our
product warranties. Our product warranties typically last one to three years. As
a result of manufacturing or design defects, we may be required to repair or
replace a substantial number of products under our product warranties. Further,
our customers may discover latent defects in our products that were not apparent
when the warranty period expired. These defects may cause repair or replacement
expenses, the loss of customers or damage to our reputation.

WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WHICH COULD REDUCE OR
ELIMINATE ANY COMPETITIVE ADVANTAGE WE HAVE.

Our success will depend, in part, on our ability to protect our
intellectual property. We rely primarily on a combination of patent, copyright,
trademark and trade secret laws to protect our proprietary technologies and
processes. Nevertheless, such measures may not be adequate to safeguard the
proprietary technology underlying our products. As of June 30, 2000, we had 27
United States patents issued, 12 foreign patents issued, and more than 90 United
States and foreign patent applications pending. The pending applications include
two international applications filed under the Patent Cooperation Treaty that
provide the opportunity to file 18 additional foreign applications. Of the
pending patent applications, 13 have been allowed and are expected to result in
the issuance of patents to us. Our issued United States patents include those
relating to basic circuit and device designs, semiconductors, our proprietary
"flip-chip" design for circuit technology and antenna design and technology. In
addition, we jointly hold two patents with AT&T pertaining to sectorized
communications systems and jointly hold one patent with Conductus relating to
satellite communications. Our issued patents expire between 2013 and 2018. Of
all our patents, we consider the two patents relating to our "flip-chip" circuit
technology to be the most valuable. With regard to our pending patent
applications, no patents may be issued as a result of these or any future
applications. If they are issued, any patent claims allowed may not be
sufficiently broad to protect our technology. In addition, any existing or
future patents may be challenged, invalidated or circumvented, and any right
granted thereunder may not provide meaningful protection to us. The failure of
any patents to provide protection to our technology might make it easier for our
competitors to offer similar products and use similar manufacturing techniques.

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trademark protection outside of the United States. Further, at our customers'
request, we occasionally incorporate their intellectual property into our
designs, in which cases we have obligations with respect to the non-use and
non-disclosure of that intellectual property. However, the steps taken by us to
prevent misappropriation or infringement of the intellectual property of our
company or our customers may not be successful. Moreover, litigation may be
necessary in the future to enforce our intellectual property rights, to protect
our trade secrets or to determine the validity and scope of proprietary rights
of others, including our customers. Litigation of this type could result in
substantial costs and diversion of our resources.

ANY ACQUISITIONS WE MAKE COULD DISRUPT OUR BUSINESS AND SEVERELY HARM OUR
FINANCIAL CONDITION.

As part of our business strategy, we may invest in or acquire other
businesses, technologies or assets. While we have no current agreements to do
so, for future acquisitions, we may issue additional stock, incur debt, assume
liabilities, incur amortization expenses related to goodwill and other
intangible assets or incur large and immediate write-offs. With the exception of
our ongoing integration related to our merger with Milliwave, we have no
experience in integrating acquired businesses with our existing business. Our
operation of any acquired businesses would involve numerous risks, including:

o problems combining any purchased operations with our own operations;

o unanticipated costs;

o diversion of management's attention from our core business;

o adverse effects on existing business relationships with customers;

o risks associated with entering markets in which we have no or
limited prior experience; and

o the potential loss of key employees, particularly those of the
purchased organization.

WE DEPEND ON OUR KEY PERSONNEL. IF WE ARE UNABLE TO RETAIN OUR CURRENT PERSONNEL
AND HIRE ADDITIONAL QUALIFIED PERSONNEL, OUR ABILITY TO DEVELOP AND SUCCESSFULLY
MARKET OUR PRODUCTS WOULD BE HARMED.

We believe that our future success will depend upon our ability to
attract, integrate and retain highly skilled managerial, sales and marketing,
research and development and manufacturing personnel. Skilled personnel in our
industry are in short supply, and this shortage is likely to continue for some
time. As a result, competition for these people is intense, particularly in
northern California where there is a high concentration of technology companies.
To attract and retain qualified personnel, we may be required to grant large
option or other stock-based incentive awards, which may be highly dilutive to
other stockholders. We may also be required to pay significant base salaries and
cash bonuses to attract and retain skilled personnel, which could harm our
operating results. In addition, we believe that prospective employees that we
target after this offering, as well as existing employees, may perceive that the
stock option component of our compensation package is not as valuable as that
component was prior to this offering. Consequently, after this offering, we may
have greater difficulty attracting and retaining the qualified employees that we
are seeking.

We are particularly dependent on the continued employment of our senior
management team and other key personnel. If one or more members of our senior
management team or other key personnel were unable or unwilling to continue in
their present positions, such persons would be very difficult to replace, and
our business could be seriously harmed. We do not maintain "key person" life
insurance policies.

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OUR SUCCESS IN PURSUING SALES IN INTERNATIONAL MARKETS MAY BE LIMITED BY RISKS
RELATED TO INTERNATIONAL TRADE AND MARKETING.

On a pro forma basis giving effect to our merger with Milliwave, for the
six months ended June 30, 2000, approximately 5.2% of our revenues were derived
from sales to customers outside the United States. A substantial portion of our
products are sold to TRW on behalf of Nokia and Nortel Networks, which are
companies located outside the United States. If we are successful in entering
into new production contracts with Nokia or Nortel Networks after the expiration
of their agreements with TRW, the proportion of our revenues attributable to
sales to customers outside the United States would substantially increase. In
addition, some of our United States-based customers may sell into international
markets. Adverse international economic conditions or developments could in the
future negatively affect our revenues and sales by our customers into these
regions, which would impact our revenues. In addition to the uncertainty as to
our ability to maintain and expand our international presence, there are certain
risks inherent in foreign operations, including:

o difficulties in complying with foreign laws and regulations and
obtaining foreign governmental approvals and permits;

o delays in or prohibitions on exporting products resulting from export
restrictions for certain products and technologies;

o fluctuations in foreign currencies and the United States dollar;

o political and economic instability;

o adverse tax consequences; and

o seasonal reductions in business activity.

In addition, foreign laws treat the protection of proprietary rights and
intellectual property differently from laws in the United States and may not
protect our proprietary rights and intellectual property to the same extent as
United States laws.

COMPLIANCE WITH CURRENT OR FUTURE ENVIRONMENTAL LAWS AND REGULATIONS COULD
IMPOSE SIGNIFICANT BURDENS ON US, WHICH COULD HAVE AN ADVERSE IMPACT ON OUR
OPERATING RESULTS AND FINANCIAL CONDITION.

We use a small number of hazardous substances to produce our products. If
we fail to comply with present or future governmental regulations related to the
use, storage, handling, discharge or disposal of toxic, volatile or otherwise
hazardous chemicals used in our manufacturing processes, we may have our
manufacturing operations suspended and we may be assessed fines. We may also be
required to alter our manufacturing processes or even cease operations in
certain locations, which would result in significant costs. Governmental
regulations could also require that we incur expensive remediation costs or
other expenses to comply with environmental regulations. We could also face
future liabilities in civil actions for violations of environmental laws and
regulations. Liability for cleanup under the Comprehensive Environmental
Response, Compensation and Liability Act is joint and several. Consequently, if
other parties that share responsibility with us for contamination at any site
are unable to pay for their share of any damages or remediation, we may be held
liable to pay for some or all of their share.

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RISKS RELATED TO OUR INDUSTRY

THE BROADBAND WIRELESS ACCESS INDUSTRY IS NEW AND ITS FUTURE IS UNCERTAIN. IF
SIGNIFICANT DEMAND FOR THIS TECHNOLOGY DOES NOT DEVELOP, WE WILL NOT BE ABLE TO
GENERATE SIGNIFICANT REVENUES.

Broadband wireless access technology is new and unproven in the
marketplace. This technology may prove unsuitable for widespread commercial
deployment, in which case it is unlikely we could generate enough revenues to
obtain and sustain profitability. Many factors will influence the success or
failure of broadband wireless access technology, including:

o its capacity to handle growing demands for faster transmission of
increasing amounts of video, voice and data;

o its cost effectiveness and performance compared to other forms of
broadband access, the prices and performance of which continue to
improve;

o its reliability and security;

o whether the products can be manufactured in sufficient volume;

o its suitability for a sufficient number of geographic regions;

o the availability of sufficient frequencies for wireless
communications service providers to deploy products at commercially
reasonable rates;

o the availability of sufficient site locations for wireless
communications service providers to install products at commercially
reasonable rates;

o safety and environmental concerns regarding broadband wireless
transmissions; and

o permission by domestic and international regulatory authorities to
allow construction of new wireless systems.

MANY COMPETING TECHNOLOGIES SERVE OUR TARGET MARKET, AND IF THE BROADBAND
WIRELESS ACCESS TECHNOLOGIES UPON WHICH OUR PRODUCTS ARE BASED DO NOT SUCCEED AS
A SOLUTION FOR BROADBAND ACCESS, WE WILL NOT BE ABLE TO SUSTAIN OR GROW OUR
BUSINESS.

Providers of broadband wireless access solutions compete with providers
of other high speed solutions, such as digital subscriber lines, cable, fiber
and other high speed wire, satellite and wireless technologies. Many of these
alternative technologies use existing installed infrastructure and have achieved
significantly greater market acceptance and penetration than broadband wireless
access technologies. Moreover, current broadband wireless access technology has
inherent technical limitations that may inhibit its widespread adoption in many
areas, including the need for line-of-sight installation and reduced
communication distance in bad weather. In addition, the need for communications
service providers to obtain the rights to install broadband wireless access
equipment on rooftops and in other locations may inhibit its widespread
adoption. We expect broadband access technologies to face increasing competitive
pressures from both current and future alternative technologies. In light of
these factors, many communications service providers may be reluctant to invest
heavily in broadband wireless access solutions and, accordingly, the market for
these solutions may fail to develop or may develop more slowly than we expect.
Either outcome would limit our sales opportunities and make it difficult or
impossible for us to achieve profitability.

THE BROADBAND WIRELESS ACCESS INFRASTRUCTURE EQUIPMENT INDUSTRY IS INTENSELY
COMPETITIVE, AND OUR FAILURE TO COMPETE EFFECTIVELY COULD REDUCE OUR REVENUES
AND MARGINS.

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Communications and Thomson. In the market for antennas, we primarily compete
with Andrew Corporation, Electromagnetic Sciences, Nurad Technologies, Radio
Waves and REMEC.

We believe that the principal competitive factors in our industry are:

o technical leadership;

o the ability to migrate to low cost solutions;

o manufacturing capability and capacity;

o time-to-market in the design and manufacturing of products;

o price;

o product breadth;

o access to semiconductor materials and components; and

o customer support services.

We believe we are well positioned to compete effectively in our chosen
markets. However, many of our current and potential competitors are
substantially larger than us and have greater financial, technical,
manufacturing and marketing resources. If we are unable to compete successfully,
our future operations and financial results would be harmed.

IF WE ARE UNABLE TO KEEP UP WITH THE RAPID TECHNOLOGICAL CHANGES THAT
CHARACTERIZE OUR INDUSTRY, OUR BUSINESS WOULD SUFFER.

In order to succeed, we must improve current products and develop and
introduce new products that are competitive in terms of price, performance and
quality and that adequately address the changing requirements of wireless
systems integrators, their customers and subscribers and emerging industry
standards. To accomplish this, we make substantial investments in the research
and development of new products for and improvements to existing products. If
these investments do not result in competitive products that generate large
volume orders, our business would suffer. On a pro forma basis giving effect to
our merger with Milliwave, our research and development expenses were $10.9
million in 1999 and $6.6 million in the six months ended June 30, 2000. We
intend to continue to incur substantial research and development and product
development expenses. We cannot ensure that these investments will result in
corresponding product revenues.

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.

The markets that we serve are highly regulated. Communications service
providers must obtain regulatory approvals to operate broadband wireless access
networks within specified licensed bands of the frequency spectrum. The FCC and
foreign regulatory agencies have adopted regulations that impose stringent RF
emissions standards on the communications industry. Changes to these regulations
may require that we alter the performance of our products.

The enactment by governments of new laws or regulations or a change in
the interpretation of existing regulations could adversely affect the market for
our products. We cannot guarantee that the trend toward deregulation and current
regulatory developments favorable to the promotion of new and expanded wireless
services will continue or that other future regulatory changes will have a
positive impact on us. The increasing demand for wireless communications has
exerted pressure on regulatory bodies worldwide to adopt new standards for such
products, generally following extensive investigation and deliberation over
competing technologies. In the past, the delays inherent in this governmental
approval process have caused, and in the future may cause, the cancellation,
postponement or rescheduling of the installation of communications systems by
our

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customers. These delays could affect our ability to allocate our research
and development resources effectively, cause our existing and potential
customers to delay orders and otherwise harm our ability to generate revenues.

OUR INDUSTRY IS CHARACTERIZED BY VIGOROUS PROTECTION AND PURSUIT OF INTELLECTUAL
PROPERTY RIGHTS. THIS COULD CAUSE US TO BECOME INVOLVED IN COSTLY AND LENGTHY
LITIGATION, WHICH COULD SUBJECT US TO LIABILITY, PREVENT US FROM SELLING OUR
PRODUCTS OR FORCE US TO REDESIGN OUR PRODUCTS.

The wireless access industry is characterized by vigorous protection and
pursuit of intellectual property rights. We have received and may receive in the
future notices of claims of infringement of other parties' proprietary rights.
For example, we are in the process of responding to inquiries that claim that
some of our antenna technologies infringe upon a European patent. In addition,
the invalidity of our patents may be asserted or prosecuted against us.
Furthermore, in a patent or trade secret action, we could be required to
withdraw certain products from the market or redesign products offered for sale
or under development. We have also entered into certain indemnification
obligations in favor of our customers and strategic partners that could be
triggered upon an allegation or finding of our infringement of other parties'
proprietary rights. Irrespective of the validity or successful assertion of such
claims we would likely incur significant costs and diversion of our resources
with respect to the defense of such claims. To address any potential claims or
actions asserted against us, we may seek to obtain a license under a third
party's intellectual property rights. Under such circumstances, a license may
not be available on commercially reasonable terms, if at all.

RISKS RELATED TO THIS OFFERING AND OWNERSHIP OF OUR COMMON STOCK

THE MARKET PRICE OF OUR COMMON STOCK IS LIKELY TO BE VOLATILE AND YOU MAY NOT BE
ABLE TO RESELL YOUR SHARES AT OR ABOVE THE INITIAL PUBLIC OFFERING PRICE.

Prior to this offering, our common stock has not traded publicly. The
initial public offering price of our common stock will be determined by
negotiation among us and representatives of the underwriters of this offering
and may not be indicative of the price that will prevail in the open market
after this offering. In addition, the market price of our common stock could
fluctuate significantly for many reasons, including:

o our financial performance or the performance of our competitors;

o technological innovations or other trends or changes in the broadband
wireless access industry;

o successes or failures at significant product evaluations or site
demonstrations;

o the introduction of new products by us or our competitors;

o the arrival or departure of key personnel;

o acquisitions, strategic alliances or joint ventures involving us or
our competitors;

o changes in estimates of our performance or recommendations by
securities analysts;

o decisions by major participants in the communications industry not to
purchase products from us or to pursue alternative technologies;

o decisions by investors to de-emphasize investment categories, groups
or strategies that include our company or industry; and

o market conditions in the industry, the financial markets and the
economy as a whole.

In addition, the stock market has recently experienced extreme price and
volume fluctuations. These fluctuations are often unrelated to the operating
performance of particular companies and the

17
<PAGE>

market prices for securities of technology companies have been especially
volatile. These broad market fluctuations may cause declines in the market price
of our common stock. When the market price of a company's stock drops
significantly in a short time period, stockholders often institute securities
class action lawsuits against the company. A lawsuit against us could cause us
to incur substantial costs and could divert the time and attention of our
management and other resources.

IF WE CANNOT RAISE ADDITIONAL CAPITAL WE MAY NEED ON ACCEPTABLE TERMS, WE MAY
NOT ACHIEVE OUR BUSINESS GOALS.

If we do not have sufficient capital to fund our operations, we may be
forced to discontinue product development, reduce our sales and marketing
efforts and forego attractive business opportunities, and we may lose the
ability to respond to competitive pressures. We expect that the net proceeds
from this offering, cash on hand and borrowings under our credit facility will
be sufficient to meet our working capital and capital expenditure needs for at
least the next 12 months. After that, we may need to raise additional funds, and
additional financing may not be available on favorable terms, if at all. We may
also require additional capital to acquire or invest in complementary businesses
or products or obtain the right to use complementary technologies. If we issue
additional equity securities to raise funds, the ownership percentage of our
existing stockholders would be reduced. New investors may demand rights,
preferences or privileges senior to those of existing holders of our common
stock. If we issue debt securities to raise funds, we may incur significant
interest expense, which would harm our profitability. The issuance of debt
securities may also require us to agree to various restrictions typical of debt
securities, including limitations on further borrowing and our right to pay
dividends.

AFTER THIS OFFERING, TRW AND OUR OFFICERS AND DIRECTORS WILL OWN A LARGE
PERCENTAGE OF OUR COMMON STOCK AND WILL BE ABLE TO CONTROL THE OUTCOME OF
MATTERS REQUIRING STOCKHOLDER APPROVAL.

Upon the completion of this offering, executive officers, directors and
holders of five percent or more of our outstanding common stock will, in the
aggregate, beneficially own approximately ____% of our outstanding common stock.
In particular, TRW will beneficially own approximately ____% of the outstanding
shares of our common stock. As a result, our executive officers, directors and
five percent stockholders as a group will be able to effectively control all
matters requiring approval of our stockholders, including the election of
directors and approval of significant corporate transactions. TRW alone will be
able to significantly influence such matters. This concentration of ownership
may also delay, deter or prevent a change in control and may make some
transactions more difficult or impossible to complete without the support of
these stockholders, even if the transaction is favorable to our stockholders. In
addition, because of their ownership of our common stock, these stockholders
will be in a position to significantly affect our corporate actions in a manner
that could conflict with the interests of our public stockholders.

SUBSTANTIAL SALES OF COMMON STOCK BY OUR EXISTING STOCKHOLDERS COULD CAUSE OUR
STOCK PRICE TO FALL.

The market price of our common stock could decline if our existing
stockholders sell substantial amounts of our common stock in the public market
after this offering. These sales also might make it more difficult for us to
sell equity securities in the future at a time and at a price that we deem
appropriate. Upon completion of this offering, based on the number of
outstanding shares as of June 30, 2000, we will have outstanding shares of
common stock. Of these shares, _________________ shares will be freely tradable
without restriction. Of the remaining shares, approximately 25,884,000 shares
held by our existing stockholders are subject to lock-up agreements providing
that these stockholders will not sell or otherwise dispose of any of their
shares for a period of 180 days following the date of the final prospectus for
this offering without the prior written consent of Deutsche Bank Securities Inc.
Deutsche Bank Securities Inc. can release these lock-up agreements at any time.
In addition, as of June 30, 2000, options to purchase 4,486,138 shares of our
common stock were outstanding, and we may grant additional options under our
existing equity incentive plans and issue additional shares under our employee
stock purchase plan. Following this

18
<PAGE>

offering, we expect to register the shares underlying these options and shares
so that they are freely tradable, subject to the lock-up agreements described
above and vesting restrictions.

After this offering, the holders of 27,782,488 shares of common stock
will be entitled to rights with respect to registration of such shares under the
Securities Act of 1933. If such holders, by exercising their registration
rights, cause a large number of securities to be registered and sold in the
public market, these sales could have an adverse effect on the market price for
our common stock. If we were to initiate a registration and include shares held
by these holders pursuant to the exercise of their registration rights, these
sales may have an adverse effect on our ability to raise capital.

OUR CERTIFICATE OF INCORPORATION, BYLAWS AND ARRANGEMENTS WITH EXECUTIVE
OFFICERS CONTAIN PROVISIONS THAT COULD DELAY OR PREVENT A CHANGE IN CONTROL.

Upon the completion of this offering, we will be subject to the Delaware
anti-takeover laws. These laws prevent us from engaging in a merger or sale of
more than 10% of our assets with any stockholder, including all affiliates and
associates of any stockholder, who owns 15% or more of our outstanding voting
stock, for three years following the date that such stockholder acquired 15% or
more of our assets unless:

o our board of directors approves the transaction where the stockholder
acquires 15% or more of our assets;

o after the transaction where the stockholder acquires 15% or more of
our assets, the stockholder owns at least 85% of our outstanding
voting stock, excluding shares owned by directors, officers and
employee stock plans in which employee participants do not have the
right to determine confidentially whether shares held under the plan
will be tendered in a tender or exchange offer; or

o on or after this date, the merger or sale is approved by the board of
directors and the holders of at least two thirds of the outstanding
voting stock that is not owned by the stockholder.

A Delaware corporation may opt out of the Delaware anti-takeover laws in
its original certificate of incorporation, amended certificate of incorporation
or bylaws. We have not opted out of the anti-takeover laws, which could prohibit
or delay mergers or other takeovers or changes of control and may discourage
attempts by other companies to acquire us.

In addition, our certificate of incorporation and bylaws include a number
of provisions that may deter or impede hostile takeovers or changes of control
or management. These provisions include:

o a board of directors classified into three classes of directors with
staggered three year terms;

o the authority of the board of directors to issue up to 5,000,000
shares of preferred stock and to determine the price, rights,
preferences and privileges of these shares, without stockholder
approval;

o elimination of the ability of stockholders to act by written consent
instead of at a duly called meeting of stockholders;

o the elimination of cumulative voting; and

o the indemnification of officers and directors against losses incurred
during investigations and legal proceedings resulting from their
service to Endwave.

In connection with our merger with Milliwave, our board of directors
approved a plan providing for the acceleration of vesting of a percentage of the
stock options granted to our officers. Under this plan, an unvested portion of
each officer's stock options will become vested and, in addition,

19
<PAGE>

severance benefits will be paid to such officer, if we undergo a change in
control transaction or such executive officer is terminated without cause. This
plan may make us a less attractive acquisition target or may reduce the amount a
potential acquiror may otherwise be willing to pay for our company.

YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF YOUR SHARES.

The initial public offering price is substantially higher than the pro
forma net tangible book value of each outstanding share of our common stock. As
a result, investors participating in this offering will suffer immediate and
substantial dilution. Based on an assumed initial public offering price of $
_____ per share, the dilution will be $ ___________ per share in the pro forma
net tangible book value of the common stock, or $ per share if the underwriters'
option to purchase additional shares is exercised in full. This dilution is
described in greater detail under "Dilution" in this prospectus. If outstanding
options or warrants to purchase shares of common stock are exercised, there will
be further dilution.

BECAUSE WE HAVE BROAD DISCRETION TO USE THE NET OFFERING PROCEEDS, HOW WE INVEST
THESE PROCEEDS MAY NOT INCREASE OUR PROFITS OR MARKET VALUE.

As of the date of this prospectus, we have not yet quantified the amount
of the net proceeds of this offering that will be used for the various purposes
described under "Use of Proceeds." Accordingly, our management will have
considerable discretion in the application of the net proceeds, and may apply
the net proceeds in ways that may not increase our profitability or our market
value. You will not have the opportunity, as part of your investment decision,
to assess whether the proceeds of this offering are being used appropriately.

20
<PAGE>

FORWARD-LOOKING STATEMENTS

This prospectus, including the sections entitled "Prospectus Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and "Business," contains forward looking statements.
These statements relate to future events or our future financial performance,
and involve known and unknown risks, uncertainties, and other factors that may
cause our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward looking statements. In some
cases, you can identify forward looking statements by terminology such as "may,"
"will," "should," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue" or the negative of these terms
or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially. In evaluating these statements, you
should specifically consider the risks outlined under "Risk Factors."

Although we believe that the expectations reflected in the forward
looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We are under no duty to update any of the
forward looking statements after the date of this prospectus to conform these
statements to actual results.

21
<PAGE>

USE OF PROCEEDS

We estimate that our net proceeds from the sale of the ______ shares of
common stock we are offering, at an estimated initial public offering price of
$___ per share, after deducting underwriting discounts and commission and
estimated offering expenses, will be approximately $_____ million. If the
underwriters' over-allotment option is exercised in full, we estimate that our
net proceeds will be approximately $____ million. We expect to use the net
proceeds from this offering for general corporate purposes, including working
capital, research and development and capital expenditures. A portion of the
proceeds may also be used to acquire or invest in complementary businesses or
products or to obtain the right to use complementary technologies, although
there are no current plans, negotiations or discussions for any of these
transactions. Pending use of the net proceeds for the above purposes, we intend
to invest these funds in short-term, interest-bearing, investment grade
securities.

DIVIDEND POLICY

We have never declared or paid any cash dividends. We currently intend to
retain any future earnings to fund the development and growth of our business.
Therefore, we currently do not anticipate paying cash dividends in the
foreseeable future.

22
<PAGE>
CAPITALIZATION

The table below presents the following information:

o our actual capitalization as of June 30, 2000;

o our pro forma capitalization as of that date after giving effect to
the conversion of all outstanding shares of preferred stock as of
June 30, 2000 into common stock upon completion of this offering; and

o our pro forma capitalization as adjusted to reflect the receipt of
the net proceeds from our sale of shares of common stock at an
assumed initial public offering price of $ _____ per share in this
offering, less underwriting discounts and commissions and estimated
offering expenses payable by us as discussed in "Use of Proceeds."
<TABLE>
<CAPTION>

JUNE 30, 2000
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------------- ------------- -------------
(In thousands, except share data)
<S> <C> <C> <C>
Cash and cash equivalents and short term investments................ $ 36,918 $ 36,918 $
============= ============= =============
Long term obligations, net of current portion....................... $1,596 $1,596 $1,596
Stockholders' equity (net capital deficiency):
Convertible preferred stock, $.001 par value; 27,000,000 shares
authorized; 25,881,304 shares issued and outstanding, actual;
no shares issued and outstanding, pro forma; 5,000,000 shares
authorized, no shares issued and outstanding pro forma as
adjusted....................................................... 187,167 -- --
Common stock, $.001 par value, 50,000,000 shares authorized,
661,986 shares issued and outstanding, actual; 26,543,290 shares
issued and outstanding pro forma; 100,000,000 shares
authorized, __________ shares issued and outstanding pro forma
as adjusted.................................................... 25,355 212,522
Deferred stock compensation...................................... (22,093) (22,093) (22,093)
Accumulated deficit.............................................. (33,888) (33,888) (33,888)
------------- ------------- -------------
Total stockholders' equity..................................... 156,541 156,541
------------- ------------- -------------
Total capitalization......................................... $ 158,137 $ 158,137 $
============= ============= =============
</TABLE>

This table does not include:

o 4,486,138 shares of common stock that we may issue upon exercise of
options outstanding as of June 30, 2000; and

o 322,641 shares of common stock that we may issue upon the exercise
of warrants outstanding as of June 30, 2000.

23
<PAGE>
DILUTION

Our pro forma net tangible book value as of June 30, 2000, after giving
effect to the automatic conversion of our preferred stock upon the closing of
this offering, was approximately $76.7 million, or $2.89 per share. Pro forma
net tangible book value per share represents the amount of pro forma
stockholders' equity, less intangible assets, divided by the pro forma number of
shares of common stock outstanding as of June 30, 2000. Dilution per share
represents the difference between the amount per share paid by purchasers of
shares of common stock in this offering and the pro forma net tangible book
value per share of common stock immediately after completion of this offering.

Pro forma net tangible book value as of June 30, 2000 after giving effect
to the sale of ________ shares of common stock offered by us at an initial
public offering price of $ ___________ per share and after deducting
underwriting discounts and commissions and estimated offering expenses payable
by us, would have been $ __________ million, or $ ___________ per share. This
represents an immediate increase in pro forma net tangible book value of $
____________ per share to existing stockholders and an immediate dilution in pro
forma net tangible book value of $ ________ per share to investors purchasing
our common stock in this offering, as illustrated in the following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share........................................ $
Pro forma net tangible book value per share as of June 30, 2000..................... $ 2.89
Increase per share attributable to new investors....................................
---------
Pro forma net tangible book value per share after this offering........................
---------------
Pro forma dilution per share to new investors.......................................... $
===============
</TABLE>

The table below summarizes, on a pro forma basis as of June 30, 2000, the
differences between our existing stockholders and the new investors purchasing
our common stock in this offering with respect to the total number of shares
purchased from us, the total consideration paid and the average price per share
paid, based upon an initial public offering price of $ _________ per share.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
PER SHARE
-------------------------- ----------------------------- --------------
NUMBER PERCENT AMOUNT PERCENT
---------------- -------- ------------------ --------- --------------
<S> <C> <C> <C> <C> <C>

Existing stockholders.................. 26,543,290 % $ 110,700,734 % $ 4.17

New investors..........................

---------------- -------- ------------------ ---------
Total............................... 100% 100%
================ ======== ================== =========
</TABLE>

24
<PAGE>

SELECTED FINANCIAL DATA
(in thousands, except per share data)

On March 31, 2000, Endgate merged with TRW Milliwave Inc., a wholly-owned
subsidiary of TRW Inc. Endgate was the surviving corporation in the merger and
Milliwave ceased to exist as a separate legal entity. However, because TRW owned
more than half of Endgate's outstanding capital stock immediately after the
merger, Milliwave is treated as the acquiring company for accounting purposes.
As a result, Endgate ceased to be a separate accounting entity as of the date of
the merger, and Endwave's financial statements prior to the merger are those of
Milliwave. In connection with the merger, we renamed the combined company
Endwave Corporation. Milliwave and Endwave have a fiscal year end of December
31. Prior to the merger, Endgate's fiscal year end was June 30.

PRO FORMA

The following table sets forth our pro forma statement of operations data
for 1999 and the six months ended June 30, 1999 and 2000, our pro forma balance
sheet data as of December 31, 1999 and our actual balance sheet data as of June
30, 2000. The pro forma statement of operations data for the year ended December
31, 1999 and the six months ended June 30, 1999 and 2000 appearing in this table
have been prepared as if the merger had been completed on January 1, 1999. The
pro forma statement of operations data were prepared by combining Endgate's
statement of operations data with the statement of operations data of Milliwave
for each of the periods presented. For all periods presented, the pro forma
statement of operations data excludes an $11.7 million expense for acquired
in-process research and development because it is a non-recurring charge. Pro
forma net loss per share data and pro forma share data used in computing pro
forma net loss per share have been calculated by assuming that all of Endgate's
outstanding shares of preferred stock had been converted, as of their original
issuance dates, into shares of Endgate's common stock. The pro forma balance
sheet as of December 31, 1999 has been prepared as if the merger had been
completed on December 31, 1999. The pro forma financial data should be read with
the financial statements of Endgate and Milliwave and our pro forma condensed
combining financial statements, in each case including the related notes, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," included elsewhere in this prospectus.

YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
---------------------------
1999 1999 2000
---------------- ------------- ------------
(unaudited) (unaudited)
<S> <C> <C> <C>
PRO FORMA STATEMENT OF OPERATIONS DATA:
Revenues:
Product revenues............................................... $ 13,745 $ 3,829 $ 16,059
Development fees............................................... 1,302 221 2,551
---------------- ------------- ------------
Total revenues............................................... 15,047 4,050 18,610
Costs and expenses:
Cost of product revenues....................................... 18,499 6,927 23,976
Research and development....................................... 10,925 5,431 6,556
Sales and marketing............................................ 1,316 595 1,291
General and administrative..................................... 3,870 2,191 2,917
Amortization of goodwill and other intangible assets........... 19,208 9,604 9,604
Amortization of deferred stock compensation.................... 710 -- 1,986
---------------- ------------- ------------
Total costs and expenses..................................... 54,528 24,748 46,330
Loss from operations.............................................. (39,481) (20,698) (27,720)
Interest expense and other, net................................... (585) (638) (324)
---------------- ------------- ------------
Net loss.......................................................... $(40,066) $ (21,336) $ (28,044)
================ ============= ============
Basic and diluted pro forma net loss per share.................... $(2.18) $ (1.34) $ (1.14)
================ ============= ============
Shares used to compute pro forma net loss per
share, basic and diluted....................................... 18,401 15,864 24,623
================ ============= ============
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
PRO FORMA ACTUAL
-------------- --------------
AS OF AS OF
DECEMBER 31, JUNE 30, 2000
1999
-------------- --------------
(unaudited)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents....................................................... $ 2,192 $ 36,918
Working capital................................................................. 3,641 36,588
Goodwill and other intangible assets............................................ 109,562 104,376
Total assets.................................................................... 137,990 181,027
Long term obligations, less current portion..................................... 857 1,596
Total stockholders' equity...................................................... 126,273 156,541
</TABLE>

ENDGATE

The following table contains Endgate's historical statement of operations
data for the fiscal years ended June 30, 1995, 1996, 1997, 1998 and 1999 and the
nine months ended March 31, 1999 and 2000, and Endgate's historical balance
sheet data as of June 30, 1995, 1996, 1997, 1998 and 1999 and March 31, 2000.
Information is included through March 31, 2000 because Endgate ceased to be a
separate accounting entity at the time of its merger with Milliwave, even though
Endgate was the surviving corporation in the merger.

The statement of operations data for the years ended June 30, 1997, 1998
and 1999 and the balance sheet data at June 30, 1998 and 1999 are derived from
the financial statements of Endgate that have been audited by Ernst & Young LLP,
independent auditors, and are included elsewhere in this prospectus. The
statement of operations data for the years ended June 30, 1995 and 1996 and the
balance sheet data at June 30, 1995, 1996 and 1997 are derived from the
financial statements of Endgate that have been audited by Ernst & Young LLP,
independent auditors, and are not included in this prospectus. The statement of
operations data for the nine months ended March 31, 1999 and 2000 and the
balance sheet data as of March 31, 2000 are derived from the unaudited financial
statements of Endgate that are included elsewhere in the prospectus.
Particularly as a result of the merger with Milliwave, Endgate's historical
results of operations are not necessarily indicative of our future results. The
following financial data should be read in conjunction with the Endgate
financial statements and related notes, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," both included
elsewhere in this prospectus.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, MARCH 31,
------------------------------------------------------- ----------------------
1995 1996 1997 1998 1999 1999 2000
--------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA: (unaudited)
Revenues:
Product revenues............ $-- $560 $1,133 $1,560 $1,084 $875 $2,384
Development fees............ 602 255 239 373 519 458 2,689
--------- --------- ---------- ---------- ---------- ---------- ----------
Total revenues............ 602 815 1,372 1,933 1,603 1,333 5,073
Costs and expenses:
Cost of product revenues.... - 1,612 3,957 4,230 5,836 4,500 9,011
Research and development.... 3,308 5,576 6,236 6,128 9,824 7,265 8,133
Sales and marketing......... 212 306 474 489 751 531 904
General and administrative.. 984 891 1,303 1,528 1,843 1,218 1,548
Amortization of deferred
stock compensation........ -- -- -- -- -- -- 1,191
--------- --------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses.. 4,504 8,385 11,970 12,375 18,254 13,514 20,787
--------- --------- ---------- ---------- ---------- ---------- ----------
Loss from operations........... (3,902) (7,570) (10,598) (10,442) (16,651) (12,181) (15,714)
Interest income (expense) and
other, net.................. 136 152 300 (133) (607) (582) (624)
--------- --------- ---------- ---------- ---------- ---------- ----------
Net loss....................... $(3,766) $(7,418) $(10,298) $(10,575) $(17,258) $(12,763) $(16,338)
========= ========= ========== ========== ========== ========== ==========
</TABLE>

26
<PAGE>

AS OF JUNE 30, AS OF
MARCH 31,
-------------------------------------------------------------
1995 1996 1997 1998 1999 2000
---------- ------------ ---------- ----------- ----------- ------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......... $3,719 $15,272 $4,252 $9,274 $12,562 $20,882
Working capital.................... 8,903 14,632 3,970 8,388 11,718 22,524
Total assets....................... 10,920 20,031 8,797 13,362 16,604 31,434
Long term obligations, less
current portion................. 560 1,575 846 440 456 1,239
Total stockholders' equity......... 9,629 16,475 6,177 10,453 13,919 24,377
</TABLE>

MILLIWAVE

The following table contains Milliwave's statement of operations data for
the fiscal years ended December 31, 1995, 1996, 1997, 1998 and 1999 and the six
months ended June 30, 1999 and 2000, and Milliwave's balance sheet data as of
December 31, 1995, 1996, 1997, 1998 and 1999 and June 30, 2000. Milliwave
accounted for the merger with Endgate using the purchase method of accounting.
The data for the six months ended June 30, 2000 includes the results of
operations of Endgate for the three months ended June 30, 2000 because the
merger occurred on March 31, 2000. The balance sheet data as of June 30, 2000 is
the actual balance sheet data of the combined company.

The statement of operations data for the fiscal years ended December 31,
1997, 1998 and 1999 and the balance sheet data at December 31, 1998 and 1999 are
derived from the financial statements of Milliwave that have been audited by
Ernst & Young LLP, independent accountants, and are included elsewhere in this
prospectus. The statement of operations data for the fiscal years ended December
31, 1995 and 1996 and the balance sheet data at December 31, 1995, 1996 and 1997
are derived from unaudited financial statements that do not appear in this
prospectus that, in the opinion of management, include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the information. The statement of operations data for the six
months ended June 30, 1999 and 2000 and the balance sheet data as of June 30,
2000 are derived from Milliwave's unaudited financial statements and related
notes appearing elsewhere in this prospectus. The net income (loss) per share
amounts for periods prior to January 1, 2000 have been calculated using
Milliwave's actual weighted shares outstanding. For the six months ended June
30, 2000, the net loss per share has been calculated using the weighted average
actual shares outstanding of Endgate prior to the merger and of Endwave
subsequent to the merger. Pro forma net loss per share data and pro forma share
data used in computing pro forma net loss per share have been calculated by
assuming that all of Endgate's outstanding shares of preferred stock had been
converted, as of their original issuance dates, into shares of Endgate's common
stock including the shares that would have been issuable in connection with the
preferred stock used to complete the merger.

27
<PAGE>

Particularly as a result of the merger, Milliwave's historical results of
operations are not necessarily indicative of our future results. The following
financial data should be read in conjunction with the Milliwave financial
statements and related notes, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," both included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------------------------------------------------------------------------
1995 1996 1997 1998 1999 1999 2000
--------- --------- --------- --------- ---------- ----------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues
Product revenues................ $ 5,312 $ 5,435 $ 5,250 $ 7,030 $ 12,419 $ 3,367 $ 14,537
Development fees................ -- -- -- -- -- -- 946
--------- --------- --------- --------- ------------ --------- ----------
Total revenues................ 5,312 5,435 5,250 7,030 12,419 3,367 15,483
Costs and expenses:
Cost of product revenues........ 3,317 3,838 4,350 5,992 11,221 3,880 19,196
Research and development........ -- -- 254 286 326 142 3,732
Selling, general and
administrative................ 1,188 1,590 1,222 2,964 2,370 1,352 3,140
Amortization of goodwill and
other intangible assets....... -- -- 384 1,536 1,536 768 5,186
In-process research and
development................... -- -- -- -- -- -- 11,700
--------- --------- --------- --------- ---------------------- ----------
Amortization of deferred stock
compensation.................. -- -- -- -- -- -- 1,505
--------- --------- --------- --------- ---------------------- ----------
Total costs and expenses...... 4,505 5,428 6,210 10,778 15,453 6,142 44,459
--------- --------- --------- --------- ---------------------- ----------
Income (loss) from operations 807 7 (960) (3,748) (3,034) (2,775) (28,976)
Interest income (expense) and
other, net...................... (27) 26 -- -- -- 353
Income tax benefit (expense) (312) (13) 199 850 518 700 627
--------- --------- --------- --------- ---------------------- ----------
Net income (loss).................. $ 468 $ 20 $ (761) $ (2,898) $ (2,516)$ (2,075) $ (27,996)
========= ========= ========= ========= ====================== ==========
Basic and diluted net loss per $ (251,600) $ (54.52)
share...........................
============ ==========
Shares used to compute net loss 0.01 514
per share, basic and diluted....
============ ==========
Basic and diluted pro forma net
loss per share.................. $ (0.14) $ (1.14)
============ ==========
Shares used to compute pro forma
net loss per share, basic and
diluted......................... 18,401 24,623
============ ==========
</TABLE>

MILLIWAVE ENDWAVE
--------------------------------------------------------------- -----------
AS OF
AS OF DECEMBER 31, JUNE 30,
---------------------------------------------------------------
1995 1996 1997 1998 1999 2000
------------ ---------- ------------ ----------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......... $ 756 $ 467 $ 529 $ 283 $ 373 $ 36,918
Working capital.................... 1,182 941 1,042 2,039 2,356 36,677
Total assets....................... 3,677 3,995 13,272 16,361 25,758 182,742
Long term obligations, less
current portion................. 1,262 1,671 1,641 -- -- 1,596
Total stockholders' equity......... 1,544 1,546 10,631 13,481 18,013 158,256
</TABLE>

28
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

YOU SHOULD READ THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS IN CONJUNCTION WITH THE ENDGATE, MILLIWAVE AND PRO FORMA
FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS INCLUDED ELSEWHERE IN
THIS PROSPECTUS. THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD LOOKING
STATEMENTS THAT INVOLVE RISK, UNCERTAINTIES AND ASSUMPTIONS. OUR ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING STATEMENTS
AS A RESULT OF MANY FACTORS, INCLUDING BUT NOT LIMITED TO THOSE SET FORTH UNDER
"RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

We are a leading provider of RF subsystems that enable the transmission
and reception of data signals in broadband wireless systems. We sell our
products to wireless systems integrators that provide the broadband wireless
equipment used by communications service providers to offer data services. Our
customers use our products in high speed cellular backhaul, point-to-point
access and point-to-multipoint access applications. Wireless systems
integrators who use our products in their broadband wireless systems include
Allgon, Hughes Network Systems, Nokia, Nortel Networks, P-Com, Rockwell
International, Toshiba America and WinNet MCS.

On March 31, 2000, Endgate merged with TRW Milliwave Inc., a wholly-owned
subsidiary of TRW Inc. Endgate was the surviving corporation in the merger and
Milliwave ceased to exist as a separate legal entity. However, because TRW owned
more than half of Endgate's outstanding capital stock immediately after the
merger, Milliwave is treated as the acquiring company for accounting purposes.
As a result, Endgate ceased to be a separate accounting entity as of the date of
the merger. In connection with the merger, we renamed the combined company
Endwave Corporation. When we refer to our business or other corporate activities
prior to March 31, 2000, the date of the merger, we are generally referring to
Endgate's business and corporate activities unless otherwise specified.

Our revenues consist of product revenues and development fees. Product
revenues are generated through sales of our custom and standard RF subsystem
products to wireless systems integrators and equipment manufacturers and are
recognized upon product shipment. We sell our products through our direct sales
force and network of independent international sales representatives.
Development fees are generated by developing product prototypes and custom
products pursuant to development agreements that provide for payment of a
portion of our research and development or other expenses. Any up-front
development fees paid under a development contract are recognized ratably over
the expected term of the contract, except that in no event are revenues
recognized prior to becoming billable under the terms of the contract. These
agreements, which we enter into with key customers from time to time if we
expect them to result in a significant product order, are for one-time projects
and are non-recurring. We expect development fees to represent a decreasing
percentage of our total revenues in future periods.

We depend, and expect to remain dependent, on a small number of wireless
systems integrators for sales of our products. On a pro forma basis giving
effect to our merger with Milliwave, Hughes Network Systems, Nokia and Nortel
Networks accounted for 29%, 21% and 26% of our revenues in the six months ended
June 30, 2000. On the same pro forma basis, they accounted for 7%, 34% and 9% of
our total revenues in the year ended December 31, 1999. We have production and
supply contracts with TRW, under which we deliver products to Nokia and Nortel
Networks in satisfaction of TRW's direct contractual obligations with them.
Although our relationships with Nokia and Nortel Networks are indirect, these
companies are effectively two of our largest customers. TRW's contract with
Nortel Networks, and our corresponding agreement with TRW, expire in October
2000. One of TRW's contracts with Nokia, and our corresponding agreement with
TRW, expire in July 2001. The other TRW contract with Nokia, and our

29
<PAGE>

corresponding agreement with TRW, expire when all obligations under this
contract with Nokia are performed, which we expect to occur in fall 2000. We are
negotiating production contracts with Nokia and Nortel Networks that would take
effect upon the expiration of their agreements with TRW. We cannot assure you
that we will be successful in negotiating these contracts on favorable terms, or
at all.

Cost of product revenues consists primarily of the costs of direct
materials and labor utilized to assemble and test our products, costs associated
with procurement, production control, quality assurance and manufacturing
engineering, costs associated with maintaining our manufacturing facilities and
costs associated with warranty returns. We subcontract some portions of the
manufacturing of subassemblies for our transceivers, antennas and outdoor units,
and perform final assembly and testing of transceivers and outdoor units
in-house. These subcontracting costs are also included in the cost of product
revenues.

Research and development expenses consist primarily of salaries and
related expenses for personnel engaged in research and development, material
costs for prototype and test units, patent-related legal expenses, other
expenses related to the design, development and testing of our products and for
fees paid to consultants and outside service providers for engineering and other
technical services. Research and development expenses also include all costs
incurred under our development agreements. We expense all of our research and
development costs as they are incurred. Sales and marketing expenses consist
primarily of salaries, bonuses and related expenses for personnel engaged in
marketing, sales and customer support functions, as well as costs associated
with trade shows, promotional activities, advertising and corporate branding. We
expense commissions to our independent sales representatives when revenues from
the associated sale are recognized. General and administrative expenses consist
primarily of salaries and related expenses for executive, finance, accounting,
information technology, facilities and human resources personnel and
professional fees.

Our merger with Milliwave was recorded using the purchase method of
accounting. In connection with the purchase, Milliwave recorded goodwill of
$80.2 million and other intangible assets of $23.6 million. In addition, we
allocated $11.7 million to in-process research and development. In determining
the total consideration as well as the allocation of the purchase price
including the amount of in-process research and development, Milliwave
considered as part of their analysis an appraisal prepared by an independent
appraisal firm using established valuation techniques in the high technology
industry. The amount allocated to in-process research and development was
expensed upon acquisition because technological feasibility had not been
established and no future alternative uses existed. We are amortizing goodwill
and other intangible assets on a straight-line basis over periods not exceeding
six years. Of the total intangible assets recorded in connection with the
merger, approximately $4.4 million were amortized in the six months ended June
30, 2000 and we expect $8.8 million to be amortized during the remainder of
2000.

Deferred stock compensation charges consist of charges related to the
difference between deemed fair market values on the date of employee option
grants and the associated employee option exercise prices, amortized over the
vesting periods of the options. Through June 30, 2000, we have recorded a total
of $24.8 million in stock-based compensation in connection with stock option
grants to our employees and consultants, which is being amortized using an
accelerated method of amortization as described in Financial Accounting
Standards Board Interpretation No. 28 over the vesting periods of the options,
generally four years. Endgate amortized approximately $710,000 of this expense
in 1999 and approximately $2.0 million of this expense in the six months ended
June 30, 2000. We expect amortization of deferred stock compensation charges to
be approximately $6.1 million for the remainder of 2000.

We earn interest income on the investment of our cash balances in money
market accounts. We incur interest expense under financing leases for capital
equipment and short term loans periodically extended by our equity investors.
Interest expense also includes the fair value of warrants Endgate issued in
February 1999 and January 2000 to investors who advanced funds in anticipation
of

30
<PAGE>

private placements of preferred stock. The interest and principal associated
with those notes was repaid in the form of preferred stock. The fair value of
the warrants was calculated to be $519,000 for periods ended in 1999 and
$510,000 for periods ended in 2000 using the Black-Scholes valuation method and
was expensed fully during the applicable fiscal periods.

The merger of Milliwave into Endgate was accomplished through a tax free
reorganization under the Internal Revenue Code. As such, Endgate's and
Milliwave's tax bases in their assets and liabilities carried over to Endwave
with no step-up in basis. Therefore, the amortization of intangible assets
resulting from the merger, including goodwill, is not deductible for tax
purposes. Since inception, Endgate incurred net operating losses and therefore
incurred significant net operating loss carryforwards. These carryforwards were
not reflected on Endgate's balance sheet as an asset because they were fully
reserved due to uncertainty about Endgate's ability to utilize such loss
carryforwards. Our merger with Milliwave imposed limitations on the combined
company's ability to utilize these pre-existing net operating loss
carryforwards. Generally accepted accounting principles require that deferred
tax liabilities be recorded for identifiable intangible assets acquired in a
business combination accounted for as a purchase. The deferred tax asset related
to our net operating loss carryforwards is greater than the deferred tax
liabilities related to the identifiable intangible assets acquired. We have
provided a valuation allowance to eliminate the net deferred tax asset because
ultimate realization is uncertain. Because Milliwave was a wholly-owned
subsidiary of TRW, and therefore part of the consolidated TRW tax return prior
to merging with Endgate, TRW was able to utilize Milliwave's net operating
losses in the consolidated income tax return of TRW for periods prior to March
31, 2000, leaving Milliwave with no net operating loss carryforwards. As a
result of each of these factors, to the extent we become profitable, we are
unlikely to have net operating loss carryforwards to offset taxable income.

PRO FORMA RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, our
statement of operations data, presented on a pro forma basis as if our merger
with Milliwave occurred on January 1, 1999, as a percentage of total revenues.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------
1999 2000
-------- --------
(UNAUDITED)
<S> <C> <C>
Revenues:
Product revenues......................................................................... 94.5% 86.3%
Development fees......................................................................... 5.5 13.7
-------- --------
Total revenues......................................................................... 100.0 100.0
Costs and expenses:.........................................................................
Cost of product revenues................................................................. 171.0 128.8
Research and development................................................................. 134.1 35.2
Sales and marketing...................................................................... 14.7 6.9
General and administrative............................................................... 54.1 15.7
Amortization of goodwill and other intangible assets..................................... 237.1 51.6
Amortization of deferred stock compensation.............................................. 0.0 10.7
-------- --------
Total costs and expenses............................................................... 611.0 248.9
-------- --------
Loss from operations........................................................................ (511.0) (148.9)
Interest expense and other, net............................................................. (15.8) (1.7)
-------- --------
Net loss.................................................................................... (526.8)% (150.6)%
======== ========
</TABLE>

SIX MONTHS ENDED JUNE 30, 2000 AND 1999

REVENUES. Pro forma total revenues for the six months ended June 30, 2000
were $18.6 million, a 354% increase from $4.1 million for the same period in
1999. Pro forma product revenues for the six months ended June 30, 2000 were
$16.1 million, a 324% increase from $3.8 million for the same period in 1999.
The increase in pro forma product revenues was primarily attributable to a
significant increase in the number of transceiver and antenna products we sold.
Pro forma development fees for the six months ended June 30, 2000 were $2.6
million as

31
<PAGE>

compared to $221,000 for the same period in 1999. The increase in pro
forma development fees was attributable to the completion and billing of custom
products for Hughes Network Systems in the 2000 period.

COST OF PRODUCT REVENUES. Pro forma cost of product revenues for the six
months ended June 30, 2000 was $24.8 million, a 248% increase from $6.9 million
for the same period in 1999. This increase in absolute dollars was attributable
primarily to a significant increase in the number of transceiver and antenna
products sold and investments made to increase our manufacturing capacity in the
2000 period. The decrease as a percentage of product revenues was primarily
attributable to increased utilization of our manufacturing capacity. Our cost of
product revenues has exceeded our product revenues due in part to the
historically low volumes of products we have sold and our investments in
increasing manufacturing capacity. Though we believe that utilization of lower
cost technologies will decrease our cost per unit in high volume manufacturing,
we cannot assure you that we will increase our sales of high volume products or
attain or maintain positive gross margins on product revenues.

RESEARCH AND DEVELOPMENT EXPENSES. Pro forma research and development
expenses for the six months ended June 30, 2000 were $6.6 million, a 22%
increase from $5.4 million for the same period in 1999. The increase in absolute
dollars was primarily attributable to an increase in research and development
personnel. The decrease as a percentage of total revenues is primarily
attributable to increased production volume and resulting revenues. We estimate
that the pro forma research and development expenses attributable to development
fees were approximately $693,000 in the six months ended June 30, 2000 and
approximately $2.9 million in the six months ended June 30, 1999. Following this
offering, we intend to significantly increase expenditures in all areas,
including research and development, to execute our business strategy.

SALES AND MARKETING EXPENSES. Pro forma sales and marketing expenses for
the six months ended June 30, 2000 were $1.3 million, a 118% increase from
$595,000 for the same period in 1999. The increase in absolute dollars was
primarily attributable to an increase in sales and marketing personnel and
increased promotional activities. The decrease as a percentage of total revenues
is primarily attributable to increased production volume and resulting revenues.
Following this offering, we intend to significantly increase expenditures in
sales and marketing.

GENERAL AND ADMINISTRATIVE EXPENSES. Pro forma general and administrative
expenses for the six months ended June 30, 2000 were $2.9 million, a 32%
increase from $2.2 million for the same period in 1999. The increase in absolute
dollars was primarily attributable to increased finance, human resources and
information technology personnel and infrastructure expenses. The decrease as a
percentage of total revenues is primarily attributable to increased production
volume and resulting revenues. We expect that general and administrative
expenses will increase in absolute dollars in future periods, but to decrease as
a percentage of total revenues.

INTEREST EXPENSE AND OTHER, NET. Interest expense and other, net, for the
six months ended June 30, 2000 was $324,000, a 49% decrease from $638,000 for
the same period in 1999. The decrease was primarily attributable to an increase
in interest income generated from larger cash balances in the later period.

HISTORICAL RESULTS OF OPERATIONS

ENDGATE

NINE MONTHS ENDED MARCH 31, 2000 AND 1999

REVENUES. Total revenues for the nine months ended March 31, 2000 were
$5.1 million, a 292% increase from $1.3 million for the same period in 1999. For
the nine months ended March 31, 2000, sales to Hughes Network Systems and Allgon
each accounted for over 10% of Endgate's total revenues. For the nine months
ended March 31, 1999, sales to Hughes Network Systems

32
<PAGE>

accounted for over 10% of Endgate's revenues. Product revenues for the nine
months ended March 31, 2000 were $2.4 million, a 174% increase from $875,000 for
the same period in 1999. The increase in product revenues was primarily
attributable to a significant increase in the volume of transceiver and antenna
products sold. Development fees for the nine months ended March 31, 2000 were
$2.7 million, a 490% increase from $458,000 for the same period in 1999. The
increase in development fees was attributable to the completion and billing of
custom products for Hughes Network Systems in the 2000 period.

COST OF PRODUCT REVENUES. Cost of product revenues for the nine months
ended March 31, 2000 was $9.0 million, a 100% increase from $4.5 million for the
same period in 1999. This increase in absolute dollar amount was attributable
primarily to a significant increase in the volume of transceiver and antenna
products sold and investments made to increase Endgate's manufacturing capacity.
The decrease as a percentage of product revenues was primarily attributable to
increased absorption of fixed overhead costs due to increased production volume.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses for
the nine months ended March 31, 2000 were $8.1 million, an 11% increase from
$7.3 million for the same period in 1999. The increase was primarily
attributable to an increase in research and development personnel. We estimate
the research and development expenses attributable to development fees were
approximately $1.8 million in the nine months ended March 31, 2000 and
approximately $3.7 million in the nine months ended March 31, 1999.

SALES AND MARKETING EXPENSES. Sales and marketing expenses for the nine
months ended March 31, 2000 were $904,000, a 70% increase from $531,000 for the
same period in 1999. The increase was primarily attributable to an increase in
sales and marketing personnel and increased promotional activities.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the nine months ended March 31, 2000 were $1.5 million, a 25% increase from
$1.2 million for the same period in 1999. The increase was primarily
attributable to the addition of personnel, an increase in information technology
infrastructure costs and year 2000 upgrades to Endgate's internal systems.

INTEREST EXPENSE AND OTHER, NET. Interest expense and other, net, for the
nine months ended March 31, 2000 was $624,000, a 7% increase from $582,000 in
the comparable period in fiscal 1999. The increase was primarily attributable to
higher interest rates and higher average debt balances in the later period.

YEARS ENDED JUNE 30, 1999, 1998 AND 1997

REVENUES. Total revenues for the year ended June 30, 1999 were $1.6
million, a 16% decrease from $1.9 million for the year ended June 30, 1998.
Total revenues for the year ended June 30, 1998 increased 36% from $1.4 million
in the year ended June 30, 1997. In the years ended June 30, 1999 and 1998,
sales to Hughes Network Systems and Harris Corporation each represented over 10%
of Endgate's total revenues. In the year ended June 30, 1997, sales to Harris
Corporation represented over 10% of Endgate's total revenues.

Product revenues for the year ended June 30, 1999 were $1.1 million, a
31% decrease from $1.6 million for the year ended June 30, 1998. Product
revenues for the year ended June 30, 1998 increased 45% from $1.1 million in the
year ended June 30, 1997. The changes in product revenues were primarily
attributable to fluctuations in the number of products sold during the periods.
Prior to 2000, Endgate did not ship any products in significant volume.

Development fees for the year ended June 30, 1999 were $519,000, a 39%
increase from $373,000 for the year ended June 30, 1998. Development fees for
the year ended June 30, 1998 increased 56% from $239,000 for the year ended
June 30, 1997. Development fees during each

33
<PAGE>

of these periods were generated primarily as a result of non-recurring
engineering revenues for development of an outdoor unit product to Hughes
Network Systems.

COST OF PRODUCT REVENUES. Cost of product revenues for the year ended
June 30, 1999 was $5.8 million, a 38% increase from $4.2 million for the year
ended June 30, 1998. Cost of product revenues for the year ended June 30, 1998
increased 5% from $4.0 million in the year ended June 30, 1997. These increases
were attributable primarily to investments in increasing manufacturing capacity.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses for
the year ended June 30, 1999 were $9.8 million, a 61% increase from $6.1 million
for the year ended June 30, 1998. Research and development expenses for the year
ended June 30, 1998 remained flat as compared to $6.2 million for the year ended
June 30, 1997. The increase from the year ended June 30, 1998 to the year ended
June 30, 1999 was primarily attributable to increased expenses associated with
the Hughes Network Systems development contract, the addition of staff to
support new design projects and the retention of consultants to augment in-house
expertise. We estimate the research and development expenses attributable to
development fees were approximately $5.1 million and $759,000 for the years
ended June 30, 1999 and 1998.

SALES AND MARKETING EXPENSES. Sales and marketing expenses for the year
ended June 30, 1999 were $751,000, a 54% increase from $489,000 for the year
ended June 30, 1998. Sales and marketing expenses for the year ended June 30,
1998 increased 3% from $474,000 in fiscal 1997. The increase from the year ended
June 30, 1998 to the year ended June 30, 1999 was primarily attributable to an
increase in sales and marketing personnel.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the year ended June 30, 1999 were $1.8 million, a 20% increase from $1.5
million for the year ended June 30, 1998. General and administrative expenses
for the year ended June 30, 1998 increased 15% from $1.3 million for the year
ended June 30, 1997. The increase from the year ended June 30, 1998 to the year
ended June 30, 1999 was primarily attributable to increased salary and benefits
expenses and investments in upgrading network equipment. The increase from the
year ended June 30, 1997 to the year ended June 30, 1998 was primarily
attributable to increased salary and facilities-related expenses.

INTEREST INCOME (EXPENSE) AND OTHER, NET. Interest expense and other,
net, for the year ended June 30, 1999 was $607,000, a 356% increase from
$133,000 for the year ended June 30, 1998. Interest income and other, net, for
the year ended June 30, 1997 was $300,000. The increase in expense from the year
ended June 30, 1998 to the year ended June 30, 1999 was primarily attributable
to increased financing leases of manufacturing and engineering equipment. The
change from the year ended June 30, 1997 to the year ended June 30, 1998 was
primarily attributable to lower amounts of interest income earned due to smaller
cash balances in the 1998 period.

MILLIWAVE

SIX MONTHS ENDED JUNE 30, 2000 AND 1999

REVENUES. Total revenues for the six months ended June 30, 2000 were
$15.5 million, a 356% increase from $3.4 million in the comparable period in
1999. Product revenues for the six months ended June 30, 2000 were $14.5
million, a 326% increase from $3.4 million in the comparable period in 1999. The
increase in product revenues was primarily attributable to the higher levels of
production on Milliwave's automated assembly and test lines and the merger with
Endgate in March 2000. Milliwave did not derive any revenues from development
fees prior to the merger. Development fees of $1.0 million for the six months
ended June 30, 2000 are attributable to the merger with Endgate. For the six
months ended June 30, 2000, sales to TRW, for satisfaction of TRW's agreements
with Nokia and Nortel Networks and sales to Hughes Network

34
<PAGE>

System each accounted for over 10% of Milliwave's total revenues. For the six
months ended June 30, 1999, sales to TRW, for satisfaction of TRW's agreements
with Nokia and sales to each Rockwell and Lockheed Martin accounted for over 10%
of Milliwave's total revenues.

COST OF PRODUCT REVENUES. Cost of product revenues for the six months
ended June 30, 2000 was $19.2 million, a 395% increase from $3.9 million in the
comparable period of 1999. The increase was primarily attributable to increased
levels of production and investments in increasing manufacturing capacity.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses for
the six months ended June 30, 2000 were $3.7 million, as compared to $142,000
for the comparable period in 1999. The increase was primarily attributable to
the acquisition of Endgate's research and development operations in March 2000
and a one-time allocation from TRW for research and development expenses.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the six months ended June 30, 2000 were $3.1
million, a 138% increase from $1.3 million for the comparable period in 1999.
The increase was primarily attributable to additional personnel and
infrastructure expenses, a substantial portion of which were attributable to the
merger with Endgate. Milliwave was provided corporate services,such as design,
finance and legal, by TRW. Corporate allocations were charged for these
services, and accounted for as a component of selling, general and
administrative expenses. Most of these corporate services and related charges
have ceased, and we generally provide those services internally or contract with
outside providers to provide them.

YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

REVENUES. Total revenues for 1999 were $12.4 million, a 77% increase from
$7.0 million for 1998. Revenues for 1998 increased 32% from $5.3 million in
1997. The increase from 1998 to 1999 was primarily attributable to the
commencement of manufacturing of products for Nokia and Nortel Networks in 1999
and the increase from 1997 to 1998 was primarily attributable to increases in
shipments to two large customers, P-Com and Hughes Network Systems, as well as
an order secured through TRW after the acquisition of Milliwave by TRW in late
1997. In 1999, sales to TRW on behalf of Nokia and Nortel Networks and sales to
Rockwell each accounted for over 10% of Milliwave's revenues. In 1998, sales to
P-Com, Hughes Network Systems and Rockwell each accounted for over 10% of
Milliwave's revenues. In 1997, sales to P-Com, Lockheed Martin and SPC
Electronic America each accounted for over 10% of Milliwave's revenues.

COST OF PRODUCT REVENUES. Cost of product revenues for 1999 was $11.2
million, an 87% increase from $6.0 million for 1998. Cost of product revenues
for 1998 increased 40% from $4.3 million in 1997. These increases were
attributable primarily to growth in revenues and costs associated with the
introduction of automated manufacturing.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses for
1999 were $326,000, as compared to $286,000 for 1998. Research and development
expenses were $254,000 in 1997. Prior to 1999, Milliwave primarily utilized the
resources of TRW for its research and development expertise. In 1999, Milliwave
began hiring design personnel in order to augment the services that it received
from TRW.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for 1999 were $2.4 million, 20% decrease from $3.0
million for 1998. Selling, general and administrative expenses for 1998
increased 150% from $1.2 million in 1997. The increase from 1997 to 1998 was
primarily attributable to building Milliwave's infrastructure in order to
support higher production volumes, including adding personnel in finance,
accounting, human resources and management. The decrease in selling, general and
administrative expenses from 1998 to 1999 was

35
<PAGE>

primarily attributable to one time personnel relocation expenses incurred in
1999.

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth unaudited statement of operations data
for the six quarters ended June 30, 2000, as well as this information expressed
as a percentage of total pro forma revenues for the periods indicated. These
unaudited quarterly financial data have been derived from our pro forma
financial statements and have been prepared on the same basis as the unaudited
financial statements contained in this prospectus. The data for the quarter
ended June 30, 2000 are presented on an actual basis and the data for the five
quarters ended March 31, 2000 are presented on a pro forma basis giving effect
to our merger with Milliwave as if it were completed on January 1, 1999. This
unaudited pro forma quarterly financial information has been derived from our
unaudited pro forma financial statements and has been prepared on the same basis
as our pro forma financial statements contained in this prospectus. Operating
results for any quarter are not necessarily indicative of results for any future
period.

PRO FORMA ACTUAL
---------------------------------------------------------- ----------
THREE MONTHS ENDED
----------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1999 1999 1999 1999 2000 2000
---------- ---------- ---------- ---------- ----------- ----------
(in thousands, unaudited)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Product revenues..................... $ 1,602 $ 2,227 $ 4,315 $ 5,601 $ 5,713 $ 10,346
Development fees..................... 160 61 356 725 1,605 946
---------- ---------- ---------- ---------- ----------- ----------
Total revenues..................... 1,762 2,288 4,671 6,326 7,318 11,292
Costs and expenses:
Cost of product revenues............. 3,583 3,344 4,850 6,722 9,245 14,731
Research and development............. 2,801 2,630 2,494 3,000 3,808 2,748
Sales and marketing.................. 252 343 330 391 533 758
General and administrative........... 986 1,205 803 876 1,525 1,392
Amortization of goodwill and other
intangible assets.................. 4,802 4,802 4,802 4,802 4,802 4,802
Amortization of deferred stock
compensation....................... 0 0 279 431 481 1,505
---------- ---------- ---------- ---------- ----------- ----------
Total costs and expenses........... 12,424 12,324 13,558 16,222 20,394 25,936
Loss from operations.................... (10,662) (10,036) (8,887) (9,896) (13,076) (14,644)
Interest income (expense) and other, net (613) (25) 79 (26) (677) 353
---------- ---------- ---------- ---------- ----------- ----------
Net loss................................ $ (11,275) $ (10,061) $ (8,808) $ (9,922) $ (13,753) $ (14,291)
========== ========== ========== ========== =========== ==========

PRO FORMA ACTUAL
---------------------------------------------------------- -----------
THREE MONTHS ENDED
-----------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1999 1999 1999 1999 2000 2000
----------- ----------- ---------- ---------- ---------- -----------
(unaudited)
AS A PERCENTAGE OF REVENUES:
Revenues:
Product revenues..................... 90.9% 97.3% 92.4% 88.5% 78.1% 91.6%
Development fees..................... 9.1 2.7 7.6 11.5 21.9 8.4
----------- ----------- ---------- ---------- ---------- -----------
Total revenues..................... 100.0 100.0 100.0 100.0 100.0 100.0
Operating expenses:
Cost of product revenues............. 203.3 146.2 103.8 106.3 126.3 130.5
Research and development............. 159.0 114.9 53.4 47.4 52.0 24.3
Sales and marketing.................. 14.3 15.0 7.1 6.2 7.3 6.7
General and administrative........... 56.0 52.7 17.2 13.8 20.8 12.3
Amortization of goodwill and other
intangible assets.................. 272.5 209.9 102.8 75.9 65.6 42.5
Amortized stock compensation......... 0.0 0.0 6.0 6.8 6.6 13.3
----------- ----------- ---------- ---------- ---------- -----------
Total operating expenses........... 705.1 538.7 290.3 256.4 278.6 229.6
Loss from operations.................... (605.1) (438.7) (190.3) (156.4) (178.6) (129.6)
Interest income (expense) and other, net (34.8) (1.1) 1.7 (0.4) (9.3) 3.1
----------- ----------- ---------- ---------- ---------- -----------
Net loss................................ (639.9)% (439.8)% (188.6)% (156.8)% (187.9)% (126.5)%
=========== =========== ========== ========== ========== ===========
</TABLE>

36
<PAGE>

Our operating results have fluctuated significantly from quarter to
quarter. We expect these fluctuations to continue. They may occur for several
reasons, including variations in the timing and size of, or cancellations or
reductions of, customer orders and shipments.

PRODUCT REVENUES. Product revenues increased in each of the four quarters
in 1999, primarily as a result of increased shipments in satisfaction of TRW's
agreements with Nokia and, in addition, for the fourth quarter of 1999,
increased shipments in satisfaction of TRW's agreement with Nortel Networks
and our introduction of a new antenna product. There was no significant change
in product revenues from the fourth quarter of 1999 to the first quarter of 2000
due to a slight increase in the number of products we sold, offset by lower
prices to Nokia. Our product revenues increased substantially during the second
quarter of 2000, primarily due to further increases in shipments to Nokia,
Nortel Networks and Hughes Network Systems.

DEVELOPMENT FEES. Development fees were insignificant until the fourth
quarter of 1999. The increase during that quarter and in the first quarter of
2000 was due to shipments of prototype units to Hughes Network Systems.
Development fees were lower in the second quarter of 2000 because we
transitioned to sales of production units, which are reflected in product
revenues, to Hughes Network Systems during that quarter.

COST OF PRODUCT REVENUES. Our cost of product revenues decreased from the
first quarter of 1999 to the second quarter of 1999. The decrease resulted from
reserves for obsolescence taken in the first quarter. Cost of product revenues
increased from the second quarter of 1999 to the fourth quarter of 1999,
primarily as a result of an increased level of production for Nokia. Cost of
product revenues increased substantially from the fourth quarter of 1999 to the
first quarter of 2000, primarily due to investments in equipment, management and
facilities to support anticipated higher production volumes. Cost of product
revenues continued to increase substantially from the first quarter of 2000 to
the second quarter of 2000. This increase was due to continued investment in
manufacturing capacity as well as an increase in component prices from TRW to
Milliwave in connection with the merger. We have experienced increasingly
negative gross margins as a result of these investments in manufacturing
capacity. We believe the investments will result in lower unit costs if our
production volume increases in future quarters.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
decreased from the first to the third quarter of 1999, primarily as a result of
decreasing purchases of materials for Hughes Network Systems products under
development. Research and development expenses increased from the third quarter
of 1999 to the fourth quarter due to increased costs for material and labor to
produce prototype units for Hughes Network Systems. Research and development
expenses increased from the fourth quarter of 1999 to the first quarter of 2000
due to TRW's one-time allocation of research and development expenses to
Milliwave in the first quarter. This allocation had not been made in prior
years. Because there was no allocation of these expenses from TRW after the
merger, research and development expenses decreased from the first quarter to
the second quarter of 2000.

SALES AND MARKETING EXPENSES. Sales and marketing expenses generally
increased over the six quarters ended June 30, 2000, primarily as a result of
increased personnel and spending on marketing programs, particularly in the
first and second quarters of 2000.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased from the first quarter of 1999 to the second quarter of 1999 due
primarily to accrual of Endgate's year end bonuses, which were paid in the third
quarter of 1999. General and administrative expenses decreased in the third
quarter of 1999 compared to the second quarter due to a refinement in our
methodology for assigning costs between operating expenses and production
overhead at Milliwave. From the fourth quarter of 1999 to the first quarter of
2000, general and administrative expenses increased due to consulting expenses
and, in the first quarter, of allocations from TRW for computer services and
management costs. General and administrative expenses

37
<PAGE>

decreased from the first quarter to the second quarter of 2000 because there was
no TRW allocation after the merger.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, Endgate financed its operations and funded its capital
expenditures through the private sale of equity securities, supplemented by
equipment leases. Aggregate net proceeds to date from Endgate's private equity
financings were approximately $90 million. Prior to the merger, Milliwave
primarily financed its operations and funded its capital expenditures through
operating cash and investments by its parent, TRW. As of June 30, 2000, we had
$36.9 million in cash, cash equivalents and short term investments and $36.6
million in working capital.

On a pro forma basis, net cash used in operating activities was $19.1
million in 1999 and $12.7 million in the six months ended June 30, 2000. Net
cash used in Endgate's operating activities was $8.8 million, $9.0 million and
$15.1 million in the year ended June 30, 1997, 1998 and 1999 as was primarily
attributable to net losses, offset by non-cash charges for depreciation and
amortization. Net cash used in Milliwave's operating activities was $99,000 in
1997 and $2.3 million in 1998 and net cash provided by Milliwave's operating
activities was $472,000 in 1999. For all such periods, net cash used in
operating activities was primarily used to fund operating loss.

On a pro forma basis, net cash used in investing activities was $7.9
million in 1999 and $3.5 million in the six months ended June 30, 2000. Net cash
used in Endgate's investing activities was $495,000, $375,000 and $1.5 million
in the year ended June 30, 1997, 1998 and 1999. Net cash used in Milliwave's
investing activities was $11.0 million in 1997, $2.0 million in 1998 and
$7.4 million in 1999. For all such periods, investing activities consisted
primarily of purchases of short term investments and capital expenditures.

On a pro forma basis, net cash provided by financing activities was $26.6
million in 1999 and $51.0 million in the six months ended June 30, 2000. Net
cash used in Endgate's financing activities was $1.5 million in the year ended
June 30, 1997, and net cash provided by Endgate's financing activities was $14.2
million and $19.9 million in the year ended June 30, 1998 and 1999. Net cash
provided by Milliwave's financing activities was $11.0 million in 1997, $4.1
million in 1998 and $7.0 million in 1999. For all such periods, net cash
provided by financing activities consisted primarily of proceeds from the
issuance of preferred stock and proceeds from loans and capital leases, offset
by repayments of loans and capital leases.

As we execute our strategy, we expect significant increases in our
operating expenses, especially in sales, marketing and research and development.
Presently, we anticipate that our existing capital resources and the proceeds
from this offering will meet our operating and investing needs for at least the
next 12 months. After that time, we cannot be certain that additional funding
will be available on acceptable terms or at all. If we require additional
capital resources to grow our business, execute our operating plans or acquire
complementary technologies or businesses at any time in the future, we may seek
to sell additional equity or debt securities or secure bank financing, which may
result in additional dilution to our stockholders.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards, or SFAS, 133, entitled "Accounting for
Derivative Instruments and Hedging Activities." SFAS 133 provides a
comprehensive and consistent standard for the recognition and measurement of
derivative instruments and hedging activities. SFAS 133 was to be effective for
fiscal years beginning after June 15, 1999. However, in July 1999, the Financial
Accounting Standards Board issued SFAS 137, entitled "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133." SFAS 137 defers for one year the effective date of SFAS 133
so that it will now apply to all fiscal quarters of all fiscal years beginning
after June 15, 2000. We believe the adoption of SFAS 133 will not have a
material impact on our consolidated financial position, results of operations
and cash flows.

38
<PAGE>

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin, or SAB, No. 101, entitled "Revenue Recognition." SAB 101
provides guidance on the recognition, presentation and disclosure of revenues in
financial statements filed with the Securities and Exchange Commission. SAB 101
outlines the basic criteria that must be met to recognize revenues and provides
guidance for disclosures relating to revenue recognition policies. We believe
that our revenue recognition policy is in compliance with the provisions of SAB
101 and that the adoption of SAB 101 had no material effect on our financial
position or results of operations.

MARKET RISK

We develop products in the United States and market our products in North
America and, to a lesser extent, in Europe and the rest of the world. As a
result, our financial results could be affected by factors such as changes in
foreign currency rates or weak economic conditions in foreign markets. Because
all of our revenues are currently denominated in U.S. dollars, a strengthening
of the dollar could make our products less competitive in foreign markets.

We have an investment portfolio of money market funds. The fixed income
certificates of deposit, like all fixed income securities, are subject to
interest rate risk and will fall in value if market interest rates increase. We
attempt to limit this exposure by investing primarily in short term securities.
In view of the nature and mix of our total portfolio, a 10% movement in market
interest rates would not have a significant impact on the total value of our
portfolio as of December 31, 1999, either on a historical or pro forma basis
giving effect to our merger with Milliwave.

Although a portion of our interest expense is sensitive to changes in the
general level of United States interest rates because some of our debt
arrangements are based on a margin above the prime rate, we believe the
potential change would not have a material impact on our operating results.

39
<PAGE>
BUSINESS

OVERVIEW

We are a leading provider of RF subsystems that enable the transmission
and reception of data signals in broadband wireless systems. We sell our
products to wireless systems integrators that provide the broadband wireless
equipment used by communications service providers to offer data services. Our
customers use our products in high speed cellular backhaul, point-to-point
access and point-to-multipoint access applications. Wireless systems integrators
who use our products in their broadband wireless access systems include Allgon,
Hughes Network Systems, Nokia, Nortel Networks, P-Com, Rockwell International,
Toshiba America and WinNet MCS.

We leverage our proprietary technologies and RF design expertise to
design and manufacture products at multiple levels of integration to best meet
our customers' requirements. Our products include RF modules, integrated
transceivers, broadband antennas and outdoor units. We have developed
proprietary circuit technologies that enable us to design RF circuits to
minimize labor costs and the use of expensive gallium arsenide material. As we
design our own RF circuits, we have the flexibility to optimize our product
designs because we are not limited to standard, commercially available gallium
arsenide devices. We use third-party semiconductor fabrication facilities to
manufacture the gallium arsenide devices we design. This gives us the
flexibility to use the process technology that is best suited for each
application and eliminates the need for us to invest in and maintain our own
semiconductor fabrication facilities.

INDUSTRY BACKGROUND

DEMAND FOR HIGH SPEED DATA TRANSMISSION SERVICES

The growth of the Internet as a medium to share data, collaborate and
conduct commerce across and within enterprises has led to a dramatic increase in
the volume of data traffic on communications networks. As a result,
organizations are conducting an increasing amount of business electronically and
want the ability to electronically transmit large amounts of data rapidly and
inexpensively. This demand for high speed data transmission services is further
increased by recent growth in the demand for "anytime, anywhere" data access
from mobile devices such as cellular phones, which has caused communications
service providers to adopt high speed mobile data transfer standards such as
"third generation" cellular, or 3G. To meet the demand for high speed data
services, communications service providers must upgrade their network
infrastructure to increase system speed and capacity.

THE ACCESS NETWORK BOTTLENECK AND LIMITATIONS OF ALTERNATIVE APPROACHES

Communications networks broadly consist of three interconnected segments:

o subscribers' internal networks, which can typically transmit data at
speeds of up to 100 million bits of data, or megabits, per second,
using readily available technology.

o the trunking network, which transports large, aggregated amounts of
data to and from multiple points within a communications network,
typically over long distances. Communications service providers have
installed fiber optic cables and associated equipment to cover most
of the trunking network to enable data transmission rates of more
than 10,000 megabits per second.

o access networks, which connect subscribers' internal networks to the
trunking network. Access networks today are largely based on copper
wiring and typically provide data transmission rates of only up to
1.5 megabits per second. As a result, access networks are a
bottleneck between subscriber networks and the trunking network and
limit a communications service provider's ability to offer high speed
data services.

40
<PAGE>

To address the limitations of today's primarily copper-based access
networks, communications service providers are adopting new technologies. The
primary alternatives are digital subscriber line, or DSL, cable, fiber optic
cable and broadband wireless systems. Each of these alternatives differs in
features such as bandwidth, ease of deployment and cost. DSL is a technology
that improves the data transmission capacity of copper-based access networks to
enable high speed asymmetric data transmission or lower speed symmetric data
transfer. In asymmetric data transmission, the transfer rate from the subscriber
to the network is significantly less than the transfer rate from the network to
the subscriber. In symmetric data transmission, the transfer rates to and from
the subscriber are equal. Cable networks were designed to transmit video and
generally support data transmission rates of up to 10 megabits per second. Cable
networks are, however, unavailable to most businesses because they generally are
installed only in residential areas. In addition, they generally only support
asymmetric data transmission. Fiber optic cable networks offer the highest
capacity, typically supporting data transmission rates of 155 megabits per
second or higher. However, only a small minority of businesses have direct
access to fiber optic cable networks, and communications service providers would
need to incur significant costs to extend fiber optic cable to include all
access networks. In addition, the cost and time involved in obtaining permission
to lay new cable, or "right of way," may limit the attractiveness of fiber
deployment in many areas.

EMERGENCE OF BROADBAND WIRELESS ACCESS

Broadband wireless access systems use high frequency radios to link
multiple points in a communications network. These systems enable high speed
data transmission between buildings or between a fixed location, such as a
corporate office, and the trunking network. These can be deployed in either a
point-to-point or point-to-multipoint configuration. In addition, point-to-point
systems can be used to connect buildings in a high capacity ring known as
"wireless fiber." They are also used for high capacity data transmission from a
cellular base station to the trunking network, which is commonly referred to as
cellular backhaul. Today's broadband wireless access networks can support data
transmission rates of up to 155 megabits per second, although the most common
deployments support data transmission rates of 15 megabits to 50 megabits per
second. Communications service providers can deploy broadband wireless access
systems more rapidly than other alternatives because they do not involve laying
cables or require time consuming right of way acquisition. A communications
service provider can configure a broadband wireless access network to offer
symmetric or asymmetric data transmission. This flexibility enables the service
provider to match its services to customers' requirements.

Broadband wireless access has been facilitated by deregulation in the
telecommunications industry. Regulatory authorities around the world have
licensed specific frequency bands to a number of incumbent and new
communications service providers in the 18 gigahertz (GHz) to 95 GHz frequency
range for high speed data transmission services. Communications service
providers are using broadband wireless access systems operating at these
frequencies to upgrade their networks or build new networks to offer broadband
services. The Strategis Group, an independent research firm, estimates that the
customer premises equipment market alone will grow from approximately $443
million in 2000 to $5.4 billion in 2004. This market encompasses sales of the
equipment installed at subscribers' premises to complete the link of a broadband
wireless access system to the subscribers' internal networks.

41
<PAGE>
CHALLENGES FACING WIRELESS SYSTEMS INTEGRATORS AND THE NEED FOR RF
SUBSYSTEM SUPPLIERS

Wireless systems integrators provide the equipment that communications
service providers use to build broadband wireless access networks. Wireless
systems integrators generally do not design or manufacture the RF subsystems
that are used in broadband wireless equipment to transmit and receive data. To
meet the needs of communications service providers, differentiate their products
and compete most effectively, wireless systems integrators require RF subsystem
suppliers that offer the following advantages:

HIGH PERFORMANCE. Wireless systems integrators want RF subsystems that
offer the highest practicable data transmission rates within a given segment of
the radio frequency spectrum. Higher data transmission rates generally enable
communications service providers to support a larger number of subscribers or a
higher level of service.

ABILITY TO MIGRATE TO LOW COST, HIGH VOLUME SOLUTIONS. Wireless systems
integrators face increasing pressure to offer lower cost solutions as compared
to providers of alternatives to broadband wireless access. They seek suppliers
that not only offer them cost effective RF subsystems but also have the ability
to migrate from high cost, low volume to low cost, high volume solutions.

SHORT TIME-TO-MARKET. The speed with which a wireless systems integrator
can address new frequencies and emerging applications is critical to maintaining
its market leadership. Because each new frequency and application requires a new
RF subsystem, wireless systems integrators are dependent upon the design and
manufacturing expertise of their RF subsystem suppliers to rapidly introduce new
products to market.

MULTIPLE LEVELS OF INTEGRATION. To meet varying product requirements,
wireless systems integrators require the flexibility to purchase subsystems at
different levels of integration. This flexibility enables wireless systems
integrators to lower design and manufacturing costs.

ACCESS TO HIGH VOLUME MANUFACTURING CAPABILITY. Access to an adequate
supply of RF subsystems is critical for a wireless systems integrator to
manufacture and deliver its products in sufficient volumes to meet demand and
maintain and extend its market position.

We believe that, although there is significant demand for wireless
subsystems today, few suppliers comprehensively address the challenges facing
wireless systems integrators. Many RF subsystem suppliers use labor-intensive
circuit manufacturing methods that limit their ability to produce subsystems in
high volume and demonstrate a path to low cost manufacturing. Some RF subsystem
suppliers have limited in-house RF design expertise and rely on third parties
for their circuit designs. In addition, we believe some RF subsystem suppliers
lack the ability to rapidly and cost effectively customize their products as may
be required by many wireless systems integrators.

OUR SOLUTION

We are a leading provider of RF subsystems to wireless systems
integrators. We design and manufacture a broad portfolio of products, from RF
modules to fully integrated transceivers and outdoor units. The primary benefits
of our RF subsystems include:

SUPERIOR PERFORMANCE THROUGH TECHNOLOGICAL LEADERSHIP. We have extensive
experience in the design and manufacture of high performance RF subsystems. We
have a technical team with broad expertise in device physics, circuit design,
antenna modeling and design, transceiver design, test engineering and other
disciplines. Our technical leadership enables us to optimize our products for
key performance factors, such as spectral efficiency, which is the data
transmission rate in a given segment of the radio frequency spectrum. We have
extensive experience in the design of RF devices based on gallium arsenide, the
semiconductor material most widely used in broadband wireless access
applications. This design expertise gives us the flexibility to optimize our
product designs because we are not limited to standard commercially available
gallium arsenide devices. We use

42
<PAGE>

third-party semiconductor fabrication facilities to manufacture the gallium
arsenide devices we design. Our use of third-party semiconductor facilities
gives us the flexibility to use the process technology that is best suited for
each application and eliminates the need for us to invest in and maintain our
own semiconductor fabrication facilities.

PATH TO LOW COST, HIGH VOLUME MANUFACTURING THROUGH PATENTED CIRCUIT
TECHNOLOGY. By using a combination of our proprietary circuit and process
technologies, we are able to meet our customers' volume and time-to-market
requirements. Traditional hybrid microwave integrated circuits, or HMICs, for
broadband wireless applications have many bond wires that must be individually
tested and adjusted, or tuned, during the manufacturing process. Our monolithic
microwave integrated circuits, or MMICs, require a small fraction of the bond
wires used in HMICs, allowing us to produce them using automated assembly
techniques. However, MMICs incorporate large amounts of costly gallium arsenide.
Our patented multi-chip integrated circuit, or MCIC, which we refer to as
"flip-chip," technology enables us to design and manufacture RF circuits with
small amounts of gallium arsenide material and significantly fewer wire bonds
that require individual tuning. As a result, MCIC circuits lend themselves to
automated manufacturing processes that enable high product quality and
reliability and lower unit costs at high volume.

RAPID DESIGN AND PROTOTYPE CAPABILITY. We have developed an extensive
library of RF circuit designs that allow us to rapidly and economically combine
standard circuits into custom assemblies with various performance capabilities
and support for multiple frequencies. We also have extensive in-house RF design
expertise that allows us to work jointly with our customers in designing
broadband wireless subsystems. We have the expertise to use traditional circuit
manufacturing technologies to rapidly prototype and demonstrate the feasibility
of a design. After prototyping, we can rapidly modify the circuit design to
utilize our proprietary circuit technology for high volume manufacturing. We
believe that this ability to migrate from prototype to volume production in a
short period of time is an important competitive advantage.

BROAD PRODUCT PORTFOLIO. We offer a range of products, from RF modules to
integrated transceivers and outdoor units. This allows wireless systems
integrators to select the products that best complement their internal
capabilities. Our product portfolio supports a broad range of frequencies, from
18 GHz to 95 GHz, and addresses multiple market applications. This enables
wireless systems integrators to rapidly design products for new frequencies or
applications.

HIGH VOLUME PRODUCTION CAPABILITY. We believe we are one of the largest
suppliers of RF subsystems focused on broadband wireless solutions. Our
automated assembly and testing capabilities and multiple manufacturing
facilities and production lines allow us to rapidly achieve high volume
production of our products. Our long term gallium arsenide device supply
agreement with TRW further enhances our manufacturing capabilities. For more
information on our strategic relationship with TRW, see the section of this
prospectus entitled "TRW Relationship."

STRATEGY

Our objective is to be the leading global supplier of RF subsystems for
broadband wireless applications. We intend to become the RF subsystem supplier
of choice for broadband wireless systems designed by leading wireless systems
integrators. The major elements of our strategy include:

EXTEND TECHNOLOGICAL LEADERSHIP. We will continue to invest in research
and development, seek to attract the most talented engineers and scientists, and
build on our manufacturing technologies to remain a technological leader. We
intend to continue offering products that are optimized for the performance
factors that are most important to our customers. We also intend to continue
protecting our technological innovations through patents and other means.

TARGET NEW FREQUENCIES AND EMERGING APPLICATIONS. We currently offer a
wide range of products that support the principal frequency bands used for
broadband wireless access. We plan to

43
<PAGE>

offer these products globally as regulatory authorities license new bands of the
frequency spectrum for broadband wireless access applications. We intend to
aggressively offer products for new frequency bands and emerging market
applications.

PROVIDE BEST-IN-CLASS MANUFACTURING CAPABILITY. Our circuit design,
manufacturing and testing technologies and continuous improvement programs have
helped to bring manufacturing innovations to an industry that has historically
utilized labor intensive manufacturing techniques. We also intend to continue
our philosophy of building capacity in advance of demand so that we can offer
short product lead times to our customers.

MAINTAIN RAPID PROTOTYPING CAPABILITY. We intend to maintain our position
as a supplier of choice through our ability to rapidly prototype a design to
meet our customers' needs and also meet their high volume manufacturing demands.
We believe we can achieve this with our multiple design and manufacturing
techniques.

LEVERAGE STRATEGIC RELATIONSHIP WITH TRW. We believe our relationship
with TRW gives us a competitive advantage in designing and manufacturing our
products. Our supply agreement with TRW provides us with a long term supply of
gallium arsenide devices. We believe that our supply of these devices from TRW
is a competitive advantage because the supply of gallium arsenide devices may
become constrained in the future as the broadband wireless access market grows.
In addition, we have access to TRW's research and design expertise in the areas
of RF and digital circuit design technologies. In light of the competitive
market for professionals with circuit design expertise, we believe this access
to TRW's design expertise represents a significant competitive advantage.

44
<PAGE>

PRODUCTS

Our products include amplifiers, frequency converters, frequency sources,
broadband antennas, integrated transceivers and outdoor units that enable the
transmission and reception of data signals in broadband wireless access
networks.

As illustrated in the following diagram, our products are primarily used
in the outdoor portion of a broadband wireless system.

[GRAPHIC APPEARS HERE]

We supply our products at multiple levels of integration, depending upon
the needs of our customers, as indicated in the shaded areas in the diagrams
below.

[GRAPHIC APPEARS HERE]

<PAGE>

Our products are described in the following table:
<TABLE>
<CAPTION>
---------------------------------- --------------------------------------------- -----------------------------------
PRODUCTS DESCRIPTION APPLICATION
---------------------------------- --------------------------------------------- -----------------------------------
<S> <C> <C>
---------------------------------- --------------------------------------------- -----------------------------------
RF MODULES These modules are the building blocks for These modules are used to provide
cF subsystems. They include low noise basic RF functions in broadband
Rmplifiers, power amplifiers, frequency wireless systems and are often
converters and frequency multipliers. used to rapidly develop product
prototypes.
---------------------------------- --------------------------------------------- -----------------------------------

---------------------------------- --------------------------------------------- -----------------------------------
INTEGRATED TRANSCEIVERS These units combine the high frequency Our transceivers transmit and
transmit and receive functions of a radio receive data signals in a variety
system into one package. of broadband wireless
applications.
---------------------------------- --------------------------------------------- -----------------------------------

---------------------------------- --------------------------------------------- -----------------------------------
BROADBAND ANTENNAS These elements in a wireless system radiate Our compact directional antennas
and receive high frequency signals. Our are used in point-to-point,
sector antennas are designed to minimize cellular backhaul and
interference in adjacent sectors. point-to-multipoint systems.
Sector antennas are used for the
hub terminals of
point-to-multipoint systems.
---------------------------------- --------------------------------------------- -----------------------------------

---------------------------------- --------------------------------------------- -----------------------------------
OUTDOOR UNITS These subsystems provide complete radio Outdoor units are used in all
functionality in a single, environmentally types of broadband wireless
sealed package. They include a transceiver systems as a complete RF
module, an electronics and control section subsystem. For
and an antenna. Outdoor units transmit and point-to-multipoint applications,
receive radio signals to and from one or we supply both hub and subscriber
more other outdoor units. versions.
---------------------------------- --------------------------------------------- -----------------------------------
</TABLE>

TECHNOLOGY AND PRODUCT DEVELOPMENT

CIRCUIT TECHNOLOGIES

We use three circuit technologies to offer our customers the most cost
effective solutions. Each of these technologies has unique attributes. We choose
the technology most appropriate to each customer's performance and volume
requirements. Our circuit technologies enable us to migrate products from
rapidly produced prototypes to scalable high volume designs.

46
<PAGE>

HMIC AND MMIC TECHNOLOGIES. These circuit technologies are more
traditional approaches commonly used in the high frequency circuit and module
industry.

[GRAPHIC APPEARS HERE]

HYBRID MICROWAVE INTEGRATED CIRCUITS. HMICs consist of multiple gallium arsenide
devices bonded to ceramic substrates and interconnected with hundreds of bond
wires. Many bond wires must be individually tuned, which makes the production of
HMICs labor-intensive. We use HMIC technology for rapid prototyping and low
volume production.

MONOLITHIC MICROWAVE INTEGRATED CIRCUITS. MMICs consist of large gallium
arsenide devices that contain both active circuit regions and interconnection
elements that are then bonded to ceramic substrates. MMICs require a small
fraction of the number of bond wires used in HMICs, which makes MMICs suitable
for automated assembly. They utilize substantially more gallium arsenide and
require more design time and expertise than HMICs.

MCIC ("FLIP-CHIP") TECHNOLOGY. Our patented multi-chip integrated
circuit, or "flip-chip," technology enables us to design and manufacture RF
circuits that use smaller amounts of gallium arsenide material than MMIC
circuits and have far fewer wire bonds that require individual tuning. As a
result, MCIC circuits lend themselves to automated manufacturing processes,
which enable high product quality and reliability and lower unit cost at high
volume.

[GRAPHIC APPEARS HERE]

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<PAGE>

RESEARCH AND DEVELOPMENT ACTIVITIES

Our research and development activities are focused on developing new
products, improving key performance characteristics and developing new circuit
designs and materials technologies to reduce costs. Our product development
approach emphasizes meeting the demands in these areas by leveraging the
following:

EXTENSIVE LIBRARY OF CIRCUIT DESIGNS. Our extensive library of circuit
designs enables us to quickly produce prototypes in response to our customers'
time-to-market demands.

BREADTH OF EXPERTISE. We are experienced in a broad range of technical
disciplines and possess the know-how to design products at multiple levels of
integration.

COMPUTER MODELING CAPABILITIES. Our proprietary computer modeling
capabilities are designed to minimize the number of iterations required to
develop cost effective designs.

On a pro forma basis giving effect to the Milliwave merger, our research
and development expenses were $10.9 million in 1999 and $6.6 million in the six
months ended June 30, 2000. Endgate's historical research and development
expenses were $8.1 million in the nine months ended March 31, 2000, $9.8 million
in the year ended June 30, 1999, $6.1 million in the year ended June 30, 1998
and $6.2 million in the year ended June 30, 1997. Because Milliwave was a
wholly-owned subsidiary of TRW and utilized the research and development
capabilities of its parent, it did not incur significant research and
development expenses prior to the merger.

Our current product development efforts include:

HIGH FREQUENCY SEMICONDUCTOR DEVICES. We concentrate on developing
devices that minimize the use of gallium arsenide material. Our use of
third-party gallium arsenide fabrication facilities enables us to use the best
process technology for each of these devices.

HIGH FREQUENCY CIRCUITS, MODULES AND INTEGRATED TRANSCEIVER UNITS. We use
both custom and commercially available devices, combined with high frequency
interconnects and advanced packaging techniques, to develop complete functional
modules such as power amplifiers, frequency converters and integrated
transceiver units. We are currently developing various modules for emerging
applications, such as a transceiver for the 95 GHz frequency band, and a next
generation, lower cost family of circuits and modules.

BROADBAND ANTENNAS AND OUTDOOR UNITS. Using proprietary modeling tools,
we are designing high performance broadband antennas in customer-specific and
standard configurations. We combine our modules, transceivers and antennas to
create custom outdoor unit designs to meet our customers' needs.

CUSTOMERS

We sell our products to global wireless systems integrators and equipment
manufacturers. The ten customers that generated the greatest proportion of our
revenues in the six months ended June 30, 2000, on a pro forma basis giving
effect to our merger with Milliwave, were:

Allgon Nortel Networks
Anritsu P-Com
Hughes Network Systems Rockwell International
Lockheed Martin Toshiba America
Nokia WinNet MCS

With the exception of Nokia and Nortel Networks, the revenues
attributable to each of these customers were generated through direct sales by
us to them. Nokia and Nortel

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<PAGE>

Networks are not our direct customers; instead, we deliver products directly to
them under exclusive production and supply contracts we have with TRW, which has
corresponding agreements with Nokia and Nortel Networks. We entered into these
agreements with TRW in connection with our merger with Milliwave in March 2000.
Under a long term production agreement, we sell two different outdoor units to
Hughes Network Systems.

We expect Nokia, Nortel Networks and Hughes Network Systems to account
for a majority of our revenues for the foreseeable future. On a pro forma basis
giving effect to our merger with Milliwave, Hughes Network Systems, Nokia and
Nortel Networks and its affiliates accounted for 29%, 21% and 26% of our
revenues in the six months ended June 30, 2000. On the same pro forma basis,
they accounted for 7%, 34% and 9% of our total revenues in the year ended
December 31, 1999.

SALES AND MARKETING

Our sales and marketing efforts are focused on establishing a global and
diversified customer base. We are currently focused on the cellular backhaul,
point-to-point and point-to-multipoint markets. We sell our products through our
direct sales efforts and a network of international independent representatives.
We have technical account managers to develop and expand the relationship with
each of our major customers.

Our marketing efforts are focused on identifying industry leaders in our
target markets. As our products are highly technical, sales efforts involve a
collaborative and iterative process with our customers to determine their
specific requirements and design an appropriate solution. Our engineers
participate in the product development and sales process from concept
identification and product selection to post-sale support. The typical sales
cycle, which includes prototyping, is between three months and twelve months.

As of June 30, 2000, we employed 10 sales and marketing personnel. We
intend to add to our domestic direct sales force and to build an international
direct sales force.

OPERATIONS

We use traditional and proprietary circuit technologies to manufacture
our RF modules, transceivers and outdoor units. We currently maintain circuit
assembly and test facilities in Diamond Springs and Sunnyvale, California. We
assemble our outdoor units at our Santa Clara, California facility. We use our
Diamond Springs facility for high volume manufacturing and our Sunnyvale and
Santa Clara facilities primarily for prototyping and low volume manufacturing.

We design many of the gallium arsenide devices that we use in our
products but we do not operate a facility to manufacture these devices. Instead,
we use third-party semiconductor fabrication facilities to manufacture the
gallium arsenide devices we design. Our use of third-party semiconductor
facilities gives us the flexibility to use the process technology that is best
suited for each application and eliminates the need for us to invest in and
maintain our own semiconductor fabrication facilities.

For our MCIC and MMIC products, we exclusively use planar assembly
techniques. This approach consists of beginning with a flat base plate onto
which we sequentially mount all of the various components and circuit elements
in an automated manner. Concurrent with our product development efforts, we
develop assembly processes to ensure that our designs can be produced in high
volume and at low cost. Our assembly processes are highly automated and are
designed to minimize individual tuning of bond wires.

Broadband wireless access products require extensive testing after
assembly to comply with stringent customer requirements. We utilize high speed,
custom designed, automated test sets that are capable of rapidly testing a
complete transceiver unit, and we have developed similar high speed methods for
outdoor units. Concurrent with the development of these test methods, we develop

49
<PAGE>

Web-based data analysis and reporting tools to facilitate communication of test
data to our customers.

Our high volume manufacturing facility is registered under ISO 9001, an
international certification standard of quality for design, development and
business practices. We maintain comprehensive quality systems at all of our
facilities to ensure compliance with customer specifications, configuration
control, documentation control and supplier quality conformance.

TRW RELATIONSHIP

In March 2000, we completed our merger with TRW Milliwave, which was then
a wholly-owned subsidiary of TRW. Through the merger, we acquired Milliwave's
manufacturing and product development facility in Diamond Springs, California.
We also entered into various agreements with TRW described below.

SUPPLY AGREEMENT. The supply agreement allows us to purchase specified
quantities of particular gallium arsenide devices from TRW through March 2003.
Under the agreement, we are required to purchase a minimum quantity of gallium
arsenide devices each year, and TRW is required to supply us with these devices
up to a certain annual maximum amount. This agreement does not limit our ability
to obtain gallium arsenide wafer processing services or devices from other
suppliers.

LICENSE AGREEMENT. TRW granted us royalty-free, fully-paid, worldwide
licenses to TRW intellectual property existing as of February 2000 that is
incorporated into specified products we supply to Nokia and Nortel Networks
under contracts we have with TRW. The intellectual property licensed to us by
TRW includes United States and foreign patent rights, copyrights, trademarks,
trade secrets, industrial rights and contract rights. In addition, we have been
granted a license to changes or improvements in this intellectual property that
is developed by TRW on or before February 28, 2001. Our license is for use in
products provided to commercial customers in non-satellite applications. This
license is exclusive as to all parties, including TRW, although TRW reserved the
right to use the licensed technology to perform under their agreements with
Nokia and Nortel Networks if TRW determines we are unable to do so.
Additionally, we have reciprocally agreed, for the initial year of our
agreement, to provide to TRW a royalty-free, non-exclusive right to our
improvements to the licensed intellectual property for use in fields of
application unrelated to our products.

SERVICES AGREEMENT. The services agreement provides access to technical
support related to the production of our products incorporating TRW-produced
devices, as well as access to TRW's RF design and process expertise for products
within the 15 to 65 GHz frequency range. TRW has also agreed to provide general
design assistance to us. The agreement expires in March 2002.

In addition, through September 30, 2000, TRW granted us an exclusive,
royalty-free, perpetual, irrevocable and worldwide license allowing us to use
TRW-owned intellectual property related to products incorporating TRW-produced
devices or to services provided under the agreement, as well as a non-exclusive,
royalty-free, perpetual, irrevocable and worldwide license to all other TRW
intellectual property to the extent necessary for the sale of those products and
services. These licenses only apply to products provided to commercial customers
in non-satellite applications. To the extent directly related to the products we
produce, the licenses are exclusive as to all persons including TRW, except that
TRW has reserved the right to fulfill existing contractual obligations with
Nokia and Nortel Networks if TRW determines that we are unable to do so. For
TRW-owned intellectual property developed after September 30, 2000, our license
is non-exclusive.

RELATIONSHIPS WITH NORTEL NETWORKS AND NOKIA. At the closing of the
merger, we entered into contracts with TRW pursuant to which we agreed to
fulfill TRW's contractual obligations with Nokia and Nortel Networks for the
supply of specified RF subsystems. Our agreements with TRW provide substantially
the same terms to us as embodied in the agreements between TRW and Nokia and

50
<PAGE>

TRW and Nortel Networks. One of TRW's agreements with Nokia terminates when the
obligations under the agreement have been satisfied and the other terminates in
July 2001. The agreement between TRW and Nortel Networks expires in October
2000. These present arrangements do not obligate either Nokia or Nortel Networks
to purchase any products from us. We are currently negotiating agreements with
each of Nokia and Nortel Networks for the direct supply of RF subsystems after
the expiration of their contracts with TRW. There can be no assurance that Nokia
or Nortel Networks will become or subsequently remain a significant customer of
ours in the future.

COMPETITION

Competition in the market for RF subsystems for broadband wireless access
systems is intense. In the markets for RF modules, transceivers and outdoor
units, we primarily compete with Celeritek, Infineon Technologies, MTI
Technology, Raytheon, REMEC, Signal Technologies, Telaxis Communications and
Thomson. In the market for antennas, we primarily compete with Andrew
Corporation, Electromagnetic Sciences, Nurad Technologies, Radio Waves and
REMEC.

We believe that the principal competitive factors in our industry are:

o technical leadership;

o the ability to migrate to low cost solutions;

o manufacturing capability and capacity;

o time-to-market in the design and manufacturing of products;

o price;

o product breadth;

o access to semiconductor materials and components; and

o customer support services.

PATENTS AND INTELLECTUAL PROPERTY RIGHTS

Our success will depend, in part, on our ability to protect our
intellectual property. We rely primarily on a combination of patent, copyright,
trademark and trade secret laws to protect our proprietary technologies and
processes. Nevertheless, such measures may not be adequate to safeguard the
proprietary technology underlying our products. As of June 30, 2000, we had 27
United States patents issued, 12 foreign patents issued, and more than 90 United
States and foreign patent applications pending. The pending applications include
two international applications filed under the Patent Cooperation Treaty that
provide the opportunity to file 18 additional foreign applications. Of the
pending patent applications, 13 have been allowed and are expected to result in
the issuance of patents to us. Our issued patents include those relating to
basic circuit and device designs, semiconductors, our proprietary "flip-chip"
design for MCIC circuit technology and antenna design and technology. In
addition, we jointly hold two patents with AT&T and pertaining to sectorized
communications systems and jointly hold one patent with Conductus relating to
satellite communications. Our issued patents expire between 2013 and 2018. Of
all our patents, we consider the two patents relating to our flip-chip circuit
technology to be the most valuable. With regard to our pending patent
applications, no patents may be issued as a result of these or any future
applications. If they are issued, any patent claims allowed may not be
sufficiently broad to protect our technology. In addition, any existing or
future patents may be challenged, invalidated or circumvented, and any right
granted thereunder may not provide meaningful protection to us. The

51
<PAGE>

failure of any patents to provide protection to our technology might make it
easier for our competitors to offer similar products and use similar
manufacturing techniques.

We generally enter into confidentiality and assignment of rights to
inventions agreements with our employees, and confidentiality and non-disclosure
agreements with our strategic partners, and generally control access to and
distribution of our documentation and other proprietary information. Despite
these precautions, it may be possible for a third party to copy or otherwise
obtain and use our products or technology without authorization, develop similar
technology independently or design around our patents. In addition, effective
patent, copyright, trademark and trade secret protection may be unavailable or
limited outside of the United States, Europe and Japan. We may not be able to
obtain any meaningful intellectual property protection in such countries and
territories. Additionally, we may, for a variety of reasons, decide not to file
for patent, copyright, or trademark protection outside of the United States.
Further, at our customers' request, we occasionally incorporate their
intellectual property into our designs, in which cases we have obligations with
respect to the non-use and non-disclosure of that intellectual property.
However, the steps taken by us to prevent misappropriation or infringement of
the intellectual property of our company or our customers may not be successful.
Moreover, litigation may be necessary in the future to enforce our intellectual
property rights, to protect our trade secrets or to determine the validity and
scope of proprietary rights of others, including our customers. Litigation of
this type could result in substantial costs and diversion of our resources.

FACILITIES

Our principal executive offices are located in Sunnyvale, California,
where we lease approximately 29,000 square feet, which encompasses our
headquarters and also provides space for research and design and manufacturing
functions. This lease expires January 2002. We also lease approximately 12,000
square feet in Santa Clara, California for manufacturing purposes. This lease
expires November 2000. We own two buildings consisting of approximately 46,000
square feet in Diamond Springs, California, which we use primarily for
manufacturing purposes. We believe that our existing facilities are adequate to
meet our current and near term future needs.

EMPLOYEES

As of June 30, 2000, we had 448 full-time employees, including 313 in
manufacturing, 97 in product and process engineering, 10 in sales and marketing
and in 28 in general and administrative. Our employees are not subject to any
collective bargaining agreement with us and we believe that our relations with
our employees are good.

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<PAGE>

MANAGEMENT

DIRECTORS, OFFICERS AND KEY EMPLOYEES

The following table contains information regarding our executive
officers, directors and other key employees, including their ages as of June 30,
2000:

<TABLE>
<CAPTION>
NAME AGE POSITION
------------------------------------------- -------- ------------------------------------------------------------
<S> <C> <C>
Edward A. Keible, Jr. (3)................. 56 Chief Executive Officer, President and Director
Donald J. Dodson, Jr...................... 53 Chief Operating Officer and Senior Vice President
Bruce M. Margetson........................ 55 Chief Financial Officer and Senior Vice President
Julianne M. Biagini ...................... 38 Vice President, Finance and Administration, and Corporate
Secretary
James G. Bybokas.......................... 57 Vice President, Sales and Marketing
John J. Mikulsky.......................... 55 Vice President, Product Development
Lionel Kirton............................. 63 Vice President, Manufacturing and Operations, Silicon
Valley
Douglas G. Lockie......................... 54 Executive Vice President and Founder of Endgate
Cliff Mohwinkel........................... 59 Vice President and Chief Technology Officer
John C. Rosenberg......................... 47 Executive Vice President and Founder of Milliwave Inc.
Michael Roush............................. 48 Vice President, Manufacturing and Operations, Diamond
Springs
Wes Bush (2)(3)........................... 39 Director
Timothy W. Hannemann (1).................. 58 Director
Esfandiar Lohrasbpour (1)................. 48 Director
Robert D. Pavey (2)(3).................... 58 Director
</TABLE>
--------------
(1) Member of the audit committee
(2) Member of the compensation committee
(3) Member of the executive committee

EDWARD A. KEIBLE, JR. has served as our President and Chief Executive
Officer and as a director since January 1994. From 1973 until 1993, Mr. Keible
held various positions at Raychem Corporation, culminating in the position of
Senior Vice President with specific oversight of Raychem's International and
Electronics Groups. Mr. Keible has been awarded three patents in the fields of
electronics and communications. Mr. Keible holds a B.A. in engineering sciences
and a B.E. and an M.E. in materials science from Dartmouth College and an M.B.A.
from Harvard Business School. Mr. Keible currently serves on the board of
directors of the American Electronics Association.

DONALD J. DODSON, JR. has served as our Chief Operating Officer and Senior
Vice President since March 2000. Mr. Dodson joined us in connection with our
merger with Milliwave. From September 1998 until April 2000, Mr. Dodson served
as a Vice President and the General Manager of Milliwave and as a Manager of
TRW's Telecommunications Programs. Prior to September 1998, Mr. Dodson held
various management positions with TRW, including as a Deputy Manager of the TRW
RF Products Center and Vice President of Engineering, Research and Development
in TRW's Automotive Electronics Group. Mr. Dodson holds a B.S. and an M.S. in
electrical engineering from Drexel University.

BRUCE M. MARGETSON has served as our Chief Financial Officer and Senior
Vice President since March 2000. Prior to joining us, Mr. Margetson was
Controller of the Wide Area Network Business Unit and Senior Manager, Corporate
Planning at Cisco Systems Inc., where he served from August 1996 until March
2000. From 1991 until 1996, Mr. Margetson held various positions at Silicon
Graphics, including as its European Finance Director. Prior to 1991, Mr.
Margetson held positions at

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<PAGE>

Network Equipment Technologies, Tekna, Raychem Corporation, Singer Company and
Price Waterhouse. Mr. Margetson holds a B.A. in economics and political science
from the University of British Columbia and an M.B.A. from Stanford University.

JULIANNE M. BIAGINI has served as our Vice President of Finance and
Administration and Corporate Secretary since April 1995. Ms. Biagini joined us
as our Director of Finance and Administration and Secretary in March 1994.
Previously, Ms. Biagini was the Manager of Accounting and Tax at Exponent, Inc.
(formerly Failure Analysis Associates), an engineering and scientific consulting
firm, from 1992 until 1994. Prior to 1992, Ms. Biagini worked at KPMG Peat
Marwick as a tax specialist. Ms. Biagini is a C.P.A. in California with a B.S.
in business administration from San Jose State University and an M.B.A. from
Santa Clara University.

JAMES G. BYBOKAS has served as our Vice President of Sales and Marketing
since March 1996. From 1991 until 1996 Mr. Bybokas served as the Director of
Marketing for the Communications Products Division of Litton Solid State. Mr.
Bybokas has also held positions as Vice President of Marketing and Product
Development at Superconductor Technologies, Marketing Manager at Avantek, and
Sales Manager at Varian. Mr. Bybokas holds a B.S. in electrical engineering from
the University of Illinois and an M.S. in electrical engineering from New York
University.

JOHN J. MIKULSKY has served as our Vice President of Product Development
since May 1996. From 1993 until 1996, Mr. Mikulsky worked as a Technology
Manager for Balazs Analytical Laboratory, a provider of analytical services to
the semiconductor and disk drive industries. Prior to 1993, Mr. Mikulsky worked
at Raychem Corporation most recently as a Division Manager for the Electronic
Systems Division. Mr. Mikulsky holds a B.S. in electrical engineering from
Marquette University, an M.S. in electrical engineering from Stanford University
and an M.S. in Management from the Sloan School at M.I.T.

LIONEL KIRTON has served as our Vice President of Manufacturing and
Operations at our Sunnyvale location since January 2000. Prior to joining
Endwave, from 1991 until 1998, Mr. Kirton worked at Hewlett-Packard as the
Worldwide Manufacturing Manager for the Communications Components Division.
Prior to 1991, Mr. Kirton had served as a Senior Vice President of Avantek, a
Division Manager at Advanced Microdevices and Vice President of Signetics
Corporation. Mr. Kirton holds a B.S. in physics from University of Nottingham,
England.

DOUGLAS G. LOCKIE has served as an Executive Vice President since 1994
and founded Endgate in 1991. From inception until March 2000 he also served as a
director. From 1984 until 1991, Mr. Lockie worked for Pacific Monolithics, a
company that he co-founded, as the Vice President of Marketing and Sales. Mr.
Lockie was previously employed by the Watkins Johnson Company as a microwave
applications engineer. Mr. Lockie is the co-author of seven patents in the
fields of electronics and communications. Mr. Lockie holds a B.S. in electrical
engineering from Montana State University.

CLIFF MOHWINKEL has served as our Chief Technology Officer since
inception and is a Vice President and a co-founder of Endgate. From 1965 until
1991, Dr. Mohwinkel most recently served as a Senior Technical Manager at
Pacific Monolithics, Litton, Varian, Fairchild, and Blonder Tongue Labs. Dr.
Mohwinkel has been awarded 24 patents in the field of microelectronics. Dr.
Mohwinkel holds a B.S. and an M.S. in electrical engineering from Newark College
of Engineering and a Ph.D. in electrical engineering from the Polytechnic
Institute of New York.

JOHN C. ROSENBERG has served as an Executive Vice President since March
2000. Mr. Rosenberg joined us in connection with our merger with Milliwave. Mr.
Rosenberg founded Milliwave in 1992 and served as its President until Fall 1998,
and as a Vice President of Milliwave from Fall 1998 until its merger with
Endgate. From 1990 to 1992, Mr. Rosenberg was Division Manager of the Active
Products Division at Sierra Microwave. Previously, Mr. Rosenberg was employed as
the Manager for Engineering and Manufacturing Millimeter Wave Products Division
of

54
<PAGE>

Avantek. Mr. Rosenberg has been awarded a patent in the field of
microelectronics. Mr. Rosenberg holds a B.S. in electrical engineering from San
Jose State University.

MICHAEL ROUSH has served as our Vice President of Manufacturing and
Operations at our Diamond Springs location since March 2000. Mr. Roush joined us
in connection with our merger with Milliwave. Mr. Roush worked for Milliwave
from January 1998 to March 2000, first as Director of Operations and then as
Vice President of Operations. Prior to joining Milliwave, Mr. Roush worked for
TRW's Automotive Electronics Group as a Director of Engineering Operations and
as a manager in TRW's RF Products Group. Mr. Roush holds two patents in the
field of electronics manufacturing. Mr. Roush has a B.S. in electrical
engineering from the University of Illinois.

WES BUSH has served as a director of Endwave since the consummation of
our merger with Milliwave in March 2000. Mr. Bush has served as Vice President
and Group Deputy General Manager for TRW Ventures, a division of TRW's Space and
Electronics Group since March 2000. Mr. Bush has served in various management
capacities for TRW since 1987, including within TRW's Space and Electronics
Group. Mr. Bush holds a B.S. and an M.S. in electrical engineering from the
Massachusetts Institute of Technology and is a graduate of UCLA's Executive
Management Program. Mr. Bush serves as a member of the board of directors of
Astrolink.

TIMOTHY W. HANNEMANN has served as a director of Endwave since the
consummation of our merger with Milliwave in March 2000. Mr. Hannemann has
served as an Executive Vice President and General Manager for TRW's Space and
Electronics Group since January 1993. Mr. Hannemann has served in various
management capacities within TRW since 1969, including positions within TRW's
Space and Defense Systems Sector and Electronic Systems Group. Mr. Hannemann
holds a B.S. and an M.S. in electrical engineering from the Illinois Institute
of Technology. Mr. Hannemann serves as a member of the board of directors of
Astrolink and serves on the Aerospace Industries Association Board of Governors.

ESFANDIAR LOHRASBPOUR has served as a director of Endwave since April
1999. Dr. Lohrasbpour is a Managing Director with INVESCO Private Capital, a
money management firm he joined in 1998. Dr. Lohrasbpour focuses on technology
investments primarily with a communication orientation. Prior to joining
INVESCO, Dr. Lohrasbpour worked for AT&T from 1982 until 1998. Dr. Lohrasbpour
holds a B.A. in mathematics from the Berea College in Berea, Kentucky, an M.S.
in operations research from the University of North Carolina at Chapel Hill and
a Ph.D. in operations research from the UCLA School of Engineering.

ROBERT D. PAVEY has served as a director of Endwave since May 1994. Mr.
Pavey has served as a General Partner of Morgenthaler Ventures since January
1970. Mr. Pavey holds a B.A. in physics from The College of William and Mary, an
M.S. in metallurgical engineering from Columbia University, and an M.B.A. from
Harvard Business School. Mr. Pavey serves as a member of the board of directors
of Commonfund, FiberStreet, LightChip, Lightwave Microsystems, New Focus and
Think & Do Software.

There are no family relationships between any of the directors and
officers of Endwave.

BOARD OF DIRECTORS

Endwave has five authorized directors. In accordance with the terms of
our amended and restated certificate of incorporation and amended and restated
bylaws, each of which will become effective upon the completion of this
offering, the board of directors will be divided into three classes, Class I,
Class II and Class III, with each class serving staggered three-year terms. Upon
the completion of this offering, the members of classes will be divided as
follows:

o Class I: Messrs. Bush and Lohrasbpour

o Class II: Messrs. Hannemann and Pavey

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<PAGE>

o Class III: Mr. Keible

The Class I directors will stand for re-election or election at the 2001
annual meeting of stockholders. The Class II directors will stand for
re-election or election at the 2002 annual meeting of stockholders. The Class
III directors will stand for re-election or election at the 2003 annual meeting
of stockholders. At each annual meeting of stockholders after the initial
classification, the successors to directors whose terms will then expire will be
elected to serve from the time of election and qualification until the third
annual meeting following the election or special meeting held in lieu thereof.

The amended and restated certificate of incorporation provides that the
authorized number of directors may be changed only by resolution of the board of
directors. Any additional directorships resulting from an increase in the number
of directors will be distributed between the three classes so that, as nearly as
possible, each class will consist of one third of the directors. This
classification of the board of directors may have the effect of delaying or
preventing changes in the control or management of Endwave.

Our directors may be removed only for cause by the affirmative vote of
the holders of a majority of our voting stock.

BOARD COMMITTEES

Our board of directors has a compensation committee, an audit committee
and an executive committee. The compensation committee, which consists of
Messrs. Bush and Pavey, acts on behalf of the board to grant options, makes
recommendations to the board concerning salaries and incentive compensation for
our officers and employees and provides guidance on overall compensation levels
for Endwave. The audit committee, which consists of Messrs. Hannemann and
Lohrasbpour, makes recommendations to the board of directors regarding the
selection of independent auditors, reviews the results and scope of the audit
and other services provided by our independent auditors, and reviews and
evaluates our audit and control functions. The audit committee will include an
additional independent director that we will name to our board of directors
prior to the completion of this offering. The executive committee, which
consists of Messrs. Bush, Pavey and Keible, acts with the full authority of the
board within the limits of applicable law and as set forth in our certificate of
incorporation and bylaws. Members of these committees will serve until their
successors are appointed.

DIRECTOR COMPENSATION

The members of the board of directors do not currently receive cash
compensation for their services as directors, although they are reimbursed for
travel expenses in connection with attendance at board and committee meetings.
Non-employee directors are eligible to participate in our 2000 Non-Employee
Director Plan, which will be effective upon the consummation of this offering.
Pursuant to the plan, all non-employee directors will automatically be granted
an option to purchase 40,000 shares of common stock upon their election to the
board of directors. Our incumbent directors will be granted their initial option
grants upon consummation of this offering. Our non-employee directors will also
be granted an option to purchase an additional 10,000 shares of common stock
each year following the date of our annual stockholder's meeting, provided that
if any non-employee director has not served in that capacity for the entire
period since the preceding annual stockholder's meeting, then the number of
shares subject to the annual grant will be reduced, pro rata, for each full
quarter the person did not serve during the previous period. All options under
this plan expire after ten years and have an exercise price equal to the fair
market value on the date of grant. These options vest over four years at the
rate of 1/48 of the total grant per month. Our directors are also eligible to
participate in our 2000 Equity Incentive Plan and our employee directors are
eligible to participate in our 2000 Employee Stock Purchase Plan.

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<PAGE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Our compensation committee consists of Messrs. Bush and Pavey. Neither of
these individuals is or has been an officer or employee of Endwave. No member of
the compensation committee of Endwave serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Endwave board of directors.

EMPLOYMENT ARRANGEMENTS

In March 2000 in connection with our merger with Milliwave, our board of
directors approved a plan providing for the acceleration of vesting, under
certain circumstances, of a percentage of the stock options granted to our
officers under our equity incentive plans prorated based on years of employment
with us. Under the plan, an unvested portion of each officer's stock options
under our equity incentive plans becomes vested and exercisable if Endwave is
acquired pursuant to a change in control, or the officer is terminated without
cause. In addition, severance benefits will be paid to each officer if
terminated without cause. For more information on our Officer Retention Plan,
see also the section titled "Employee Benefit Plans-Officer Retention Plan."

EXECUTIVE COMPENSATION

The following table sets forth all compensation awarded to, earned by, or
paid to our Chief Executive Officer and the other most highly compensated
executive officers whose annual salaries and bonuses together exceeded $100,000
for the year ended December 31, 1999. These individuals are referred to as the
named executive officers in this prospectus.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION AWARDS
----------------------------------------------- ----------------------
OTHER ANNUAL NUMBER OF SHARES
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(2) UNDERLYING OPTIONS
------------------------------ ------------ ------------ ------------------- ----------------------
<S> <C> <C> <C> <C>
Edward A. Keible, Jr..................... $259,881 $60,000 $671 150,000
President, Chief Executive Officer
and Chief Financial Officer (3)
John J. Mikulsky......................... 168,605 35,000 235 62,500
Vice President, Product Development
and Operations (3)
James G. Bybokas......................... 146,652 24,000 439 50,000
Vice President, Sales and Marketing
Julianne M. Biagini...................... 113,500 22,000 69 50,000
Vice President, Finance and
Administration, and Corporate
Secretary
</TABLE>
--------------
(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 executive officer for the fiscal year.
(2) Represents insurance premiums paid by Endwave with respect to group life
insurance for the benefit of the named executive officers.
(3) In March 2000, we hired Bruce M. Margetson as our Chief Financial Officer
and Donald J. Dodson, Jr. as our Chief Operating Officer.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding options granted to
each of the named executive officers during the year ended December 31, 1999.
The information regarding stock

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<PAGE>

options granted to named executive officers as a percentage of total options
granted to employees in 1999 is based on options to purchase a total of 751,625
shares that were granted to employees, consultants and directors in 1999, all
pursuant to our 1992 Stock Option Plan. No stock appreciation or stock purchase
rights were granted during 1999.

Options were granted at an exercise price equal to the fair market value
of our common stock, as determined by the board of directors on the date of
grant. Options typically vest ratably on a quarterly basis over a four-year
period.

The potential realizable values set forth in the table below are computed
by multiplying the number of shares of common stock subject to a given option by
the initial public offering price of $_______ per share, assuming that the
aggregate stock value derived from that calculation compounds at the annual 5%
or 10% rate shown in the table for the entire ten-year term of the option and
subtracting from that result the aggregate option exercise price. The 5% and 10%
assumed annual rates of stock appreciation are mandated by the rules of the SEC
and do not reflect our estimate or projection of future stock price growth.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------ POTENTIAL REALIZABLE
NUMBER OF PERCENTAGE VALUE AT ASSUMED ANNUAL
SECURITIES OF TOTAL EXERCISE RATES OF STOCK PRICE
UNDERLYING OPTIONS PRICE APPRECIATION FOR OPTION TERM
OPTIONS GRANTED IN PER EXPIRATION ---------------------------
NAME GRANTED FISCAL 1999 SHARE DATE 5% 10%
------- ----------- ------------ --------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Edward A. Keible, Jr............. 150,000 20.0% $1.20 7/28/09
John J. Mikulsky................. 62,500 8.3 1.20 7/28/09
James G. Bybokas................. 50,000 6.7 1.20 7/28/09
Julianne M. Biagini.............. 50,000 6.7 1.20 7/28/09

</TABLE>

AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES

The following table sets forth for each of the named executive officers
the shares acquired and the value realized on each exercise of stock options
during the year ended December 31, 1999 and number and value of securities
underlying unexercised options held by the named executive officers at December
31, 1999. Also reported are values for "in-the-money" options that represent the
positive spread between the respective exercise prices of outstanding stock
options and the estimated initial public offering price of $ ______, per share.

NUMBER NUMBER OF SHARES
OF UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 1999(1) DECEMBER 31, 1999(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------- ---------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Edward A. Keible, Jr........... -- -- 321,750 -- $ $
John J. Mikulsky............... -- -- 152,500 --
James G. Bybokas............... -- -- 111,250 --
Julianne M. Biagini............ -- -- 92,937 --

</TABLE>
--------------
(1) Some of the shares are immediately exercisable; however, to the extent
shares are purchased prior to their vesting, these shares are subject to
repurchase by Endwave at the original exercise price paid per share upon
the optionee's cessation of service prior to vesting. The shares listed
as exercisable are those shares which are unexercised for which Endwave
no longer has a right of repurchase if the option is exercised by the
holder; similarly, the shares listed as unexercisable are those shares
over which Endwave has a right of repurchase if the option is exercised
by the holder.

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<PAGE>

EMPLOYEE BENEFIT PLANS

1992 STOCK OPTION PLAN

In September 1992 our board of directors adopted, and in February 1993
our stockholders approved, our 1992 Stock Option Plan. The 1992 option plan was
terminated in March 2000. No new options can be granted under the plan; however,
all stock options granted prior to the termination of the 1992 option plan
remain valid and exercisable options and governed by the terms of the plan,
subject to vesting. The 1992 option plan provided for the grant of stock awards
to eligible persons, consisting of:

o incentive stock options, as defined under the Internal Revenue Code
of 1986, as amended, granted solely to employees; and

o nonstatutory stock options, granted to employees, non-employee
directors and consultants.

PLAN ADMINISTRATION

The 1992 option plan was administered by our board of directors. Subject
to the terms of the plan, the board of directors determined recipients, the
numbers and types of stock options to be granted and the terms and conditions of
the stock awards, including the period of their exercisability and vesting and
the form of consideration payable upon the exercise of each option. Subject to
the plan's limitations, the board of directors also determined the exercise
price of options granted.

OPTIONS

Stock options were granted pursuant to incentive stock options or
nonstatutory stock options. Incentive stock options were granted at an exercise
price not less than 100% of the fair market value of the common stock on the
date of grant. Nonstatutory stock options were granted at an exercise price of
not less than 85% of the fair market value of the common stock on the date of
grant. Options granted under the 1992 option plan typically vest ratably on a
quarterly basis over a four-year period.

The term of incentive stock options granted under the 1992 option plan
may not exceed 10 years. Unless the terms of an optionee's stock option
agreement provide for earlier termination, in the event an optionee's service
relationship with us, or any affiliate or ours, ceases due to disability, the
optionee, or a beneficiary of the optionee, may exercise any vested options up
to 12 months after the date such service relationship ends. If an optionee's
relationship with us, or any affiliate of ours, ceases for any reason other than
disability or death, absent a provision for earlier termination in the stock
option agreement, the optionee may exercise any vested options up to three
months from cessation of service. However, in no circumstances may an option be
exercised after the expiration of its term.

Acceptable consideration for the purchase of shares of common stock upon
exercise of an option granted under the 1992 option plan is determined by our
board of directors and may include cash, common stock previously owned by the
optionee, a deferred payment arrangement and other legal consideration as
approved by the board of directors.

TRANSFERABILITY OF OPTIONS

An optionee who holds an incentive stock option may not transfer a stock
option other than by will or intestate laws of descent and distribution upon
death. An optionee who holds a nonstatutory stock option may not transfer a
stock option other than by will or intestate laws of descent and distribution
upon death or pursuant to a qualified domestic relations order.

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<PAGE>

TAX LIMITATIONS ON STOCK OPTION GRANTS

Under tax laws in effect during the active life of our 1992 option plan,
only employees were eligible for the grant of incentive stock options. Only the
first $100,000 worth of stock options exercisable for the first time in one
calendar year can be treated as an incentive stock option. For this purpose, the
value of a stock option grant is the fair market value of the underlying stock
at the date of grant. No employee was eligible for the grant of an incentive
stock option if, at the time of the grant, such employee was the owner of or was
deemed to own stock possessing more than 10% of the total combined voting power
of Endwave or any affiliate unless the following conditions were satisfied:

o the option exercise price was at least 110% of the fair market value
of the stock subject to the option on the date of grant; and

o the term of any incentive stock option award did not exceed five
years from the date of grant.

CHANGES IN CONTROL

In the event of certain changes in control of Endwave, the surviving
entity may elect to assume, continue or substitute all options granted under the
1992 option plan. If the surviving entity elects not to assume, continue or
substitute for such options, such options will terminate if not exercised before
the change in control. In the event of dissolution or liquidation of Endwave,
options granted under the 1992 option plan will terminate if not exercised prior
to the dissolution or liquidation.

OPTIONS OUTSTANDING

As of June 30, 2000, there were 1,467,138 shares of our common stock
subject to options outstanding under the 1992 option plan.

2000 EQUITY INCENTIVE PLAN

In March 2000, our board of directors adopted and the stockholders
approved the 2000 Equity Incentive Plan. The 2000 incentive plan will expire in
March 2010 unless it is terminated earlier by the board of directors. The 2000
incentive plan provides for the grant of stock awards to eligible persons,
consisting of:

o incentive stock options, as defined under the Internal Revenue Code
of 1986, as amended, which may be granted solely to employees; and

o nonstatutory stock options, restricted stock purchase awards, and
stock bonuses which may be granted to employees, non-employee
directors and consultants.

PLAN ADMINISTRATION

The 2000 incentive plan is administered by our board of directors;
however administration of the plan may be delegated to a committee designated by
the board. Subject to the terms of the plan, the board of directors determines
recipients, the numbers and types of stock awards to be granted and the terms
and conditions of the stock awards including the period of their exercisability
and vesting. Subject to limitations set forth in the plan and described below,
the board of directors also determines the exercise price of options granted and
the terms of any other stock awards granted under the plan.

OPTIONS

Stock options are granted pursuant to stock option agreements. The
exercise price for an incentive stock option cannot be less than 100% of the
fair market value of the common stock on

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<PAGE>

the date of grant. The exercise price for a nonstatutory stock option cannot be
less than 85% of the fair market value of the common stock on the date of grant.
Options granted under the 2000 incentive plan vest at the rate specified in a
grantee's option grant notice and option agreement.

The term of incentive stock options granted under the 2000 incentive plan
may not exceed 10 years. Unless the terms of an optionee's stock option
agreement provide for earlier termination, in the event an optionee's service
relationship with us, or any affiliate of ours, ceases due to disability, the
optionee may exercise any vested options up to 12 months after the date such
service relationship ends. In the case of the optionee's death, absent a
provision stating otherwise in the stock option agreement, a beneficiary of the
optionee may exercise any vested options up to 18 months after the date the
service relationship ends. If an optionee's relationship with us, or any
affiliate of ours, ceases for any reason other than disability or death, absent
a provision for earlier termination in the stock option agreement, the optionee
may exercise any vested options up to three months from cessation of service.
However, in no circumstances may an option be exercised after the expiration of
its term.

Acceptable consideration for the purchase of common stock issued under
the 2000 incentive plan is determined by the board of directors and may include
cash, common stock previously owned by the optionee, a deferred payment
arrangement and other legal consideration approved by the board of directors.

TRANSFERABILITY OF OPTIONS

An optionee may not transfer a stock option other than by will or
intestate laws of descent and distribution upon death unless the optionee holds
a nonstatutory stock option that provides otherwise. However, an optionee may
designate a beneficiary who may exercise the option following the optionee's
death.

TAX LIMITATIONS ON STOCK OPTION GRANTS

Under current tax laws, incentive stock options may be granted only to
our employees. Only the first $100,000 worth of stock options exercisable for
the first time in one calendar year can be treated as an incentive stock option.
For this purpose, the value of the stock option grant is the fair market value
of the underlying stock at the date of grant. No incentive stock option may be
granted to any person who, at the time of the grant, owns or is deemed to own
stock possessing more than 10% of the total combined voting power of Endwave or
any affiliate unless the following conditions are satisfied:

o the option exercise price must be at least 110% of the fair market
value of the stock subject to the option on the date of grant; and

o the term of any incentive stock option award must not exceed five
years from the date of grant.

SECTION 162(M)

Section 162(m) of the Internal Revenue Code of 1986 denies an income tax
deduction to publicly held corporations for certain compensation paid to
specified employees in a taxable year to the extent that the compensation
exceeds $1 million, unless the compensation constitutes "performance-based
compensation." In order to ensure that option grants under the 2000 incentive
plan constitute "performance-based compensation," no person may be granted
options under the 2000 incentive plan covering more than 750,000 shares of
common stock in any calendar year. Under its general authority to grant options,
the board of directors has the implicit authority to reprice outstanding options
or to offer optionees the opportunity to replace outstanding options with new
options for the same or a different number of shares. In such case, both the
original and new options will count toward the Section 162(m) limitation.

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<PAGE>

STOCK BONUS AND RESTRICTED STOCK AWARDS

Stock bonus awards may be granted to eligible persons in consideration
for past services rendered. Shares of common stock granted under a stock bonus
agreement may be subject to a vesting schedule, with a right of repurchase
reserved to Endwave in the event a grantee's employment terminates prior to
vesting. The purchase price for each restricted stock award granted must be at
least 85% of the fair market value of the stock on the date of the award or at
the time the purchase is consummated. Rights to acquire shares under a stock
bonus or restricted stock bonus agreement are transferable only upon the terms
and conditions set forth in the stock bonus or restricted stock agreement, so
long as the shares awarded to a grantee are subject to the terms of the
applicable agreement.

CHANGES IN CONTROL

In the event of certain changes in control, the surviving entity may
elect to assume, continue or substitute all outstanding stock awards under the
2000 incentive plan. If the surviving entity elects not to assume, continue or
substitute for such awards, the vesting provisions of outstanding stock awards
held by persons whose service relationship with us has not terminated at the
time of the change in control will be accelerated in full. These stock awards
will be terminated upon the change in control if not previously exercised.

AUTHORIZED SHARES

There are 6,500,000 shares reserved under the 2000 incentive plan. As of
each anniversary of the listing date for trading of our common stock beginning
in 2001 and continuing until the fifth anniversary of the listing date in 2005,
the number of shares of common stock authorized for issuance under the 2000
incentive plan will be increased by the lesser of: (1) 6% of the number of
shares of common stock outstanding on that date, (2) 3,000,000 shares or (3) a
lesser number of shares as determined by the board of directors.

Shares subject to stock options granted under the 2000 incentive plan
that have expired or otherwise terminated without having been exercised in full
will again become available for the grant of awards under the 2000 incentive
plan. Likewise, shares of restricted stock awarded under this plan that have not
become fully vested will again become available for the grant of awards under
the 2000 incentive plan. Shares issued under the 2000 incentive plan may be
previously unissued shares or reacquired shares bought on the market or
otherwise.

OPTIONS OUTSTANDING

As of June 30, 2000, there were 3,019,000 shares of our common stock
subject to outstanding options under the 2000 incentive plan.

2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

In July 2000, our board of directors adopted, subject to stockholder
approval, the 2000 Non-Employee Directors' Stock Option Plan which provides for
the automatic grant of nonstatutory stock options to purchase shares of common
stock to our non-employee directors. The aggregate number of shares of common
stock that may be issued pursuant to these options under the plan is 600,000
shares. No options have been granted under the plan. The plan will be effective
upon the effectiveness of this offering.

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<PAGE>

ADMINISTRATION AND TERMS

Our board of directors administers the plan. Options granted to
non-employee directors are generally subject to the following terms:

o the exercise price of options granted will be equal to the fair
market value of the common stock on the date of grant;

o no option granted may be exercised after the expiration of 10 years
from the date it was granted;

o options granted are not transferable other than by will or by the
intestate laws of descent and distribution upon death and are
exercisable during the life of the optionee only by the optionee;

o an optionee may designate a beneficiary who may exercise the option
following the optionee's death; and

o an optionee whose service relationship with Endwave or any affiliate,
whether as a non-employee director of Endwave or subsequently as an
employee, director or consultant of either Endwave or an affiliate,
ceases for any reason may exercise vested options for the term
provided in the option agreement, which is generally 12 months, or 18
months in the event of the optionee's death. However, in no
circumstances may an option be exercised after the expiration of its
term.

AUTOMATIC GRANTS

Upon the completion of this offering, each non-employee director that has
not previously received Endwave stock options will automatically be granted an
option to purchase 40,000 shares of common stock. Any individual who becomes a
non-employee director after this offering will automatically receive this
initial grant upon being elected to the board of directors. Each year, on the
day after our annual stockholders' meeting, commencing in 2001, any person who
is then a non-employee director will automatically be granted an option to
purchase 10,000 shares of common stock, provided that if any non-employee
director has not served in that capacity for the entire period since the
preceding annual stockholders' meeting, then the number of shares subject to the
annual grant shall be reduced, pro rata, for each full quarter the person did
not serve during the previous period. Initial grants and annual grants under the
plan provide for monthly vesting of one forty-eighth of the shares subject to
the option each month following the date of grant over a four year period.

2000 EMPLOYEE STOCK PURCHASE PLAN

In July 2000, the board of directors adopted and the stockholders
approved the 2000 Employee Stock Purchase Plan, authorizing the issuance of
common stock pursuant to purchase rights granted to our employees or to
employees of any of our affiliates. The purchase plan is intended to qualify as
an employee stock purchase plan within the meaning of Section 423 of the Code.
The purchase plan provides a means by which employees may purchase our common
stock through payroll deductions. As of the date hereof, no shares of common
stock have been purchased under the purchase plan. The plan will be effective
upon the consummation of this offering.

ADMINISTRATION

The purchase plan is administered by our board of directors which may
delegate authority to administer the purchase plan to a committee. Subject to
the terms of the plan, the board of directors or its authorized committee
determines when and how rights to purchase shares will be granted and the
provisions of each offering of rights. Under the plan, we may specify offerings
with a duration of not more than 27 months, and may specify shorter purchase
periods within each

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<PAGE>

offering. The board of directors has determined that the first offering will
begin on the effective date of this offering and be 24 months in duration, with
purchases occurring every six months. Unless otherwise determined by the board
of directors, common stock is purchased for accounts of employees participating
in the purchase plan at a price per share equal to the lower of:

o 85% of the fair market value of a share of our common stock on the
date of commencement of participation in the offering; or

o 85% of the fair market value of a share of our common stock on the
date of purchase.

ELIGIBILITY

The purchase plan is implemented by offerings of rights to eligible
employees. Generally, all regular employees, including executive officers, who
work at least 20 hours per week and are customarily employed by Endwave or by an
affiliate of Endwave for at least five months per calendar year may participate
in the purchase plan and may authorize payroll deductions of up to 15% of their
earnings for the purchase of stock under the purchase plan. Eligible employees
may be granted rights only if the rights, together with any other rights granted
under employee stock purchase plans, do not permit such employee's rights to
purchase our stock to accrue at a rate which exceeds $25,000 of the fair market
value of such stock for each calendar year in which such rights are outstanding.
No employee shall be eligible for the grant of any rights under the purchase
plan if immediately after such rights are granted, such employee has voting
power over 5% or more of our outstanding capital stock measured by vote or
value.

CHANGES IN CONTROL

In the event of a change in control as described in the plan, the
surviving entity may assume or substitute for rights outstanding under the
purchase plan. If the surviving entity does not assume or substitute for
outstanding rights, then a participant's accumulated payroll deductions shall be
used to purchase shares immediately prior to the change in control, and their
outstanding rights thereafter shall be terminated.

AUTHORIZED SHARES

The purchase plan authorizes the issuance of 400,000 shares of common
stock under the purchase plan which amount is increased each anniversary of the
listing date for trading of our common stock beginning 2001 and continuing
through and including the tenth anniversary of the listing date in 2010, by the
lesser of (1) 350,000 shares (2)1.5% of the number of shares of common stock
outstanding on that date or (3) a lesser number of shares as determined by the
board of directors.

401(K) PLAN

In 1995, we adopted an employee savings plan covering our employees.
Pursuant to the 401(k) plan, eligible employees may elect to reduce their
current compensation by up to the lesser of 20% of their annual compensation or
the statutorily prescribed annual limit and have the amount of such reduction
contributed to the 401(k) plan. In addition, eligible employees may make
rollover contributions to the 401(k) plan from a tax-qualified retirement plan.
The 401(k) plan is intended to qualify under Section 401 of the Code, so that
contributions by employees or Endwave to the 401(k) plan, and income earned on
the 401(k) plan contributions, are not taxable to employees until withdrawn from
the 401(k) plan, and so that contributions by Endwave, if any, will be
deductible by Endwave when made. Effective April 1, 2000, Endwave provides a
matching contribution of $.50 per $1.00 up to the first 6% per year.

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OFFICER RETENTION PLAN

In March 2000, our board of directors adopted our Officer Retention Plan.
The retention plan provides for the payment of severance benefits and the
acceleration of options granted to our officers upon specified events, as
described below.

INVOLUNTARY TERMINATION WITHOUT MISCONDUCT AND PRIOR TO A CHANGE
IN CONTROL

The retention plan provides that in the event an officer is terminated
for reasons other than misconduct, as defined in the plan, and prior to a change
in control, the officer will be entitled to salary and continuation of benefits
based on his length of service and position with Endwave as follows:

o our chief executive officer will receive 12 months' salary or 2
months' salary for each completed year of service, whichever is
greater;

o our chief operating officer and chief financial officer each will
receive 9 months' salary or 1.5 months' salary for each completed
year of service, whichever is greater; and

o each executive vice president and vice president will receive 6
months' salary or 1 month's salary for each completed year of
service, whichever is greater.

Additionally, each officer will receive a prorated bonus for the year in
which terminated. All options awarded prior to our merger with Milliwave, if
any, will immediately vest in full, and all options awarded following our merger
with Milliwave will vest as though the officer had remained employed for twice
the severance period described above.

CHANGE IN CONTROL

Upon a change in control, as defined in the plan, any options awarded to
officers prior to our merger with Milliwave will immediately vest in full.

INVOLUNTARY TERMINATION WITHOUT MISCONDUCT WITHIN SIX MONTHS FOLLOWING A
CHANGE IN CONTROL

The retention plan provides that in the event an officer is terminated for
reasons other than misconduct and within six months of a change in control of
Endwave, the officer will receive salary, continuation of benefits and option
vesting for double the length of time the officer would have received had the
officer been involuntarily terminated with no change in control, as described
above.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Delaware corporate law authorizes a court to award, or a corporation's
board of directors to grant indemnity to directors and officers in terms
sufficiently broad to permit such indemnification under certain circumstances
for liabilities, including reimbursement for expenses incurred, arising under
the Securities Act.

As permitted by Delaware law, our certificate of incorporation, as in
effect upon the closing of this offering, includes a provision that eliminates
the personal liability of its directors for monetary damages for breach of
fiduciary duty as a director, except for liability:

o for any breach of the director's duty of loyalty to us or our
stockholders;

o for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

o under Section 174 of the Delaware law regarding unlawful payments of
dividends and unlawful stock repurchases or redemptions; or

o for any transaction from which the director derived an improper
personal benefit.

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Our certificate of incorporation and/or our bylaws as such will be in
effect upon the closing of this offering, provide that:

o we are required to indemnify our directors and officers to the
fullest extent permitted by Delaware law, so long as such person
acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of Endwave, and with
respect to any criminal action or proceeding, had no reasonable cause
to believe the person's conduct was unlawful.

o we are permitted to indemnify our other employees to the extent that
we indemnify our officers and directors, unless otherwise required by
law, our certificate of incorporation, our bylaws or agreements;

o we are required to advance expenses, as incurred, to our directors
and officers in connection with a legal proceeding to the fullest
extent permitted by Delaware law, subject to certain very limited
exceptions; and

o the rights conferred in our bylaws are not exclusive.

Prior to the effective time of this offering, we intend to enter into
indemnity agreements with each of our current directors and officers to give
such directors and officers additional contractual assurances regarding the
scope of the indemnification set forth in our certificate of incorporation and
our bylaws and to provide additional procedural protections. Upon completion of
this offering, we will also maintain directors and officers liability insurance.
At present, we are not aware of any pending litigation or proceeding involving
any of our directors, officers or employees regarding which indemnification is
sought, nor are we aware of any threatened litigation that may result in claims
for indemnification.

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CERTAIN TRANSACTIONS

The following is a description of transactions in the last three years to
which we have been a party in which the amount involved in the transaction
exceeds $60,000 and in which any director, executive officer or holder of more
than 5% of our capital stock had or will have direct or indirect material
interest other than compensation arrangements that are otherwise described under
Management.

RECAPITLIZATION

In March 2000, we underwent a recapitalization at the time of our merger
with Milliwave in which we exchanged all outstanding shares of our Series A
through Series G preferred stock for shares of our Series E-1 through Series E-7
preferred stock resulting in the issuance of the following: 426,250 shares of
Series E-1 preferred stock; 866,398shares of Series E-2 preferred stock;
991,423shares of Series E-3 preferred stock; 1,246,464shares of Series E-4
preferred stock; 2,481,671shares of Series E-5 preferred stock; 3,456,391
shares of Series E-6 preferred stock; 2,449,639shares of Series E-7 preferred
stock; and 13,963,063shares of Series T-1 preferred stock, all of which shares
of Series T-1 preferred stock were issued to TRW in connection with our merger
with Milliwave.

CONSTITUTION OF BOARD OF DIRECTORS AND REGISTRATION RIGHTS

In connection with our merger with Milliwave, effective as of March31,
2000, we amended our certificate of incorporation and entered into an Investors
Rights Agreement to provide holders of our Series E-1 through E-7 preferred
stock with the right to designate two members of our board of directors and our
Series T-1 preferred stock (held solely by TRW) with the right to designate two
members of our board of directors. This right terminates upon the closing of
this offering. Esfandiar Lohrasbpour and Robert Pavey are the current Board
Members designated by the Series E-1 through E-7 preferred stock, and Wes Bush
and Timothy Hannemann are the current Board Members designated by TRW, as the
sole holder of our Series T-1 preferred stock.

Under our Investors Rights Agreement, we have granted to preferred stock
purchasers registration rights as to the shares of common stock acquired by them
upon conversion of their preferred stock shares or upon exercise of warrants
held by them, as the case may be. For more information regarding this agreement,
see Description of Capital Stock-Registration Rights.

ISSUANCES OF NOTES AND WARRANTS AND SALES OF STOCK

Between October 1997 and March 2000, we sold an aggregate of 8,387,701
shares of our Series E-5, E-6 and E-7 preferred stock in three private
placements of preferred stock. In connection with these private placements, we
issued and sold subordinated notes to purchase preferred stock prior to the
private placements. These notes were automatically converted into preferred
stock at the closing of the private placement.

In October 1997, we issued and sold subordinated notes in the aggregate
principal amount of $2.5 million and warrants to purchase approximately 83,000
shares of our Series E-5 preferred stock with an exercise price of $6.00 per
share. The warrants for Series E-5 preferred stock were exercised in full upon
the closing of the Series E-5 financing. In March 1998 and May 1998, we issued
and sold an aggregate of 2,481,671 shares of our Series E-5 preferred stock at
$6.00 per share in exchange for $11.3million in cash, forgiveness of the
subordinated notes and the exercise of the Series E-5 warrants.

In February and March of 1999, we issued and sold subordinated notes in the
aggregate principal amount of $15.8 million and warrants to purchase
approximately 171,000 shares of our Series E-6 preferred stock with an exercise
price of $6.004 per share. In April 1999, we issued and

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sold an aggregate of 3,456,391 shares of our Series E-6 preferred stock at
$6.004 per share in exchange for $15.6million in cash and forgiveness of the
subordinated notes.

In January 2000, we issued and sold subordinated notes in the aggregate
principal amount of $5.0million and warrants to purchase approximately 100,000
shares of our Series E-7 preferred stock with an exercise price of $10.12 per
share. In March 2000, we issued and sold an aggregate of 2,449,639 shares of our
Series E-7 preferred stock at $10.12 per share in exchange for $18.8million in
cash and forgiveness of the subordinated notes.

The following table summarizes our issuances of preferred stock,
subordinated notes and warrants to directors, executive officers, and holders of
more than 5% of our capital stock (prior to or upon the purchase of the
preferred stock or securities convertible into or exercisable for shares of our
preferred stock) within the three preceding fiscal years.

Aggregate
amount of
subordinated Shares of
notes preferred stock
Shares of converted issuable upon
preferred (principal and exercise of
Investor stock purchased interest) warrants
--------- ---------------- --------------- ---------------
<S> <C> <C> <C>
Entities affiliated with Crescendo Ventures................ 899,324 $1,274,868 33,063
Entities affiliated with Goldman Sachs and Company......... 521,092 1,926,471 42,327
Greylock Equity............................................ 46,010 230,055 0
Entities affiliated with Hallador Venture Partners......... 239,393 603,708 8,060
Harris Corporation......................................... 362,483 1,078,897 23,282
Entities affiliated with INVESCO Private Capital, Inc...... 1,462,045 977,125 19,309
Entities affiliated with Kinship Partners II, L.P.......... 124,907 565,938 9,867
Entities affiliated with Morgenthaler Ventures............. 1,062,807 1,343,490 37,300
Entities affiliated with Oak Investment Partners........... 547,432 1,678,586 35,786
Entities affiliated with Sigma Partners.................... 25,913 129,575 0
Entities affiliated with Temasek Holdings (Private) Limited 875,762 0 0
Vertex Technology Fund..................................... 503,449 651,506 18,116
Entities affiliated with Walden Group...................... 899,007 1,079,426 23,546
</TABLE>

TRANSACTIONS WITH TRW

In connection with our merger with Milliwave in March 2000, we issued to
TRW 13,963,063 shares of our Series T-1 preferred stock, which will convert into
common stock on a one-for-one basis upon the closing of this offering. We also
entered into the following agreements with TRW: a supply agreement, which
provides for our purchase from TRW of specified gallium arsenide devices; a
license agreement for the license to us of certain TRW intellectual property
used in products we produce for Nokia and Nortel Networks; and a services
agreement for the provision of technical support related to the production of
Endwave products incorporating TRW-produced devices and also including licensed
rights to related later developed intellectual property. In addition we entered
into agreements with TRW for the supply of RF subsystems by us in fulfillment of
TRWs contractual arrangements with Nokia and Nortel Networks. For a description
of the supply agreement, license agreement, services agreement and other
agreements, see Business TRW Relationship.

68
<PAGE>

TRANSACTIONS WITH MANAGEMENT

Mr. Keible, our Chief Executive Officer and President, is a substantial
shareholder in and a director of Promex Industries, which leases approximately
12,000 square feet to us at our Santa Clara facility for an aggregate annual
rent of approximately $144,000 under a lease expiring November 2000.

69
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of our outstanding common stock as of June 30, 2000:

o each person or group who beneficially owns more than 5% of our common
stock;

o each of our directors;

o each of the executive officers; and

o all of our executive officers and directors as a group.

Beneficial ownership of shares is determined under the rules of the
Securities and Exchange Commission and generally includes shares over which a
person exercises sole or shared voting or investment power. Except as indicated
by footnote, and subject to applicable community property laws, each person
identified in the table possesses sole voting and investment power with respect
to all shares of common stock held by them. Shares of common stock subject to
options currently exercisable or exercisable within 60 days of June30, 2000 are
deemed outstanding for calculating the percentage of outstanding shares of the
person holding these options, but are not deemed outstanding for calculating the
percentage of any other person. Applicable percentage ownership in the following
table is based on 26,543,266 shares of common stock outstanding as of June30,
2000, after giving effect to the conversion of all outstanding preferred stock
into common stock upon the closing of the offering, and _______ shares of common
stock outstanding immediately following the completion of this offering.

Unless otherwise indicated in the table, the address of each stockholder
identified in the table is 321 Soquel Way, Sunnyvale, California 94085.

Percentage of Shares
Outstanding
------------------------------
------------------------------
Name and Address Shares Before After
Offering Offering
------------------- -------------- --------------- --------------
<S> <C> <C>
TRW Inc........................................................ 13,963,063 52.6 %
1900 Richmond Road
Cleveland, OH 44124

Entities Affiliated with Invesco
Private Capital, Inc. (1)...................................... 1,481,355 5.6
1166 Avenue of the Americas
New York, NY 10036

Entities Affiliated with Morgenthaler
Ventures (2)................................................... 1,448,357 5.5
Terminal Tower
50 Public Square, Suite 2700
Cleveland, OH 44113

Edward A. Keible, Jr. (3)...................................... 864,249 3.2
Donald J. Dodson, Jr........................................... 252,300 *
Bruce M. Margetson............................................. 220,800 *
Julianne M. Biagini (4)........................................ 174,248 *
James G. Bybokas (5)........................................... 210,000 *
John J. Mikulsky (6)........................................... 252,499 *
Wes Bush.......................................................
Timothy Hannemann..............................................
Esfandiar Lohrasbpour (1)...................................... 1,481,355 5.6
Robert D. Pavey (2)............................................ 1,448,357 5.5
All directors and executive officers as a group 4,789,560 17.0
(10 persons)(7).............................................
--------------- --------------
</TABLE>

______________
* Represents beneficial ownership of less than 1%.

70
<PAGE>

(1) Includes 31,799 shares held by Chancellor Private Capital Offshore Partners
I, C.V., 339,194 shares held by Chancellor Private Capital Offshore
Partners II L.P., 206,148 shares held by Chancellor Private Capital
Partners III L.P. and 884, 904 shares held by Citiventure 96 Partnership
Ltd. Also includes 19,310 shares issuable upon exercise of warrants
exercisable within 60 days of June 30, 2000. INVESCO Private Capital, Inc.
is the investment advisor and manager to the Chancellor funds and
Citiventure 96 Partnership Ltd. Mr.Lohrasbpour, a director of Endwave, is
a Managing Director of INVESCO Private Capital, Inc. In such capacity,
Mr.Lohrasbpour may be deemed to have an indirect pecuniary interest in an
indeterminate portion of the shares beneficially owned by the Chancellor
funds and Citiventure 96 Partnership Ltd. Mr.Lohrasbpour disclaims
beneficial ownership of the shares held by the Chancellor funds and
Citiventure 96 Partnership Ltd. within the meaning of Rule 13d-3 under the
Securities Act of 1934.

(2) Includes 943,445 shares held by Morgenthaler Venture Partners III and
494,071 shares held by Morgenthaler Venture Partners IV. Also includes
10,841 shares issuable upon exercise of warrants exercisable within 60 days
of June 30, 2000. Mr.Pavey, a director of Endwave, is a general partner of
Morgenthaler Management Partners which is the manager of the Morgathaler
funds. In such capacity, Mr.Pavey may be deemed to have an indirect
pecuniary interest in an indeterminate portion of the shares beneficially
owned by the Morgenthaler funds. Mr.Pavey disclaims beneficial ownership
of the shares held by the Morgenthaler funds within the meaning of Rule
13d-3 under the Securities Act of 1934.

(3) Includes 645,437 shares issuable upon exercise of options exercisable
within 60 days of June 30, 2000, some of which will be subject to
repurchase by Endwave at such date, if issued.

(4) Includes 4,937 shares held in a trust for the benefit of Ms.Biaginis
daughter. Also includes 135,142 shares issuable upon exercise of options
exercisable within 60 days of June 30, 2000, some of which will be subject
to repurchase by Endwave at such date, if issued.

(5) Includes 188,500 shares issuable upon exercise of options exercisable
within 60 days of June 30, 2000, some of which will be subject to
repurchase by Endwave at such date, if issued.

(6) Includes 231,718 shares issuable upon exercise of options exercisable
within 60 days of June 30, 2000, some of which will be subject to
repurchase by Endwave at such date, if issued.

(7) See footnotes 1 through 6 above, as applicable.

71
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

We are a Delaware corporation and our affairs are governed by our
certificate of incorporation, as amended, our bylaws, as amended, and the
Delaware General Corporation Law. The following description of our capital stock
is qualified in all respects by the certificate of incorporation and the bylaws,
which have been filed as exhibits to the registration statement to which this
prospectus forms a part.

Upon the closing of this offering, we will be authorized to issue
100,000,000 shares of common stock, $.001 par value per share, and 5,000,000
shares of undesignated preferred stock, $.001 par value per share. Immediately
following the closing of this offering, based on the number of shares
outstanding as of June 30, 2000 held of record by approximately 167 stockholders
assuming the conversion of preferred stock, there will be _____________ shares
of common stock outstanding.

COMMON STOCK

As of June 30, 2000 the issued and outstanding shares of common stock are,
and the shares of common stock being offered by us hereby will be upon payment
therefor, validly issued, fully paid and nonassessable. Subject to the prior
rights of the holders of any preferred stock, the holders of outstanding shares
of common stock are entitled to receive dividends out of assets legally
available therefor at such times and in such amounts as the board of directors
may from time to time determine. The shares of common stock are neither
redeemable nor convertible and the holders thereof have no preemptive or
subscription rights to purchase any securities of Endwave. Upon liquidation,
dissolution or winding up of Endwave, the holders of common stock are entitled
to receive pro rata the assets of Endwave which are legally available for
distribution, after payment of all debts and other liabilities and subject to
the prior rights of any holders of any preferred stock then outstanding. Each
outstanding share of common stock is entitled to one vote on all matters
submitted to a vote of stockholders.

PREFERRED STOCK

Upon the closing of this offering, all outstanding shares of preferred
stock will automatically convert into shares of common stock. Effective upon the
closing of this offering, we will be authorized to issue 5,000,000 shares of
undesignated preferred stock. The board of directors will have the authority to
issue the preferred stock in one or more series and to fix the price, rights,
preferences, privileges and restrictions thereof, including dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of shares constituting
a series or the designation of such series, without any further vote or action
by our stockholders. The issuance of preferred stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of delaying, deferring or preventing a change in
control of Endwave without further action by the stockholders and may adversely
affect the market price of the common stock and the voting and other rights of
the holders of common stock. We have no current plans to issue any shares of
preferred stock.

WARRANTS

Upon the closing of this offering, a warrant to purchase 6,250 shares of
our common stock will be outstanding if not earlier exercised.

<PAGE>

REGISTRATION RIGHTS

The holders of 25,782,488 shares of preferred stock are entitled to certain
rights with respect to the registration of these shares under the Securities Act
of 1933, as amended. Under the terms of an agreement between Endwave and the
holders, after the date of this offering, the holders of at least 20% of these
shares may request, on no more than three occasions, that we use our best
efforts to register their shares, provided such offering includes at least 30%
of the registrable securities then outstanding. In addition, if we propose to
register any of our securities under the Securities Act, either for our own
account or for the account of other security holders exercising registration
rights, the holders are entitled to notice of such registration and are entitled
to include shares of such common stock therein. The holders of these shares may
also require us to register all or a portion of these shares on Form S-3 under
the Securities Act when use of such form becomes available to Endwave. All
registration rights described above are subject to conditions and limitations,
including the right of the underwriters of an offering to limit the number of
shares to be included in such registration. If the holders, by exercising their
demand registration rights, cause a large number of securities to be registered
and sold in the public market, such sales could have an adverse effect on the
market price for our common stock. If we were to initiate a registration and
include shares held by such holders pursuant to the exercise of their piggyback
registration rights, such sales may have an adverse effect on our ability to
raise capital.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS
AND OF DELAWARE LAW

Upon the closing of this offering, we will be subject to the provisions of
Section 203 of the Delaware General Corporation Law regulating corporate
takeovers. Section 203 prevents Delaware corporations, including those that are
listed on the Nasdaq National Market, from engaging, under certain
circumstances, in a "business combination," which includes a merger or sale of
more than 10% of the corporation's assets, with any "interested stockholder,"
that is, a stockholder who owns 15% or more of the corporation's outstanding
voting stock, as well as affiliates and associates of any such person, for three
years following the date that such stockholder became an "interested
stockholder" unless:

o the transaction that resulted in the stockholder becoming an
"interested stockholder" was approved by the board of directors prior
to the date the "interested stockholder" attained such status;

o upon consummation of the transaction that resulted in the stockholder
becoming an "interested stockholder," the "interested stockholder"
owned at least 85% of the voting stock of the corporation outstanding
at the time the transaction commenced, excluding those shares owned by
(i) persons who are directors as well as officers and (ii) employee
stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer; or

o on or subsequent to such date, the "business combination" is
approved by the board of directors and authorized at an annual or
special meeting of stockholders by the affirmative vote of at least
two-thirds of the outstanding voting stock that is not owned by the
"interested stockholder."

A Delaware corporation may "opt out" of Section 203 with an express
provision in its original certificate of incorporation or an express provision
in its certificate of incorporation or bylaws resulting from a stockholders'
amendment approved by at least a majority of the outstanding voting shares. We
have not "opted out" of the provisions of Section 203. This statute could
prohibit or delay mergers or other takeover or change-of-control attempts with
respect to Endwave and, accordingly, may discourage attempts to acquire us.

<PAGE>

CHARTER DOCUMENTS

Our certificate of incorporation and bylaws include a number of provisions
that may have the effect of deterring or impeding hostile takeovers or changes
of control or management. These provisions include:

o our board of directors is classified into three classes of directors
with staggered three-year terms;

o the authority of our board of directors to issue up to 5,000,000
shares of preferred stock and to determine the price and the rights
preferences and privileges of these shares, without stockholder
approval;

o our stockholders may not act by written consent;

o no provision for cumulative voting;

o procedures for the advance notification of stockholder nominations and
proposals; and

o the ability of our board of directors to alter our bylaws in
certain respects without stockholder approval.

Such provisions may have the effect of delaying or preventing a change of
control.

Our certificate of incorporation and bylaws provide that we will indemnify
officers and directors against losses that they may incur in investigations and
legal proceedings resulting from their services to Endwave, which may include
services in connection with takeover defense measures. Such provisions may have
the effect of preventing changes in our management.

OPTION ACCELERATION AND SEVERANCE BENEFITS

In March 2000 in connection with our merger with Milliwave, our board of
directors approved a plan providing for the acceleration of vesting, under
certain circumstances, of a percentage of the stock options granted to our
officers under our equity incentive plans prorated based on years of employment
with us. Under the plan, an unvested portion of each officer's stock options
under our equity incentive plans becomes vested and exercisable upon a change in
control. In addition, severance benefits will be paid to such officer if
terminated without cause or if Endwave is acquired pursuant to a change in
control and the officer is terminated without cause within six months of the
change in control.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is .

NATIONAL MARKET LISTING

We have applied for listing of our common stock on the Nasdaq Stock
Market's National Market under the symbol "ENWV."

74
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common
stock. Future sales of substantial amounts of our common stock in the public
market could adversely affect prevailing market prices from time to time. For a
period of 180 days or more following this offering a large number of shares of
our common stock will not be freely tradable due to contractual and legal
restrictions as described below. Sales of substantial amounts of our common
stock in the public market after these restrictions lapse could depress the
prevailing market price and limit our ability to raise equity capital in the
future.

Upon the closing of this offering, and based on shares outstanding as of
June 30, 2000, we will have an aggregate of ____________ shares of common stock
outstanding, assuming no exercise of the underwriters' over-allotment option and
no exercise of outstanding options or warrants. Of the outstanding shares, the
shares sold in this offering will be freely tradable, except that any shares
held by our "affiliates", as that term is defined in Rule 144 promulgated under
the Securities Act, may only be sold in compliance with the limitations
described below. The remaining shares of common stock held by existing
stockholders will be deemed restricted securities as defined under Rule 144.
Restricted securities may be sold in the public market only if registered or if
they qualify for an exemption from registration under Rules 144, 144(k) or 701
promulgated under the Securities Act, which are summarized below. In accordance
with the lock-up agreements described below and subject to the provisions of
Rules 144, 144(k) and 701, additional shares will be available for sale in the
public market at the following times:

NUMBER OF SHARES DATE
---------------- ----
462,318 After the date of this prospectus

130,603 90 days from the date of this prospectus

25,884,574 At various times after 180 days from the date of
this prospectus

In general, under Rule 144, as currently in effect, a person, or persons
whose shares are aggregated, including an affiliate, who has beneficially owned
shares for at least one year is entitled to sell, within any three-month period
commencing 90 days after the date of this prospectus, a number of shares that
does not exceed the greater of 1% of the then outstanding shares of common
stock, which will equal approximately ___________ shares immediately after this
offering or the average weekly trading volume in the common stock during the
four calendar weeks preceding the date on which notice of such sale is filed,
subject to certain restrictions. In addition, a person who is not deemed to have
been an affiliate of ours at any time during the 90 days preceding a sale and
who has beneficially owned the shares proposed to be sold for at least two years
would be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. To the extent that shares were acquired from an
affiliate of ours, the person's holding period for the purpose of effecting a
sale under Rule 144 commences on the date of transfer from the affiliate.

Any of our employee, officer, director, advisor or consultant who purchased
his or her shares pursuant to a written compensatory plan or contract is
entitled to rely on the resale provisions of Rule 701, which permits
non-affiliates to sell their Rule 701 shares without having to comply with the
public information, holding period, volume limitation or notice provisions of
Rule 144 and permits affiliates to sell their Rule 701 shares without having to
comply with Rule 144's holding period restrictions, in each case commencing 90
days after we become subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934.

LOCK-UP AGREEMENTS

Our directors, officers and stockholders who hold approximately 25,884,000
shares in the aggregate, have agreed that they will not offer, sell or agree to
sell, directly or indirectly, or otherwise dispose of any shares of common stock
without the prior written consent of Deutsche

75
<PAGE>

Bank Securities Inc. for a period of 180 days from the date of this prospectus.
Please see "Underwriting."

We have agreed not to sell or otherwise dispose of any shares of common
stock during the 180-day period following the date of the prospectus, except we
may issue, and grant options to purchase, shares of common stock under our 2000
Equity Incentive Plan, our 2000 Employee Stock Purchase Plan and our 2000
Non-Employee Director Plan. In addition, we may issue shares of common stock in
connection with any acquisition of another company if the terms of such issuance
provide that such common stock shall not be resold prior to the expiration of
the 180-day period referenced in the preceding sentence.

REGISTRATION RIGHTS

Following this offering, some of our stockholders will have registration
rights. Please see, "Description of Capital Stock-Registration Rights."

STOCK OPTIONS

In addition, options to purchase 4,486,138 shares of our common stock are
outstanding as of June 30, 2000 under our 1992 Stock Option Plan and our 2000
Equity Incentive Plan. Following this offering, we expect to register the shares
underlying these options. This registration statement will automatically become
effective upon filing. Accordingly, subject to the exercise of such options,
shares included in such registration statement will be available for sale in the
open market immediately after the 180-day lock-up period expires.

76
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement, the
underwriters named below, through their representatives Deutsche Bank Securities
Inc., J.P. Morgan Securities Inc., U.S. Bancorp Piper Jaffray Inc. and Epoch
Securities, Inc. have severally and not jointly agreed to purchase from us, the
following respective number of shares of our common stock at a public offering
less the underwriting discounts and commissions set forth on the cover page of
this prospectus:

UNDERWRITERS: NUMBER OF SHARES
--------------- ------------------
Deutsche Bank Securities Inc.............................
J.P. Morgan Securities Inc...............................
U.S. Bancorp Piper Jaffray Inc...........................
Epoch Securities, Inc....................................
------------------

Total......................................................
==================

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares of common stock offered hereby are subject
to certain conditions precedent and that the underwriters will purchase all
shares of the common stock offered hereby, other than those covered by the
over-allotment option described below, if any of these shares are purchased.

The underwriters propose to offer the shares of common stock to the
public at the public offering price set forth on the cover page of this
prospectus and to dealers at a price that represents a concession not in excess
of $ _____________ per share under the public offering price. The underwriters
may allow, and these dealers may re-allow, a concession of not more than $
__________ per share to certain other dealers. After the initial public
offering, representatives of the underwriters may change the offering price and
other selling terms.

We have granted to the underwriters an option, exercisable not later than
30 days after the date of this prospectus, to purchase up to ___________
additional shares at the public offering price, less the underwriting fees. The
underwriters may exercise this option solely to cover over-allotments, if any,
made in connection with this offering. To the extent that the underwriters
exercise this option, each underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of additional shares
of common stock as the number of shares of common stock to be purchased by it in
the above table bears to the total number of shares of common stock offered
hereby. We will be obligated, pursuant to the option, to sell these additional
shares of common stock to the underwriters to the extent the option is
exercised. If any additional shares of common stock are purchased, the
underwriters will offer the additional shares on the same terms as those on
which common stock offered hereby are being offered.

The underwriting fee is equal to the public offering price per share of
common stock less the amount paid by the underwriters to us per share of common
stock. The underwriting fee is currently expected to be approximately _% of the
initial public offering price. We have agreed to pay the underwriters the
following fees, assuming either no exercise or full exercise by the underwriters
of the underwriters' over-allotment option:

<TABLE>
<CAPTION>
TOTAL FEES
-------------------------------------------------------------
WITHOUT EXERCISE OF WITH FULL EXERCISE
OVER-ALLOTMENT OF OVER-ALLOTMENT
FEE PER SHARE OPTION OPTION
-------------- --------------------- ----------------------
<S> <C> <C> <C>
Fees paid by Endwave............................ $ $ $
</TABLE>

In addition, we estimate that our share of the total expenses of this
offering, excluding underwriting discounts and commissions, will be
approximately $ __________ .

77
<PAGE>

We have agreed to indemnify the underwriters against some specified types
of liabilities, including liabilities under the Securities Act, and to
contribute to payments the underwriters may be required to make in respect of
any of these liabilities.

Each of our officers and directors, and substantially all of our
stockholders and holders of options and warrants to purchase our stock, have
agreed not to offer, sell, contract to sell or otherwise dispose of, or enter
into any transaction that is designed to, or could be expected to, result in the
disposition of any shares of our common stock or other securities convertible
into or exchangeable or exercisable for shares of our common stock or
derivatives of our common stock owned by these persons prior to this offering or
common stock issuable upon exercise of options or warrants held by these persons
for a period of 180 days after the effective date of the registration statement
of which this prospectus is a part without the prior written consent of Deutsche
Bank Securities Inc. This consent may be given at any time without public
notice. We have entered into a similar agreement with the representatives of the
underwriters. There are no agreements between the representatives and any of our
stockholders or affiliates releasing them from these lock-up agreements prior to
the expiration of the 180-day period.

The representatives of the underwriters have advised us that the
underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.

In order to facilitate the offering of our common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
market price of our common stock. Specifically, the underwriters may over-allot
shares of our common stock in connection with this offering, thus creating a
short position in our common stock for their own account. A short position
results when an underwriter sells more shares of common stock than that
underwriter is committed to purchase. Additionally, to cover these
over-allotments or to stabilize the market price of our common stock, the
underwriters may bid for, and purchase, shares of our common stock in the open
market. Finally, the representatives, on behalf of the underwriters, may also
reclaim selling concessions allowed to an underwriter or dealer if the
underwriting syndicate repurchases shares distributed by that underwriter or
dealer. Any of these activities may maintain the market price of our common
stock at a level above that which might otherwise prevail in the open market.
These transactions may be effected on the Nasdaq National Market or otherwise.
The underwriters are not required to engage in these activities and, if
commenced, may end any of these activities at any time.

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to ______shares or 5% of our common stock being sold
in this offering for our vendors, employees, family members of employees,
customers and other third parties. The number of shares of our common stock
available for sale to the general public will be reduced to the extent these
reserved shares are purchased. Any reserved shares that are not purchased by
these persons will be offered by the underwriters to the general public on the
same basis as the other shares in this offering.

Epoch Securities, Inc. is an investment banking firm formed in November
1999. In addition to this offering, Epoch Securities, Inc. has engaged in the
business of public and private equity investing and financing and financial
advisory services since its inception. The five senior members of the Epoch
Securities, Inc. investment banking team have in the aggregate in excess of 40
years of investment banking and related experience in the securities industry.
Epoch Securities, Inc. does not have any material relationship with Endwave or
any of its officers, directors or other controlling persons, except that Epoch
Securities has a contractual relationship with Endwave under the terms of the
underwriting agreement entered into in connection with this offering.

U.S. Bancorp Piper Jaffray acted as our broker in connection with our
merger with Milliwave. As compensation for those services, we paid U.S. Bancorp
Piper Jaffray a cash fee of $732,381. In addition, an investment fund affiliated
with U.S. Bancorp Piper Jaffray participated in our Series G preferred stock
financing in March 2000. The investment fund purchased 49,407 shares of
preferred stock for $499,999. Rule 2710(c)(7) of the National Association of
Securities Dealers'

78
<PAGE>

conduct rules prohibits the sale or transfer of the shares acquired as described
in this paragraph for one year from the effective date of this offering.

PRICING OF THIS OFFERING

Prior to this offering, there has been no established trading market for
our common stock. Consequently, the initial public offering price for our common
stock has been determined by negotiations among us and the representatives of
the underwriters. Among the primary factors considered in determining the
initial public offering price were:

o prevailing market conditions;

o our results of operations in recent periods;

o the present stage of our development;

o the market capitalization and stage of development of the other
companies that we and the representatives of the underwriters believe
to be comparable to our business; and

o estimates of our business potential.

79
<PAGE>

LEGAL MATTERS

Cooley Godward LLP, San Francisco, California, will pass upon the
validity of the shares of common stock offered hereby for us. Gibson, Dunn &
Crutcher LLP, San Francisco, California, will pass upon certain legal matters in
connection with this offering for the underwriters. An investment partnership
associated with Cooley Godward LLP owns 32,337 shares of our common stock.

EXPERTS

The financial statements of TRW Milliwave Inc. at December 31, 1999 and
1998, and for the two years then ended and for the periods from October 1, 1997
through December 31, 1997 and from January 1, 1997 through September 30, 1997,
appearing in this prospectus have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere in this
prospectus, and are included in reliance upon such report given on the authority
of such firm as experts in accounting and auditing.

The financial statements of Endgate Corporation at June 30, 1999 and
1998, and for each of the years in the period ended June 30, 1999, appearing in
this prospectus have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon appearing elsewhere in this prospectus, and
are included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act with respect to the common stock.
For further information regarding us and our common stock, please refer to the
registration statement and exhibits and schedules filed as part of the
registration statement. Each statement in this prospectus referring to a
contract, agreement or other document filed as an exhibit to the registration
statement is qualified in all respects by the filed exhibit.

You may read and copy all or any portion of the registration statement or
any other information that we file at the Securities and Exchange Commission's
public reference room at 450 Fifth Street, N.W., Washington D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the Securities and Exchange Commission at 1-800-SEC-0330
for further information on the operation of the public reference rooms. Our
Securities and Exchange Commission filings, including the registration
statement, are also available to you on the Securities and Exchange Commission's
website (http://www.sec.gov).

Upon completion of this offering, we will become subject to the
information and reporting requirements of the Securities Exchange Act of 1934,
as amended, and in accordance therewith, will file periodic reports, proxy
statements and other information with the SEC. Upon approval of the common stock
for the quotation on the Nasdaq National Market, such reports, proxy and
information statements and other information may also be inspected at the office
of Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.

We intend to provide our stockholders with annual reports containing
financial statements audited by an independent public accounting firm and to
make available to our stockholders quarterly reports containing unaudited
financial data for the first three quarters of each year.

<PAGE>
ENDWAVE CORPORATION
INDEX TO FINANCIAL STATEMENTS
<TABLE>

INDEX TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS FOR ENDWAVE CORPORATION

<S> <C>
Unaudited Pro Forma Condensed Combining Balance Sheets.................................................... F-3
Unaudited Pro Forma Condensed Combining Statements of Operations.......................................... F-4
Notes to Unaudited Pro Forma Condensed Combining Financial Statements..................................... F-7

INDEX TO FINANCIAL STATEMENTS FOR ENDGATE CORPORATION

Report of Ernst & Young LLP, Independent Auditors......................................................... F-8
Balance Sheets............................................................................................ F-9
Statements of Operations.................................................................................. F-10
Statements of Changes in Stockholders' Equity............................................................. F-11
Statements of Cash Flows.................................................................................. F-12
Notes to Financial Statements............................................................................. F-13

INDEX TO FINANCIAL STATEMENTS FOR TRW MILLIWAVE INC.

Report of Ernst & Young LLP, Independent Auditors......................................................... F-24
Balance Sheets............................................................................................ F-25
Statements of Operations.................................................................................. F-26
Statements of Changes in Shareholder's Equity............................................................. F-27
Statements of Cash Flows.................................................................................. F-28
Notes to Financial Statements............................................................................. F-29

INDEX TO CONDENSED UNAUDITED FINANCIAL STATEMENTS FOR ENDWAVE CORPORATION

Unaudited Balance Sheets.................................................................................. F-36
Unaudited Statements of Operations........................................................................ F-37
Unaudited Statement of Changes in Stockholders' Equity.................................................... F-38
Unaudited Statements of Cash Flows........................................................................ F-39
Notes to Condensed Unaudited Financial Statements......................................................... F-40

</TABLE>

F-1
<PAGE>

ENDWAVE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS

On March 31, 2000, Endgate merged with TRW Milliwave Inc., a
wholly-owned subsidiary of TRW Inc. In the merger, TRW Milliwave merged into
Endgate and Endgate issued shares of its capital stock to TRW in exchange for
TRW's shares in TRW Milliwave. Endgate was the surviving corporation in the
merger and TRW Milliwave ceased to exist as a separate legal entity. However,
because TRW owned more than half of Endgate's outstanding capital stock
immediately after the merger, TRW Milliwave is treated as the acquiring company
for accounting purposes. As a result, Endgate ceased to be a separate accounting
entity as of the date of the merger, and Endwave's financial statements prior to
the merger are those of TRW Milliwave. TRW Milliwave and Endwave have a fiscal
year end of December 31. Prior to the merger, Endgate's fiscal year end was June
30.

The total purchase costs of the transactions have been calculated with
TRW Milliwave treated as the accounting acquiror. As consideration for the
merger, we issued shares of Series T-1 preferred stock. The merger was accounted
for using the purchase method of accounting. The aggregate purchase price of
$139.9 million was allocated to the assets and liabilities acquired based on
their fair values as follows (in thousands):

AMOUNT
---------------
Tangible net assets.............................................$ 24,377
In-process research and development............................. 11,700
Purchased technology............................................ 16,100
Customer list................................................... 2,600
Acquired workforce.............................................. 4,900
Goodwill........................................................ 80,218
---------------
$ 139,895
===============

In determining the total consideration as well the allocation of the
purchase price including the amount of in-process research and development,
Milliwave considered as part of their analysis an appraisal prepared by an
independent appraisal firm using established valuation techniques in the high
technology industry. The amount allocated to in-process research and development
was expensed upon acquisition because technological feasibility has not been
established and no future alternative uses existed. The in-process research and
development was identified and valued through extensive interviews and
discussions with management and the analysis of data provided by Endgate
concerning developmental products, their respective stage of development, the
time and resources needed to complete them, their expected income generating
ability, target markets and associated risks. The income approach, which
includes an analysis of the markets, cash flows, and risks associated with
achieving such cash flows, was the primary technique utilized in valuing the
in-process research and development project. A portion of the purchase price was
allocated to the developmental project based on the appraised fair value of such
project.

The accompanying pro forma financial statements are presented in
accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed
combining statements of operations were prepared as if the acquisition was
completed on January 1, 1999. To prepare the pro forma unaudited condensed
combining statements of operations, the Endgate statement of operations for the
year ended December 31, 1999 has been combined with the statement of operations
of TRW Milliwave for the period from January 1, 1999 to December 31, 1999. This
method of combining the companies is only for presentation of pro forma
unaudited condensed combining financial statements. The unaudited pro forma
condensed combining financial statements are subject to a number of estimates,
assumptions and uncertainties and do not purport to reflect the results of
operations that would have occurred had this acquisition taken place on the date
indicated nor do they purport to reflect results of operations that will occur
in the future. The unaudited pro forma condensed combining financial statements
should be read in conjunction with the historical financial statements of
Endgate and TRW Milliwave. The unaudited pro forma condensed combining
statements of operations do not include the $11.7 million charge for purchased
in-process research and development arising from this acquisition, as it is a
non-recurring charge. This charge is included in the actual consolidated
statement of operations of TRW Milliwave in the quarter ended March 31, 2000,
the date of the acquisition.

F-2

<PAGE>

ENDWAVE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
---------------------------------------------------------------
PRO FORMA PRO FORMA
ENDGATE MILLIWAVE ADJUSTMENTS NOTES COMBINED
----------- ------------ ------------- ------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Current assets:
Cash and cash equivalents................. $ 1,819 $ 373 $ -- $ 2,192
Accounts receivable, net.................. 771 1,343 -- 2,114
Accounts receivable from affiliates....... -- 1,981 -- 1,981
Inventories............................... 2,886 4,666 -- 7,552
Other current assets...................... 213 137 -- 350
----------- ------------ ------------- -------------
Total current assets.................... 5,689 8,500 -- 14,189

Property and equipment, net................. 3,077 10,877 -- 13,954

Goodwill, net............................... -- 5,744 80,218 A 85,962
Intangible assets, net...................... -- -- 23,600 A 23,600
Other assets, net........................... 285 -- 285
----------- ------------ ------------- -------------
$ 9,051 $ 25,121 $103,818 $ 137,990
=========== ============ ============= =============

Liabilities and stockholders' equity:
Current liabilities:
Accounts payable.......................... $ 1,423 $ 3,707 $ 895 B $ 6,025
Accounts payable to affiliates............ -- 2,169 -- 2,169
Accrued compensation...................... 772 391 -- 1,163
Shareholder notes payable................. -- -- -- --
Other accrued liabilities................. 116 514 -- 630
Deferred income........................... 89 -- -- 89
----------- ------------ ------------- -------------
Current portion of capital lease
obligations............................. 472 -- -- 472
----------- ------------ ------------- -------------
Total current liabilities............... 2,872 6,781 895 10,548

Deferred income............................. 312 -- -- 312
Deferred income taxes....................... -- 327 (327) C --
Long-term portion of capital lease
obligations............................... 857 -- -- 857

Commitments................................. -- -- --

Stockholders' equity:
Preferred stock........................... 65,646 -- 77,332 D 142,978
Common stock.............................. 3,588 -- -- 3,588
Advances from TRW Inc..................... -- 13,047 (13,047) E --
Additional paid in capital................ -- 10,858 (10,858) F --
Deferred stock compensation............... (2,701) -- -- (2,701)
Accumulated deficit....................... (61,523) (5,892) 49,823 G (17,592)
----------- ------------ ------------- -------------
Total stockholders' equity.............. 5,010 18,013 103,250 126,273
----------- ------------ ------------- -------------
$ 9,051 $ 25,121 $ 103,818 $ 137,990
=========== ============ ============= =============
</TABLE>

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS

F-3

<PAGE>

ENDWAVE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>

YEAR ENDED DECEMBER 31, 1999
------------------------------------------------------------------
ENDGATE MILLIWAVE PRO FORMA NOTES PRO FORMA
ADJUSTMENTS COMBINED
------------ ----------- ------------- ------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Product revenues............................ $ 1,326 $ 12,419 $ -- $ 13,745
Development fees............................ 1,302 -- -- 1,302
------------ ----------- ------------- ----------------
Total revenues............................ 2,628 12,419 -- 15,047

Costs and expenses:
Cost of product revenues.................... 7,278 11,221 -- 18,499
Research and development.................... 10,599 326 -- 10,925
Sales and marketing......................... 860 456 -- 1,316
General and administrative.................. 1,956 1,914 -- 3,870
Amortization of goodwill and other
intangible assets......................... -- 1,536 17,672 H 19,208
Amortization of deferred stock compensation. 710 -- -- 710
------------ ----------- ------------- ----------------
Total costs and expenses.................. 21,403 15,453 17,672 54,528

Loss from operations........................... (18,775) (3,034) (17,672) (39,481)
Interest income (expense) and other,
net......................................... (585) -- -- (585)
------------ ----------- ------------- ----------------
Net loss before income tax benefit (expense)... (19,360) (3,034) (17,672) (40,066)
Income tax benefit (expense)................... -- 518 (518) J --
------------ ----------- ------------- ----------------
Net loss....................................... $ (19,360) $ (2,516) $ (18,190) $ (40,066)
============ =========== ============= ================

Basic and diluted net loss per share........... K $ (2.18)
================

Shares used in computation of basic and
diluted net loss per share.................. 18,400,968
================
</TABLE>

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBING FINANCIAL STATEMENTS

F-4

<PAGE>

ENDWAVE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

SIX MONTHS ENDED JUNE 30, 2000
-------------------------------------------------------------------
PRO FORMA PRO FORMA
ENDGATE MILLIWAVE ADJUSTMENTS NOTES COMBINED
---------- ------------- ------------- ------- -----------------
<S> <C> <C> <C> <C> <C>
Revenues:
Product revenues .......................... $ 1,522 $ 14,537 $ -- $ 16,059
Development fees........................... 1,605 946 -- 2,551
---------- ------------- ------------- -----------------
Total revenues........................... 3,127 15,483 -- 18,610

Costs and expenses:
Cost of product revenues................... 4,780 19,196 -- 23,976
Research and development................... 2,824 3,732 -- 6,556
Sales and marketing........................ 437 854 -- 1,291
General and administrative................. 631 2,286 -- 2,917
Amortization of goodwill and other
intangible assets........................ -- 5,186 4,418 H 9,604
In-process research and
development.............................. -- 11,700 (11,700) I --
Amortization of deferred stock compensation 481 1,505 -- 1,986
---------- ------------- ------------- -----------------
Total costs and expenses................. 9,153 44,459 (7,282) 46,330

Loss from operations.......................... (6,026) (28,976) 7,282 (27,720)
Interest income (expense) and other, net...... (677) 353 -- (324)
---------- ------------- ------------- -----------------
Net loss before income tax benefit (expense).. (6,703) (28,623) 7,282 (28,044)
Income tax benefit (expense).................. -- 627 (627) J --
---------- ------------- ------------- -----------------
Net loss................................... $ (6,703) $ (27,996) $ 6,655 $ (28,044)
========== ============= ============= =================

Basic and diluted net loss per share.......... K $ (1.14)
=================
Shares used in computation of basic and
diluted net loss per share................. 24,622,700
=================
</TABLE>

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS

F-5
<PAGE>

ENDWAVE CORPORATION

UNAUDITEDPRO FORMA CONDENSED COMBINING STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

SIX MONTHS ENDED JUNE 30, 1999
-------------------------------------------------------------
PRO FORMA PRO FORMA
ENDGATE MILLIWAVE ADJUSTMENTS NOTES COMBINED
---------- ---------- ------------- ------- --------------
<S> <C> <C> <C> <C>
Revenues:
Product revenues...................... $ 462 $ 3,367 -- $ 3,829
Development fees...................... 221 -- -- 221
---------- ---------- ------------- --------------
Total revenues...................... 683 3,367 -- 4,050

Costs and expenses:
Cost of product revenues.............. 3,047 3,880 -- 6,927
Research and development.............. 5,289 142 -- 5,431
Sales and marketing................... 392 203 -- 595
General and administrative............ 1,042 1,149 -- 2,191
Amortization of goodwill and other
intangible assets................... -- 768 8,836 H 9,604
In-process research and development ..
Amortization of deferred stock
compensation........................ -- -- -- --
---------- ---------- ------------- --------------
Total costs and expenses................. 9,770 6,142 8,836 24,748

Loss from operations..................... (9,087) (2,775) (8,836) (20,698)
Interest income (expense) and other, net. (638) -- -- (638)
---------- ---------- ------------- --------------
Net loss before income tax benefit (9,725) (2,775) (8,836) $ (21,336)
(expense).............................
Income tax benefit (expense)............. -- 700 (700) J --
---------- ---------- ------------- --------------
Net loss.............................. $ (9,725) $ (2,075) $ (9,536) $ (21,336)
========== ========== ============= ==============

Basic and diluted net loss per share..... K $ (1.34)
==============
Shares used in computation of basic and
diluted net loss per share............ 15,864,426
==============
</TABLE>

SEE NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS

F-6
<PAGE>

ENDWAVE CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS

The following pro forma adjustments have been made to the pro forma
condensed combining financial statements:

A. To reflect the purchase price allocated to intangible assets as
follows (in thousands):

AMOUNT
-------------
Purchased technology................................... $ 16,100
Customer list.......................................... 2,600
Acquired workforce..................................... 4,900
Goodwill............................................... 80,218
-------------
$ 103,818
=============

B. To accrue merger related costs.

C. To eliminate the net deferred tax liabilities as the combined company
has a net deferred tax asset that has been fully reserved through a valuation
allowance.

D. To record the recapitalization and issuance of preferred stock to the
shareholder of TRW Milliwave for TRW Milliwave's common stock (in thousands):

AMOUNT
-------------
Value of stock issued...................................$ 114,950
Endgate accumulated deficit............................. (61,523)
Advances from TRW Inc................................... 13,047
Additional paid in capital of TRW Milliwave............. 10,858
-------------
$ 77,332
=============

E. To reflect the recapitalization of the company and forgiveness of the
intercompany payable.

F. To reflect the recapitalization of the company and conversion of TRW
Milliwave common stock into Endwave preferred stock.

G. To reflect the elimination of Endgate's historical accumulated deficit
and to reflect the write-off of the $11.7 million charge for purchased
in-process research and development arising from the merger.

H. To reflect pro forma amortization of the purchased intangibles over
the estimated useful lives as follows (in years):

ESTIMATED
LIFE
---------------
Purchased technology.................................... 6
Customer list........................................... 5
Acquired workforce...................................... 5
Goodwill................................................ 6

I. Adjustment to eliminate the $11.7 million charge for in-process
research and development as it is a non-recurring charge.

J. Adjustment to eliminate the income tax benefit recognized in the
historical TRW Milliwave financial statements due to realization through its
parent company, TRW Inc., as the combined company is not able to utilize these
losses at the present time.

K. Basic and diluted net loss per shares has been adjusted to reflect the
equivalent number of shares issued to complete the merger on an as if converted
basis.

F-7
<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Endgate Corporation

We have audited the accompanying balance sheets of Endgate Corporation as
of June 30, 1998 and 1999, and the related statements of operations,
stockholders' equity and cash flows for each of the three years ended June 30,
1999. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Endgate Corporation
at June 30, 1998 and 1999, and the results of its operations and its cash flows
for each of the three years ended June 30, 1999 in conformity with accounting
principles generally accepted in the United States.

Palo Alto, California
August 24, 1999

F-8
<PAGE>

ENDGATE CORPORATION

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
AS OF
AS OF JUNE 30, MARCH 31,
---------------------
1998 1999 2000
---------- --------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................... $ 9,274 $ 12,562 $ 20,882
Accounts receivable, less allowance for doubtful accounts of $24 as of
June 30, 1999 (none in 1998).......................................... 202 178 2,923
Inventories............................................................. 1,151 751 3,554
Other current assets.................................................... 31 99 367
---------- --------- ------------
Total current assets....................................................... 10,658 13,590 27,726

Property and equipment, net................................................ 2,411 2,713 3,424

Other assets, net.......................................................... 293 301 284
---------- --------- ------------
Total assets............................................................... $ 13,362 $ 16,604 $ 31,434
========== ========= ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................................ $ 380 $ 531 $ 3,361
Accrued compensation.................................................... 401 627 983
Other accrued liabilities............................................... 579 164 180
Deferred income......................................................... 89 89 89
Current portion of capital lease obligations............................ 821 461 589
---------- --------- ------------
Total current liabilities.................................................. 2,270 1,872 5,202
Deferred income............................................................ 199 357 616
Long-term portion of capital lease obligations............................. 440 456 1,239

Commitments

Stockholders' equity:
Preferred stock, $0.001 par value; 27,000,000 shares authorized,
issuable in series:...................................................
Series E-1 convertible preferred stock; 426,250 shares designated,
issued and outstanding.............................................. 1,705 1,705 1,705
Series E-2 convertible preferred stock; 866,401 shares designated,
866,398 shares issued and outstanding............................... 6,006 6,006 6,006
Series E-3 convertible preferred stock; 1,008,353 shares designated,
991,423 shares issued and outstanding............................... 8,182 8,182 8,182
Series E-4 convertible preferred stock; 1,250,405 shares designated,
1,246,464 shares issued and outstanding............................. 14,196 14,196 14,196
Series E-5 convertible preferred stock; 2,487,934 shares designated,
2,481,677 shares issued and outstanding............................. 14,843 14,843 14,843
Series E-6 convertible preferred stock; 3,652,344 shares designated,
3,456,391 shares issued and outstanding............................. -- 20,714 20,714
Series E-7 convertible preferred stock; 2,549,246 shares designated,
2,449,636 shares issued and outstanding............................. -- -- 25,241
Common stock, $0.001 par value; 50,000,000 shares authorized, 314,583
shares and 306,037 shares issued and outstanding at June 30, 1999
and 1998, respectively.............................................. 151 161 5,096
Deferred stock compensation............................................. -- -- (3,380)
Accumulated deficit..................................................... (34,630) (51,888) (68,226)
---------- --------- ------------
Total stockholders' equity................................................. 10,453 13,919 24,377
---------- --------- ------------
$ 13,362 $ 16,604 $ 31,434
========== ========= ============
</TABLE>

F-9
<PAGE>

ENDGATE CORPORATION

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

NINE MONTHS ENDED
YEARS ENDED JUNE 30, MARCH 31,
---------------------------------------- --------------------------
1997 1998 1999 1999 2000
----------- ------------- ------------ ------------ ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Product revenues....................... $ 1,133 $ 1,560 $ 1,084 $ 875 $ 2,384
Development fees....................... 239 373 519 458 2,689
----------- ------------- ------------ ------------ ------------
Total revenues............................ 1,372 1,933 1,603 1,333 5,073

Costs and expenses:
Cost of product revenues............... 3,957 4,230 5,836 4,500 9,011
Research and development............... 6,236 6,128 9,824 7,265 8,133
Sales and marketing.................... 474 489 751 531 904
General and administrative............. 1,303 1,528 1,843 1,218 1,548
Amortization of deferred stock
compensation......................... -- -- -- -- 1,191
----------- ------------- ------------ ------------ ------------
Total costs and expenses............... 11,970 12,375 18,254 13,514 20,787
----------- ------------- ------------ ------------ ------------

Loss from operations...................... (10,598) (10,442) (16,651) (12,181) (15,714)
Interest income (expense)
and other, net......................... 300 (133) (607) (582) (624)
----------- ------------- ------------ ------------ ------------
Net loss.................................. $ (10,298) $ (10,575) $ (17,258) $ (12,763) $ (16,338)
=========== ============= ============ ============ ============
</TABLE>

F-10
<PAGE>
ENDGATE CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCK
----------------------------------------
SERIES SERIES SERIES
E-1 E-2 E-3
---------- -------- ----------
<S> <C> <C> <C>
Balance at June 30, 1996 .............................. $ 1,705 $ 6,006 $ 8,182
Issuance costs associated with Series D convertible ... -- -- --
preferred stock
Issuance of 3,273 shares of common stock upon
exercise of stock option ........................... -- -- --
Net loss and comprehensive loss ....................... -- -- --
---------- -------- ----------
Balance at June 30, 1997 .............................. 1,705 6,006 8,182
Issuance of Series E-5 preferred stock for cash at
$6.00 per share, net of issuance costs of $48 in
March and April 1998................................ -- -- --
Conversion of notes payable and related accrued
interest to Series E-5 preferred stock at $6.00
per share in March and April 1998 .................. -- -- --
Issuance of 86,380 shares of Series E-5 preferred
stock upon exercise of warrants at $6.00 per
share in March 1998 ................................ -- -- --
Issuance of 4,459 shares of common stock upon
exercise of stock options .......................... -- -- --
Net loss and comprehensive loss ....................... -- -- --
---------- -------- ----------
Balance at June 30, 1998 .............................. 1,705 6,006 8,182
Issuance of 2,603,229 shares of Series E-6
preferred stock for cash at $6.004 per share,
net of issuance costs of $557 in April 1999
Issuance of warrants to purchase 170,621 shares of
Series E-6 preferred stock in connection with
issuance of convertible subordinated promissory..... -- -- --
notes .............................................. -- -- --
Conversion of convertible subordinated promissory
notes and related accrued interest to 853,162
shares of Series E-6 preferred stock at $6.004
per share in April and June 1999 ................... -- -- --
Issuance of 8,546 shares of common stock upon
exercise of stock options .......................... -- -- --
Net loss and comprehensive loss ....................... -- -- --
---------- -------- ----------
Balance at June 30, 1999 .............................. 1,705 6,006 8,182
Issuance of 1,951,612 shares of Series E-7
preferred stock for cash at $10.12 per share,
net of issuance costs of $59 in March 2000
(unaudited)......................................... -- -- --
Issuance of warrants to purchase 99,595 shares of
Series E-7 preferred stock in connection with issuance
of convertible subordinated promissory notes
(unaudited) ....................................... -- -- --
Conversion of convertible subordinated promissory
notes and related accrued interest to 498,024
shares of Series E-7 preferred stock at $10.12
per share in March 2000 (unaudited) ................ -- -- --
Issuance of 318,874 shares of common stock upon
exercise of stock options (unaudited) .............. -- -- --
Deferred stock compensation (unaudited) ............... -- -- --
Amortization of deferred stock compensation
(unaudited) ........................................ -- -- --
Net loss and comprehensive loss (unaudited) ........... -- -- --
---------- -------- ----------
Balance at March 31, 2000 (unaudited) ................. $ 1,705 $ 6,006 $ 8,182
========== ======== ==========
</TABLE>

<TABLE>
<CAPTION>
CONVERTIBLE PREFERRED STOCK
-------------------------------------------------------
SERIES SERIES SERIES SERIES
E-4 E-5 E-6 E-7
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Balance at June 30, 1996 .............................. $ 14,199 $-- $
Issuance costs associated with Series D convertible
preferred stock..................................... (3) -- --
Issuance of 3,273 shares of common stock upon
exercise of stock option ........................... -- -- --
Net loss and comprehensive loss ....................... -- -- --
---------- -------- ---------- ----------
Balance at June 30, 1997 .............................. 14,196 -- --
Issuance of Series E-5 preferred stock for cash at
$6.00 per share, net of issuance costs of $48 in
March and April 1998................................ -- 11,733 --
Conversion of notes payable and related accrued
interest to Series E-5 preferred stock at $6.00
per share in March and April 1998 .................. -- 2,591 --
Issuance of 86,380 shares of Series E-5 preferred
stock upon exercise of warrants at $6.00 per
share in March 1998 ................................ -- 519 --
Issuance of 4,459 shares of common stock upon
exercise of stock options .......................... -- -- --
Net loss and comprehensive loss ....................... -- -- --
---------- -------- ---------- ----------
Balance at June 30, 1998 .............................. 14,196 14,843 --
Issuance of 2,603,229 shares of Series E-6
preferred stock for cash at $6.004 per share,
net of issuance costs of $557 in April 1999
Issuance of warrants to purchase 170,621 shares of
Series E-6 preferred stock in connection with
issuance of convertible subordinated promissory..... -- -- 15,074
notes .............................................. -- -- 519
Conversion of convertible subordinated promissory
notes and related accrued interest to 853,162
shares of Series E-6 preferred stock at $6.004
per share in April and June 1999 ................... -- -- 5,121
Issuance of 8,546 shares of common stock upon
exercise of stock options .......................... -- -- --
Net loss and comprehensive loss ....................... -- -- --
---------- -------- ---------- ----------
Balance at June 30, 1999 .............................. 14,196 14,843 20,714
Issuance of 1,951,612 shares of Series E-7
preferred stock for cash at $10.12 per share,
net of issuance costs of $59 in March 2000
(unaudited)......................................... -- -- -- 19,691
Issuance of warrants to purchase 99,595 shares of
Series E-7 preferred stock in
connection with issuance of convertible subordinated
promissory notes (unaudited) ....................... -- -- -- 510
Conversion of convertible subordinated promissory
notes and related accrued interest to 498,024
shares of Series E-7 preferred stock at $10.12
per share in March 2000 (unaudited) ................ -- -- -- 5,040
Issuance of 318,874 shares of common stock upon
exercise of stock options (unaudited) .............. -- -- -- --
Deferred stock compensation (unaudited) ............... -- -- -- --
Amortization of deferred stock compensation
(unaudited) ........................................ -- -- -- --
Net loss and comprehensive loss (unaudited) ........... -- -- -- --
---------- ---------- ---------- ----------
Balance at March 31, 2000 (unaudited) ................. $ 14,196 $ 14,843 $ 20,714 $ 25,241
========== ========= ========== ===========
</TABLE>

TOTAL
COMMON DEFERRED STOCK ACCUMULATED STOCKHOLDERS'
STOCK COMPENSATION DEFICIT EQUITY
-------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Balance at June 30, 1996 .............................. $ 139 -- $(13,757) $ 16,474
Issuance costs associated with Series D convertible
preferred stock..................................... -- -- -- (3)
Issuance of 3,273 shares of common stock upon
exercise of stock option ........................... 4 -- -- 4
Net loss and comprehensive loss ....................... -- -- (10,298) (10,298)
-------- -------------- ----------- -------------
Balance at June 30, 1997 .............................. 143 -- (24,055) 6,177
Issuance of Series E-5 preferred stock for cash at
$6.00 per share, net of issuance costs of $48 in
March and April 1998................................ -- -- -- 11,733
Conversion of notes payable and related accrued
interest to Series E-5 preferred stock at $6.00
per share in March and April 1998 .................. -- -- -- 2,591
Issuance of 86,380 shares of Series E-5 preferred
stock upon exercise of warrants at $6.00 per
share in March 1998 ................................ -- -- -- 519
Issuance of 4,459 shares of common stock upon
exercise of stock options .......................... -- -- -- 8
Net loss and comprehensive loss ....................... -- -- (10,575) (10,575)
-------- -------------- ----------- -------------
Balance at June 30, 1998 .............................. 151 -- (34,630) 10,453
Issuance of 2,603,229 shares of Series E-6
preferred stock for cash at $6.004 per share,
net of issuance costs of $557 in April 1999......... -- -- -- 15,074
Issuance of warrants to purchase 170,621 shares of
Series E-6 preferred stock in connection with
issuance of convertible subordinated promissory
notes .............................................. -- -- -- 519
Conversion of convertible subordinated promissory
notes and related accrued interest to 853,162
shares of Series E-6 preferred stock at $6.004
per share in April and June 1999 ................... -- -- -- 5,121
Issuance of 8,546 shares of common stock upon
exercise of stock options .......................... 10 -- -- 10
Net loss and comprehensive loss ....................... -- -- (17,258) (17,258)
-------- -------------- ----------- -------------
Balance at June 30, 1999 .............................. 161 -- (51,888) 13,919
Issuance of 1,951,612 shares of Series E-7
preferred stock for cash at $10.12 per share,
net of issuance costs of $59 in March 2000
(unaudited)........................................ -- -- -- 19,691
Issuance of warrants to purchase 99,595 shares of
Series E-7 preferred stock in
connection with issuance of convertible subordinated
promissory notes (unaudited) ...................... -- -- -- 510
Conversion of convertible subordinated promissory
notes and related accrued interest to 498,024
shares of Series E-7 preferred stock at $10.12
per share in March 2000 (unaudited) ................ -- -- -- 5,040
Issuance of 318,874 shares of common stock upon
exercise of stock options (unaudited) .............. 364 -- -- 364
Deferred stock compensation (unaudited) ............... 4,571 (4,571) -- --
Amortization of deferred stock compensation
(unaudited) ........................................ -- 1,191 -- 1,191
Net loss and comprehensive loss (unaudited) ........... -- -- (16,338) (16,338)
-------- -------------- ----------- -------------
Balance at March 31, 2000 (unaudited) ................. $ 5,096 $ (3,380) $(68,226) $ 24,377
======== ============= =========== =============
</TABLE>

F-11

<PAGE>

ENDGATE CORPORATION

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED JUNE 30, MARCH 31,
------------------------------------ -----------------------
1997 1998 1999 1999 2000
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.......................................... $ (10,298) $ (10,575) $ (17,258) $ (12,763) $ (16,338)
Adjustments to reconcile net loss to net cash
used by operations:
Depreciation and amortization.................. 1,409 1,253 1,311 876 747
Amortization of deferred stock compensation.... -- -- -- -- 1,191
Warrants issued in connection with issuance of
convertible promissory notes................. -- -- 519 519 510
Changes in operating assets and liabilities:
Accounts receivable.......................... 322 (82) 24 18 (2,745)
Inventories.................................. (55) (502) 400 378 (2,803)
Other assets................................. (33) (111) (179) (124) (251)
Accounts payable............................. (50) 172 151 220 2,830
Accrued compensation......................... (143) 164 226 8 356
Other accrued liabilities.................... 60 359 (415) (432) 16
Deferred revenues............................ -- 288 158 180 259
----------- ----------- ----------- ----------- -----------
Net cash used in operating activities............. (8,788) (9,034) (15,063) (11,120) (16,228)
----------- ----------- ----------- ----------- -----------

INVESTING ACTIVITIES
Purchase of property and equipment................ (411) (766) (1,510) (704) (98)
Purchases of short-term investments............... (7,856) -- -- -- --
Maturities of short-term investments.............. 7,856 -- -- -- --
Note receivable................................... (84) 391 -- -- --
----------- ----------- ----------- ----------- -----------
Net cash used in investing activities............. (495) (375) (1,510) (704) (98)
----------- ----------- ----------- ----------- -----------

FINANCING ACTIVITIES
Net proceeds from issuance of preferred stock,
convertible notes payable and warrants......... (3) 14,843 20,195 4,977 24,731
Proceeds from issuance of common stock............ 4 8 10 5 364
Payments under capital lease obligations.......... (1,465) (693) (344) (745) (449)
----------- ----------- ----------- ----------- -----------
Net cash provided by (used in) financing (1,464) 14,158 19,861 4,237 24,646
activities.....................................
----------- ----------- ----------- ----------- -----------

Net change in cash and cash equivalents........... (10,747) 4,749 3,288 (7,587) 8,320
Cash and cash equivalents at the beginning of the
period......................................... 15,272 4,525 9,274 9,274 12,562
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at the end of the period $ 4,525 $ 9,274 $ 12,562 $ 1,687 $ 20,882
=========== =========== =========== =========== ===========

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest on bank borrowings......... $ -- $ (3) $ -- $ -- $ --
=========== =========== =========== =========== ===========

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING
ACTIVITIES
Equipment acquired under capital lease
arrangements................................... $ 660 $ 494 $ -- $ 610 $ 1,360
=========== =========== =========== =========== ===========
Conversion of notes payable and accrued interest
to preferred stock............................. $ -- $ 2,591 $ 5,121 $ -- $ 5,040
=========== =========== =========== =========== ===========
</TABLE>

F-12
<PAGE>

ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

Endgate Corporation ("Endgate" or the "Company") is a provider of radio
frequency, or RF, subsystems that enable the transmission and reception of data
signals in high data rate, or broadband, wireless systems.

At June 30, 1999, Endgate has recorded an accumulated deficit of
$51,888,000. The Company anticipates additional debt or equity financing may be
needed to finance ongoing operations in the fiscal year ending June 30, 2000. If
such additional funding is not available, management believes, based on
anticipated obligations, that available resources will be sufficient to enable
Endgate to meet its obligations through at least June 30, 2000. If anticipated
operations are not achieved, management has the intent and believes it has the
ability to delay or reduce expenditures so as not to require additional
financial resources if such resources were not available.

Effective March 31, 2000, Endgate's board of directors approved a
one-for-two reverse split of the outstanding shares of all classes of preferred
stock and common stock. Effective June 6, 2000, the board of directors of
Endwave approved a further one-for-two reverse split of the then outstanding
shares of all classes of preferred stock and common stock. All share and per
share data have been restated to reflect these splits.

On March 31, 2000 TRW Milliwave merged with Endgate Corporation. In the
merger, Milliwave merged into Endgate and received approximately 52% of the
merged company's capital stock in exchange for TRW's shares in Milliwave. As a
result, Endgate was the surviving corporation in the merger and TRW Milliwave
ceased to exist as a separate legal entity. However, because TRW owned more than
half of Endgate's outstanding capital stock after the merger, TRW Milliwave is
treated as the acquiring company for accounting purposes. As a result, Endgate
ceased to be a separate accounting entity as of the date of the merger, and the
combined company's historical financial statements are those of Milliwave. In
connection with the merger, Endgate issued TRW 13,963,063 shares of Series T-1
preferred stock which has not been reflected in these financial statements.
These financial statements present the financial position and results of
operations of Endgate, the acquired business, immediately prior to the
consummation of the merger with TRW Milliwave.

UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying financial statements and related notes as of March 31,
2000, and for the nine months ended March 31, 1999 and 2000, are unaudited, but
include all adjustments, consisting only of normal recurring adjustments, that
management considers necessary for a fair presentation of its financial
position, operating results, and cash flows for the interim date and periods
presented. Results for the nine-month period ended March 31, 2000 are not
necessarily indicative of results to be expected for the full fiscal year of
2000 or for any future period.

REVENUE RECOGNITION AND WARRANTY

The Company recognizes product revenue at the time of product shipment
and provides for estimated warranty expense at the time of sale. The Company's
customers are primarily wireless systems integrators and equipment manufacturers
and Endgate's products are integrated into the products of its customers. There
are no significant customer acceptance requirements or post-shipment obligations
on the part of Endgate. The Company recognizes development fees from

F-13
<PAGE>
ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

Development agreements are recognized ratably over the estimated term of the
development period. Up front fees, if any, associated with development
agreements are recognized over the estimated development and production period.
In no event are revenues recognized prior to becoming payable by the customer.
The costs incurred under these agreements are included in research and
development expenses.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The Company considers all highly-liquid investments purchased with a
maturity from the date of purchase of three months or less to be cash
equivalents; investments with maturities between three and twelve months are
considered to be short-term investments.

The Company invests its excess cash primarily in demand deposit and money
market accounts with United States banks and in short-term investments. These
securities, consisting of treasury bills, government notes, commercial paper and
money market funds, typically mature or are redeemable within six months and
bear minimal risk. The Company has not experienced any significant loss on the
investments. Excess cash at June 30, 1999 is held in a money market account with
a single California bank.

CONCENTRATION OF CREDIT RISK

The Company sells its products primarily to major telecommunications
equipment manufacturers. The Company performs ongoing credit evaluations of its
customers and generally does not require collateral. The Company maintains
reserves for potential credit losses and such losses have been immaterial and
within management's expectations.

Product revenue in fiscal 1999 is related to two major customers that
make up 42% and 38% of total revenues. Product revenue in fiscal 1997 and 1998
substantially related to a single major customer.

F-14
<PAGE>
ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

INVENTORIES

Inventories are stated at the lower of cost or market (on a first-in,
first-out basis) and are comprised of the following (in thousands):

JUNE 30,
------------------------- MARCH 31,
1998 1999 2000
----------- ------------ ------------
(unaudited)

Raw materials.................... $ 807 $ 652 $ 3,125
Work in process.................. 300 50 366
Finished goods................... 44 49 63
----------- ------------ ------------
----------- ------------ ------------
$ 1,151 $ 751 $ 3,554
=========== ============ ============

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation is provided for
using the straight-line method over the estimated useful lives of the assets,
which range from three to five years. Equipment with an aggregate cost of
$2,722,000 and accumulated amortization of $1,472,000 on hand at June 30, 1999
is subject to capital lease arrangements ($3,536,000 and $1,619,000 at June 30,
1998). The Company has the option to purchase the assets under these leases at
the conclusion of the lease term at a stated price.

Property and equipment consists of the following (in thousands):

JUNE 30,
------------------------ MARCH 31,
1998 1999 2000
----------- ----------- -----------
(UNAUDITED)

Laboratory and demonstration
equipment..................... $ 4,791 $ 5,882 $ 6,997
Software............................... 475 600 732
Computer equipment..................... 632 835 867
Furniture and fixtures................. 145 224 355
Leasehold improvements................. 194 206 254
----------- ----------- -----------
----------- ----------- -----------
6,237 7,747 9,205

Less accumulated depreciation and
amortization (including amortization
of assets held under capital lease)..... (3,826) (5,034) (5,781)
----------- ----------- -----------
Property and equipment, net................ $ 2,411 $ 2,713 $ 3,424
=========== =========== ===========

INTANGIBLE ASSETS

Included in Endgate's other assets are patent and license costs totaling
$407,000 and $308,000 as of June 30, 1999 and 1998. The cost of acquiring the
assets and certain transaction costs have been recorded on the balance sheet and
are being amortized on a straight-line basis over

F-15
<PAGE>
ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

a period of five years. Accumulated amortization on the patents and licenses
totaled $148,000 and $45,000 as of June 30, 1999 and 1998.

STOCK-BASED COMPENSATION

As described in Note 4, the Company has elected to account for stock
option grants to employees and directors in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and, to adopt the
disclosure-only provisions as permitted under Financial Accounting Standards
Board's Statement No. 123, "Accounting for Stock-Based Compensation" ("FAS
123").

COMPREHENSIVE INCOME

As of July 1, 1998, Endgate adopted the Financial Accounting Standards
Board's Statement No. 130, "Reporting Comprehensive Income" ("FAS 130"), which
requires the reporting and presentation of comprehensive income (loss) and its
components in the financial statements. Comprehensive loss is the same as net
loss for all the periods presented as there are no adjustments reported in
stockholders' equity which are to be included in the computation. Accordingly,
the adoption of FAS 130 had no material impact on Endgate's results of
operations, cash flows, or financial position.

SEGMENTS OF AN ENTERPRISE

The Company has adopted Financial Accounting Standards Board's Statement
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("FAS 131"). FAS 131 superseded Statement of Financial Accounting Standards No.
14, "Financial Reporting for Segments of a Business Enterprise." FAS 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. FAS 131 also establishes standards for related
disclosures about products and services, geographic areas and major customers.
As Endgate operates in one business segment, the adoption of FAS 131 did not
affect Endgate's results of operations or financial position.

In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("FAS
133"), which is required to be adopted for the year ending June 30, 2001. The
Company has not, in the past, and does not anticipate in the future, using
derivative instruments nor does it anticipate that the adoption of FAS 133 will
have any material impact on results of operations, cash flows, or the financial
position of the Company.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, which
provides guidance on the recognition, presentation and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. In connection with the initial public
offering, the Company modified its revenue recognition policy to conform to SAB
101. The Company believes that its revenue recognition policy is in compliance
with the provisions of SAB 101.

F-16
<PAGE>
ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

2. DEVELOPMENT FEES

In fiscal 1998, Endgate entered into a development and production
agreement with a major customer for development and production of a new radio
product. In fiscal 1999, the agreement was amended to include additional
products. Under this agreement, as amended, the customer will provide funding of
Endgate's development costs for this product up to a maximum of $3,500,000. The
Company recorded $670,000 and $400,000 under this agreement during the years
ended June 30, 1999 and 1998. Costs incurred under this contract are included in
research and development expenses and amounted to approximately $1,020,000 and
$286,000 in the years ended June 30, 1999 and 1998.

3. CONVERTIBLE SUBORDINATED PROMISSORY NOTES

In February 1999, Endgate borrowed approximately $5,034,000 in the form
of convertible subordinated promissory notes issued to investors. The notes bore
interest at a rate of 10% per annum and were due on the earlier of (i) March 31,
1999, or (ii) on the date of the closing of a preferred stock financing of at
least $10,000,000 and wherein shares are issued to at least one new investor
having no prior investment in Endgate, which may include the cancelation of the
note. The notes were converted, along with all accrued interest, into 853,162
shares of Endgate's Series E-6 preferred stock in April 1999. In conjunction
with the convertible subordinated promissory notes, Endgate also issued the
investors warrants to purchase 170,621 shares of Endgate's Series E-6 preferred
stock. The fair value of the warrants was calculated to be $519,000 using the
Black-Scholes valuation method and was expensed in full during fiscal year 1999.

In January 2000, Endgate borrowed approximately $5,000,000 in the form of
convertible subordinated promissory notes issued to investors. The notes bore
interest at a rate 10% per annum and were due within 128 days or on the date of
the closing of a preferred stock financing of at least $10,000,000. The notes
were converted, along with all accrued interest, into 498,024 shares of
Endgate's Series E-7 preferred stock in March 2000. In conjunction with the
convertible subordinated promissory notes, Endgate also issued the investors
warrants to purchase 99,595 shares of Endgate's Series E-7 preferred stock. The
fair value of the warrants was calculated to be $510,000 using the Black-Scholes
valuation method and was expensed in full during the nine-month period ended
March 31, 2000.

4. STOCKHOLDERS' EQUITY

CONVERTIBLE PREFERRED STOCK

At June 30, 1999, Endgate has issued and outstanding 426,250, 866,398,
991,423, 1,246,464, 2,481,677, and 3,456,391 shares of Series E-1, E-2, E-3,
E-4, E-5, and E-6 preferred stock. Each share of preferred stock is convertible
into common stock on a one-for-one basis, subject to certain antidilution
provisions. In conjunction with the Series E-6 preferred stock issuance, the
conversion rates for Series E-3 and E-4 preferred stock were adjusted under
these antidilution provisions such that each share of preferred stock will
convert to 1.45 and 1.81 shares of common stock. The Series E-1, E-2, E-3, E-4,
and E-5 preferred stock will automatically convert into common stock upon the
consummation of an underwritten public offering under the Securities Act of 1933
of Endgate's common stock in which the sales price to the public is not less
than $9.00 per share and from which the gross proceeds to the company is not
less than $10,000,000,

F-17
<PAGE>
ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

or upon election of a majority of the Series E-1, E-2, E-3, E-4 and E-5
preferred shares outstanding voting together as a single class.

The Series F preferred stock will automatically convert into common stock
upon the consummation of an underwritten public offering under the Securities
Act of 1933 of Endgate's common stock in which the sales price to the public is
not less than $6.004 per share and in which the aggregate offering price is not
less than $15,000,000, or upon election of two thirds of the Series E-6
preferred shares outstanding.

The holders of preferred stock have the right to receive dividends as and
if declared by the directors at a dividend rate set by the directors when
declared. No dividends have been declared as of June 30, 1999.

Upon liquidation and before any distribution or payment shall be made to
Series E-1, E-2, E-3, E-4 and E-5 preferred stockholders, the Series E-6
preferred stockholders are entitled to receive a distribution of:

o $8.70 per share (subject to adjustment for a recapitalization) plus
all declared but unpaid dividends if the valuation of such
liquidation is less than $111,000,000 or

o $6.004 per share (subject to adjustment for a recapitalization) plus
all declared but unpaid dividends of the valuation if such
liquidation is more than $111,000,000.

The Series E-1, E-2, E-3, E-4 and E-5 preferred stockholders are entitled
to receive, upon liquidation, a distribution of $4.00, $7.00, $8.28, $11.44, and
$6.00 per share (subject to adjustment for a recapitalization) plus all declared
but unpaid dividends. To the extent that remaining assets are available upon
liquidation, common stockholders will then receive a distribution equal to $4.00
per share. Any remaining assets shall be divided pro rata among the holders of
common and preferred stock on an as-converted basis. The preferred stockholders
participate in the voting rights of Endgate as if their shares were converted
into common stock using the conversion rate in effect at the record date.

In March 2000, Endgate issued and sold 2,449,636 shares of Series E-7
preferred stock at $10.12 per share for cash and forgiveness of the
then-existing subordinated notes.

COMMON STOCK

Under a stock purchase agreement executed by employee stockholders,
common stock purchased by employees for cash is subject to a repurchase option
by Endgate upon termination of the purchaser's employment. The repurchase right
lapses ratably over a four-year period. At June 30, 1999, 4,687 shares of common
stock issued upon early exercise of options (9,375 shares at June 30, 1998) were
subject to repurchase in the event of termination of employment.

Included in Endgate's capitalization are shares of common stock reserved
for issuance upon the conversion of preferred stock and warrants and the
exercise of stock options.

F-18
<PAGE>
ENDGATE CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

1992 STOCK OPTION PLAN

The Company's 1992 Stock Option Plan (the "Plan") was adopted in
September 1992, amended in April 1999, and provides for the issuance of options
for up to 1,318,750 shares of common stock to directors, employees, and
consultants.

Under the Plan, options may be granted by the board of directors to
employees, directors and consultants. Options granted may be either incentive
stock options or nonstatutory stock options. Incentive stock options under the
plan are at exercise prices not less than fair value and nonstatutory stock
options cannot be at an exercise price less than 85% of the fair value on the
date of grant, as determined by the board of directors. The term of the plan is
10 years. Options become exercisable over a term of exercise as specified in
each option agreement. Subject to approval by the board of directors, options
may be exercised early, however, unvested options are subject to a repurchase
option by Endgate upon termination of the purchaser's employment or services.

A summary of stock option activity is as follows:
<TABLE>

OUTSTANDING STOCK OPTIONS
----------------------------------------------------------------
NUMBER OF SHARES EXERCISE PRICE WEIGHTED-AVERAGE
EXERCISE PRICE
-------------------- ------------------- ---------------------

<S> <C> <C> <C>
Balance at June 30, 1996........................ 164,469 $0.40-$2.40 $0.84
Options granted.............................. 119,875 $4.24 $4.24
Options exercised............................ (3,273) $0.70-$4.24 $1.16
Options canceled............................. (26,391) $0.70-$4.24 $2.48
-------------------- ------------------- ---------------------
Balance at June 30, 1997........................ 254,680 $0.40-$4.24 $1.50
Options granted.............................. 841,575 $1.20-$4.24 $1.48
Options exercised............................ (4,459) $0.70-$4.24 $1.68
Options canceled............................. (192,751) $0.70-$4.24 $4.00
-------------------- ------------------- ---------------------
Balance at June 30, 1998........................ 899,045 $0.40-$4.24 $1.36
Options granted.............................. 75,750 $1.20 $1.20
Options exercised............................ (8,545) $0.70-$1.20 $1.08
Options canceled............................. (25,672) $1.20 $1.20
-------------------- ------------------- ---------------------
Balance at June 30, 1999........................ 940,578 $0.40-$4.24 $1.36
Options granted (unaudited).................. 946,320 $1.20--$6.00 $2.23
Options exercised (unaudited)................ (318,874) $0.40--$4.24 $1.18
Options canceled (unaudited)................. (60,669) $1.20--$4.00 $1.29
-------------------- ------------------- ---------------------
Balance at March 31, 2000 (unaudited)........... 1,507,355 $0.40--$6.00 $1.94
==================== =================== =====================
</TABLE>

F-19

<PAGE>

ENDGATE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

The following table summarizes information concerning outstanding and
exercisable options:

OPTIONS OUTSTANDING AT JUNE 30, OPTIONS EXERCISABLE AT JUNE 30,
1999 1999
-------------------------------- WEIGHTED-AVERAGE ---------------------------------
EXERCISE PRICE PER SHARES WEIGHTED-AVERAGE REMAINING SHARES WEIGHTED-AVERAGE
SHARE EXERCISE PRICE CONTRACTUAL LIFE EXERCISE PRICE
------------------------ ------------ ------------------ ------------------ ------------ -------------------
(IN YEARS)
<S> <C> <C> <C> <C> <C> <C>
$0.04 9,016 $0.04 4.02 9,016 $0.01
$0.70 21,063 $0.70 5.24 21,188 $0.175
$1.20 884,312 $1.20 7.61 391,125 $0.3
$2.40 25,250 $2.40 6.88 18,937 $0.6
$6.40 937 $4.24 1.30 312 $1.06
------------ ------------
940,578 440,578
============ ============
</TABLE>

The weighted-average per share fair value of options granted in 1999 and
1998 was $0.24 and $0.40.

Future pro forma net income and earnings/loss per share results may be
materially different from actual amounts presented. The value of each option was
estimated at the date of grant using the minimum value method with the following
weighted-average assumptions: no dividends, an expected life of four years, and
a risk-free interest rate of 5.0% and 6.0% for the years ended June 30, 1999 and
1998.

For the purpose of pro forma disclosures, the estimated fair value of the
above awards is amortized to expense over the awards' periods. The Company's pro
forma net loss for the year ended June 30, 1999 is $(17,207,000). The effect of
applying FAS 123 to Endgate's stock option awards did not result in pro forma
net loss that was materially different from amounts reported at June 30, 1998.

As of June 30, 1999, 1,200,380 shares of common stock are available for
future grants under the Plan.

In April 1998, the board of directors voted on and approved a repricing
of certain stock options. The Company repriced options as an incentive plan in
order to retain key employees. The Company repriced options to adjust the fair
value of exercise prices for certain options granted in prior years based on the
pricing of the Series E-5 preferred stock issuance in March 1998. In April 1998,
options outstanding at $4.24 were repriced to $1.20.

DEFERRED STOCK COMPENSATION

In connection with the grant of stock options to employees for the nine
month period ended March 31, 2000, the Company recorded deferred stock
compensation within stockholders' equity of approximately $4,571,000,
representing the difference between the deemed fair value of the Common Stock
for financial statement presentation purposes and the option exercise price of
these options at the date of grant. During the nine months ended March 31, 2000
we amortized $1,191,000 respectively, of this deferred stock compensation. We
will amortize the remaining

F-20
<PAGE>

ENDGATE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

deferred stock compensation using the accelerated method, over the vesting
period of the related options, generally four years.

STOCK WARRANTS

In September 1994, in connection with a new lease line, Endgate issued to
the lessor warrants to purchase 4,285 shares of Series E-2 preferred stock at an
exercise price of $8.85 per share, on or before September 30, 1999. The warrants
are subject to acceleration upon the occurrence of certain events. The Company
has reserved 57,143 shares of Series E-2 preferred stock for issuance under the
stock warrants.

In November 1995, in connection with a new lease line, Endgate issued to
the lessor warrants to purchase 16,924 shares of Series E-3 preferred stock at
an exercise price of $15.00 per share, on or before November 15, 2000. The
warrants are subject to acceleration upon the occurrence of certain events. The
Company has reserved 16,924 shares of Series E-3 preferred stock for issuance
under the stock warrants.

In September 1997, in conjunction with a lease line agreement, Endgate
issued warrants to a leasing company to purchase 3,936 shares of Endgate's
Series E-4 preferred stock with an exercise price of $21.20 per share. The
warrants are exercisable at any time for five years from the date of grant, or
upon the closing of a public offering by Endgate's common stock. The Company has
reserved 3,936 shares of Series E-4 preferred stock for issuance under stock
warrants.

In October 1997, in conjunction with the secured promissory notes issued
to investors, Endgate issued warrants to purchase 86,380 shares of preferred
stock in Endgate's Series E-5 preferred stock financing. The warrants were
exercisable at any time for five years from the date of issuance, or upon the
closing of a public offering of Endgate's common stock in excess of $10,000,000
or upon the election of a majority of the preferred shares outstanding, if
earlier. In March 1998, all of these warrants were exercised for $6.00 per
share.

In March 1998, in conjunction with a loan agreement with a bank, Endgate
issued to the bank warrants to purchase 6,250 shares of Series E-5 preferred
stock at an exercise price of $6.00 per share. The warrants are exercisable at
any time for five years from the date of issuance, or upon the closing of a
public offering of Endgate's common stock in excess of $7,500,000. The Company
has reserved 6,250 shares of Series E-5 preferred stock for issuance under stock
warrants.

In April 1999, in conjunction with the issuance of Series E-6 preferred
stock, Endgate issued warrants to the underwriter to purchase 25,316 shares of
Series E-6 preferred stock at an exercise price of $6.004 per share, on or
before February 2004. The Company has reserved 25,316 shares of Series E-6
preferred stock for issuance under the stock warrants.

5. LEASES AND COMMITMENTS

The Company leases its office and design facilities, as well as certain
equipment under operating leases. Rent expense was approximately $270,000,
$532,000 and $649,000 for the years ended June 30, 1997, 1998 and 1999. In
addition, Endgate received rental income of approximately $172,000 for the year
ended June 30, 1999 ($83,000 in 1998).

F-21
<PAGE>

ENDGATE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

Future minimum lease payments under operating and noncancelable capital
leases as of June 30, 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
------------- --------------
Years ending June 30,
----------------------------
<S> <C> <C>
2000....................................................................... $ 571 $ 564
2001....................................................................... 510 354
2002....................................................................... 410 106
2003....................................................................... -- 15
2004....................................................................... -- 1
------------- --------------
Total minimum payments required............................................... $ 1,491 1,040
=============
Less: amount representing interest............................................ (123)
--------------
Present value of future minimum lease payments................................ 917
Less current portion.......................................................... (461)
--------------
Long-term portion............................................................. $ 456
==============
</TABLE>

6. INCOME TAXES

As of June 30, 1999, the Company had federal and state net operating loss
carryforwards of approximately $42,300,000 and $12,900,000, respectively. The
Company also had federal research and development tax credit carryforwards of
approximately $800,000. The net operating loss and credit carryforwards will
expire at various dates beginning on 2008 through 2019, if not utilized.

Utilization of the net operating loss and credit carryforwards may be
subject to a substantial annual limitation due to the ownership change
limitations provided by the Internal Revenue Code of 1986 and similar state
provisions. The annual limitation may result in the expiration of net operating
losses and credits before utilization.

F-22
<PAGE>

ENDGATE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 1997, 1998 AND 1999 AND THE NINE-MONTH PERIODS ENDED
MARCH 31, 1999 (UNAUDITED) AND 2000 (UNAUDITED)

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets for financial reporting and
the amount used for income tax purposes. Significant components of the Company's
deferred tax assets for federal and state income taxes are as follows (in
thousands):
<TABLE>
<CAPTION>

JUNE 30, 1998 JUNE 30, 1999

---------------- ----------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......................................... $ 11,300 $ 15,100
Research credit carryforwards............................................. 700 1,200
California manufacturing and research credit carryforwards................ 200 200
Capitalized research and development...................................... 1,100 3,100
Other..................................................................... 800 400
---------------- ----------------
Total deferred tax assets.................................................... 14,100 20,000
Valuation allowance for deferred tax asset................................... (14,100) (20,000)
---------------- ----------------
Deferred tax assets, net..................................................... $ -- $ --
================ ================
</TABLE>

Financial Accounting Standards Boards Statement No. 109 (FAS 109)
"Accounting for Income Taxes," provides for the recognition of deferred tax
assets if realization of such is more likely than not. Based upon the weight of
available evidence, which includes historical operating performance and the
reported cumulative net losses in all prior periods, the Company has provided a
full valuation allowance against its net deferred tax assets.

The valuation allowance increased by $4,500,000 during the year ended
June 30, 1998.

F-23

<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Management of TRW Inc.
and TRW Space & Electronics Group

We have audited the accompanying balance sheets of TRW Milliwave Inc. (a
wholly owned subsidiary of TRW Inc.) as of December 31, 1999 and 1998, and the
related statements of operations, changes in shareholder's equity, and cash
flows for the years then ended and the periods from October 1, 1997 through
December 31, 1997 and from January 1, 1997 through September 30, 1997 (the
Predecessor Period). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of TRW Milliwave Inc.
at December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended and the periods from October 1, 1997 through
December 31, 1997 and January 1, 1997 through September 30, 1997 (the
Predecessor Period) in conformity with accounting principles generally accepted
in the United States.

Los Angeles, California
June 1, 2000

F-24

<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------
1999 1998
------------ -----------
<S> <C> <C>
ASSETS
Current assets:

Cash.............................................................................. $ 373 $ 283
Accounts receivable, net of allowance for doubtful

accounts of $81 in 1999 and $816 in 1998........................................ 1,343 1,476
Accounts receivable from affiliates............................................... 1,981 --
Inventories, net of allowances.................................................... 4,666 2,381
Deferred income taxes............................................................. 637 719
Other current assets.............................................................. 137 45
------------ -----------
Total current assets................................................................. 9,137 4,904

Property, plant, and equipment, net of accumulated
depreciation...................................................................... 10,877 4,177
Costs in excess of net assets acquired, net of accumulated amortization of $3,456 in
1999 and $1,920 in 1998........................................................... 5,744 7,280
------------ -----------
Total assets......................................................................... $ 25,758 $ 16,361
============ ===========
LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities:

Bank overdraft.................................................................... $ 2,278 $ --
Accounts payable.................................................................. 1,429 1,377
Accounts payable to affiliates.................................................... 2,169 368
Accrued payroll liabilities....................................................... 391 298
Other accrued liabilities......................................................... 514 822
------------ -----------
Total current liabilities............................................................ 6,781 2,865

Deferred income taxes................................................................ 964 15

Commitments

Shareholder's equity:
Common stock, no par value:
Authorized shares--300,000.......................................................
Issued and outstanding shares--10................................................ -- --
Additional paid-in capital........................................................ 10,858 10,858
Advances from TRW Inc............................................................. 13,047 5,999
Accumulated deficit............................................................... (5,892) (3,376)
------------ -----------
Total shareholder's equity........................................................... 18,013 13,481
------------ -----------
Total liabilities and shareholder's equity........................................... $ 25,758 $ 16,361
============ ===========
</TABLE>

SEE ACCOMPANYING NOTES.

F-25
<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)

STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

PERIOD PREDECESSOR PERIOD
------------------- -------------------
FROM OCTOBER 1, PERIOD FROM JANUARY 1,
YEAR ENDED DECEMBER 31, 1997 THROUGH 1997 THROUGH
----------------------------- DECEMBER 31, SEPTEMBER 30,
1999 1998 1997 1997
------------- -------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Sales................................. $ 5,402 $ 6,057 $ 1,557 $ 3,693
Sales to affiliates.................... 7,017 973 -- --
------------- -------------- ------------------- -------------------
Total sales............................ 12,419 7,030 1,557 3,693

Cost of sales.......................... 11,221 5,992 1,276 3,074
------------- -------------- ------------------- -------------------
Gross profit........................... 1,198 1,038 281 619

Selling, general and administrative
expenses............................ 1,915 2,764 329 867
General and administrative expenses
allocated from TRW Inc.............. 455 200 26 --

Goodwill amortization expense......... 1,536 1,536 384 --
Research and development expense....... 326 286 66 188
------------- -------------- ------------------- -------------------
Loss before income taxes............... (3,034) (3,748) (524) (436)

Income tax benefit..................... 518 850 46 153
------------- -------------- ------------------- -------------------
Net loss............................... $ (2,516) $ (2,898) $ (478) $ (283)
============= ============== =================== ===================
Net loss per share..................... $ (251,600) $ (289,800) $ (47,800) $ (1.13)
============= ============== =================== ===================
Shares used to compute net loss per
share............................... 10 10 10 250,259
============= ============== =================== ===================

</TABLE>

SEE ACCOMPANYING NOTES.

F-26
<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)

STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

RETAINED
COMMON STOCK ADVANCES ADDITIONAL EARNINGS TOTAL
----------------- FROM PAID-IN (ACCUMULATED SHAREHOLDER'S
SHARES AMOUNT TRW INC. CAPITAL DEFICIT) EQUITY
-------- -------- ------------ ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Predecessor Period:
Balance at January 1, 1997........... 250,259 $ -- $ -- $ 1,181 $ 365 $ 1,546
Stock redemption................... -- -- -- (50) -- (50)
Net loss........................... -- -- -- -- (283) (283)
-------- -------- ------------ ----------- -------------- -------------
Balance at September 30, 250,259 $ -- $ -- $ 1,131 $ 82 $ 1,213
1997...............................
======== ======== ============ =========== ============== =============

Balance at October 1, 1997.............. -- $ -- $ -- $ -- $ -- $ --
Contributed capital at
acquisition........................ 10 -- -- 10,858 -- 10,858
Net transfers from TRW Inc........... -- -- 251 -- -- 251
Net loss............................. -- -- -- -- (478) (478)
-------- -------- ------------ ----------- -------------- -------------
Balance at December 31, 1997............ 10 -- 251 10,858 (478) 10,631
Net transfers from TRW Inc........... -- -- 5,748 -- -- 5,748
Net loss............................. -- -- -- -- (2,898) (2,898)
-------- -------- ------------ ----------- -------------- -------------
Balance at December 31, 1998............ 10 -- 5,999 10,858 (3,376) 13,481
Net transfers from TRW Inc........... -- -- 7,048 -- -- 7,048
Net loss............................. -- -- -- -- (2,516) (2,516)
-------- -------- ------------ ----------- -------------- -------------
Balance at December 31, 1999............ 10 $ -- $ 13,047 $ 10,858 $ (5,892) $ 18,013
======== ======== ============ =========== ============== =============
</TABLE>

SEE ACCOMPANYING NOTES.

F-27
<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR
PERIOD
-------------
PERIOD FROM PERIOD FROM
OCTOBER 1 JANUARY 1
YEAR ENDED DECEMBER 31, THROUGH THROUGH
----------------------- DECEMBER 31, SEPTEMBER 30,
1999 1998 1997 1997
-------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.................................. $ (2,516) $ (2,898) $ (478) $ (283)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation......................... 730 233 60 93
Goodwill amortization................ 1,536 1,536 384 --
Deferred taxes....................... 1,031 (660) -- (44)
Changes in operating assets and
liabilities:
Accounts receivable from outside
customers...................... 133 (795) (123) 208
Accounts receivable from /
payable to affiliates, net..... (180) -- -- --
Inventories...................... (2,285) (1,669) (78) (425)
Other assets..................... (92) 66 317 21
Bank overdraft................... 2,278 -- -- --
Accounts payable................. 52 1,136 44 158
Accrued liabilities.............. (215) 703 (315) 362
---------- ---------- ------------ -------------
Net cash provided by (used in) operating
activities............................. 472 (2,348) (189) 90

INVESTING ACTIVITIES
Purchase of Milliwave Technologies, net of
cash acquired ......................... -- -- (10,558) --
---------- ---------- ------------ -------------
Purchases of property, plant and equipment (7,430) (2,031) (84) (200)
---------- ---------- ------------ -------------
Cash used in investing activities......... (7,430) (2,031) (10,642) (200)

FINANCING ACTIVITIES
Cash contributed from TRW Inc............. -- -- 10,858 --
---------- ---------- ------------ -------------
Redemption of common stock................ -- -- -- (50)
---------- ---------- ------------ -------------
Increases to debt......................... -- -- 202 --
---------- ---------- ------------ -------------
Repayment of debt......................... -- (1,866) -- (7)
Net advances from TRW Inc................. 7,048 5,999 -- --
---------- ---------- ------------ -------------
Net cash provided by (used in) financing
activities............................. 7,048 4,133 11,060 (57)
---------- ---------- ------------ -------------

Net increase (decrease) in cash........... 90 (246) 229 (167)
Cash at beginning of period............... 283 529 300 467
---------- ---------- ------------ -------------
Cash at end of period..................... $ 373 $ 283 $ 529 $ 300
========== ========== ============ =============
</TABLE>

SEE ACCOMPANYING NOTES.

F-28
<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS

TRW Milliwave Inc. (TRW Milliwave or the Company)--formerly Milliwave
Technologies, Inc.-- was acquired by TRW Inc. on September 30, 1997. The
purchase price was approximately $11 million. This transaction was accounted for
under the purchase method of accounting for business combinations.

The accompanying financial statements include the statements of operations,
shareholder's equity, and cash flows for the periods of the Company since TRW
Inc.'s acquisition. The statements of operations, shareholder's equity, and cash
flows from January 1,1997 through September 30, 1997 (the Predecessor Period)
are also presented in the accompanying financial statements. During the
Predecessor Period, the Company operated under different ownership.

The Company is a wholly owned subsidiary of TRW Inc. (TRW or the Parent
Company) within TRW's Space and Electronics Group. TRW Milliwave manufactures
transceiver modules employing gallium arsenide millimeter-wave monolithic
integrated circuits for broadband systems.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared on a historical
basis and, as such, reflect the historical financial position and results of
operations and cash flows of the Company.

Certain general and administrative costs have been allocated from TRW or
TRW's Space and Electronics Group. Allocations from TRW for such expenses have
been made primarily on a proportional cost allocation method based on revenues,
payroll expenses, or net book value of assets.

2. SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

The Company recognizes product revenue at the time of product shipment
directly to a customer and provides for estimated warranty expense at the time
of sale. The Company's customers are primarily wireless systems integrators and
equipment manufacturers. TRW Milliwave's products are integrated into the
products of its customers. There are no significant customer acceptance
requirements or post-shipment obligations on the part of TRW Milliwave.

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK

The estimated fair values of cash, accounts receivable, accounts payable,
and accrued expenses approximate their carrying value because of the short term
maturity of these instruments or the stated interest rates are indicative of
market interest rates.

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables. The
Company conducts a major portion of its business with a limited number of
customers. Credit is extended based upon an evaluation of each customer's
financial condition, with terms consistent with those present throughout the
industry. Typically, the Company does not require collateral from customers.

F-29

<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999

ACCOUNTS RECEIVABLE FROM/ACCOUNTS PAYABLE TO AFFILIATES

Affiliates represent TRW Inc. and its groups, divisions or subsidiaries.
Accounts receivable from and payable to affiliates relate to transactions in the
normal course of operations. These transactions result from sales to or
purchases from affiliates, as well as allocated expenses from affiliates for
general and administrative costs.

INVENTORIES

Inventories consist of raw materials, work-in-process, and finished goods.
These materials are stated at the lower of cost (first-in-first-out) or market.
The Company's business is subject to the risk of technological and design
changes. The Company provides for obsolete or slow-moving inventory based on
management's analysis of inventory levels and future sales forecasts at the end
of each accounting period.

The following is a summary of inventories at December 31 (in thousands):

1999 1998
---------- ----------
Raw materials...................................... $ 2,930 $ 1,013
Work in process and finished goods................. 3,630 1,877
Inventory allowances............................... (1,894) (509)
---------- ----------
---------- ----------
$ 4,666 $ 2,381
========== ==========

ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Financial Accounting Standards Board ("FASB") Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of," the Company records write-downs on long-lived assets
used in operations when events and circumstances indicate that the assets might
be impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets. In those
circumstances, the amount of the write down is determined based on the
difference between the fair value and the carrying value of the underlying
assets.

COSTS IN EXCESS OF NET ASSETS ACQUIRED

Excess of cost over the fair value of net assets acquired (or goodwill) is
amortized on a straight-line basis over 6 years. The carrying amount of goodwill
is reviewed if facts and circumstances suggest that it may be impaired. In
addition, under FASB Statement No. 121, goodwill associated with assets acquired
in a purchase business combination is included in impairment evaluations when
events or circumstances exist that indicate the carrying amount of those assets
may not be recoverable.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the

F-30

<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999

financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is computed
on a straight-line basis over the useful lives of the assets, ranging from three
to thirty years. Property, plant and equipment consist of the following at
December 31 (in thousands):

1999 1998
------------ ----------
Land........................................ $ 200 $ 200
Buildings................................... 2,294 2,703
Machinery and equipment..................... 8,797 1,567
Computer software........................... 597 --
------------ ----------
11,888 4,470
Less accumulated depreciation............... 1,011 293
------------ ----------
$ 10,877 $ 4,177
============ ==========

INCOME TAXES

Deferred tax assets and liabilities are determined based on the differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

Federal and state income tax returns are filed on a consolidated or
combined basis with TRW Inc. and/or its affiliates. TRW Milliwave's portion of
income tax accounts is included in the Company's financial statements. When
current tax losses are realized by Milliwave, TRW and/or its affiliates are able
to utilize the resulting tax benefits to offset their taxable income.
Accordingly, when such benefit is utilized by TRW or its affiliates, TRW
Milliwave records the income tax benefit, with a related entry to accounts
receivable from affiliates.

NET LOSS PER SHARE

The Company computes net loss per share in accordance with FASB Statement
No. 128, "Earnings per Share" (FAS 128) and SEC Staff Accounting Bulletin No. 98
(SAB 98). Under the provisions of FAS 128 and SAB 98, basic net loss per share
is computed by dividing the net loss applicable to common shareholders for the
period by the weighted average number of shares of Common Stock outstanding
during the period. No potentially dilutive shares exist.

COMPREHENSIVE INCOME (LOSS)

During 1999, the Company adopted the disclosure requirements of FASB
Statement No. 130, "Reporting Comprehensive Income." The Statement requires the
Company to display an amount representing comprehensive income for the year in a
financial statement that is displayed with the same prominence as other
financial statements. The Company had no items of other comprehensive income
(loss) during the year ended December 31, 1999.

F-31
<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999

SEGMENTS

The Company has one segment--the sale of transceiver modules employing
gallium arsenide millimeter-wave monolithic integrated circuits for broadband
systems. Virtually all of the Company's operations are conducted domestically.

ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
is required to be adopted in years beginning after June 15, 1999. Because of the
Company's minimal use of derivatives, management does not anticipate that the
adoption of the new Statement will have a significant effect on earnings or the
financial position of the Company.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition", which
provides guidance on the recognition, presentation and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. The Company believes that its revenue
recognition policy is in compliance with the provisions of SAB 101 and that the
adoption of SAB 101 had no material effect on its financial position or results
of operations.

3. RELATED PARTY TRANSACTIONS

ACCOUNTS RECEIVABLE FROM/PAYABLE TO AFFILIATES

In the course of operations, the Company has various transactions with
TRW Inc. and other companies owned by TRW Inc. (affiliates). The terms of those
transactions were determined between related parties and may differ from terms
which would have occurred between unrelated parties and may also differ from the
costs which would have been incurred had the Company operated as an independent
company. Accounts receivable from or payable to affiliates relate mainly to
operating transactions between the Company and other TRW affiliates.

ADVANCES FROM TRW INC.

TRW Milliwave participates in TRW's cash management system, under which
TRW withdraws the Company's cash receipts and provides for any cash
disbursements that have cleared the bank on a daily basis. The net funds
advanced by TRW under this arrangement are used by Milliwave to fund operations
of the Company. The cumulative net funds advanced to Milliwave are recorded as
Advances From TRW Inc. This balance has been included as a component of
shareholder's equity as it was not the original intention of TRW Milliwave or
TRW to settle such balances in cash. At December 31, 1999 and 1998, there were
outstanding cash balances due to TRW of approximately $13.0 million and $6.0
million, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES ALLOCATED FROM TRW INC.

As discussed in Note 1, TRW Inc. and TRW Space and Electronics Group
incur general and administrative expenses that relate to various TRW operating
units that are allocated to the

F-32
<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999

operating units. Such expenses recorded by TRW Milliwave totaled $0.5 million,
$0.2 million and $26,000 during the years ended December 31, 1999 and 1998 and
the period from October 1, 1997 through December 31, 1997, respectively. The
costs related primarily to compensation and fringes, legal and accounting
expenses, and other general and administrative costs. As TRW Inc. did not own
Milliwave prior to September 30, 1997, no such expenses were incurred during the
period from January 1, 1997 through September 30, 1997. Management believes that
all costs incurred by TRW Inc. and its affiliates relating to the operations of
the Company have been appropriately allocated and reflected in the accompanying
financial statements.

4. COMMITMENTS

The Company has significant supply agreements with TRW's Space and
Electronics Group to supply or test various products. These supply agreements
relate to TRW's Space and Electronics Group's contracts with two outside
customers. These supply agreements have sales values of $10.4 million and $6.7
million, with expiration dates of March 25, 2001 and May 30, 2000, respectively.

5. INCOME TAXES

Significant components of the income tax benefit attributable to
continuing operations are as follows (in thousands):

<TABLE>
<CAPTION>
PREDECESSOR
PERIOD
---------------
PERIOD FROM
PERIOD FROM JANUARY 1,
OCTOBER 1, 1997
YEAR ENDED DECEMBER 31, 1997 THROUGH THROUGH
------------------------- DECEMBER 31 SEPTEMBER 30
1999 1998 1997 1997
------------ ----------- -------------- ---------------
<S> <C> <C> <C> <C>
Current:
Federal.............................. $ (1,350) $ (172) $ (40) $ (84)
State................................ (199) (18) (6) (25)
------------ ----------- -------------- ---------------
(1,549) (190) (46) (109)
Deferred:
Federal.............................. 902 (589) -- (38)
State................................ 129 (71) -- (6)
------------ ----------- -------------- ---------------
1,031 (660) -- (44)
------------ ----------- -------------- ---------------
Income tax benefit...................... $ (518) $ (850) $ (46) $ (153)
============ =========== ============== ===============
</TABLE>

F-33

<PAGE>

TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999

Significant components of the Company's deferred tax assets and
liabilities are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Deferred tax assets:
Inventory reserves.......................................................... $ 312 $ 183
Accounts receivable reserves................................................ -- 285
Payroll accruals............................................................ 170 55
Maintenance accruals........................................................ 123 --
Other....................................................................... 32 196
-------- --------
Total deferred tax assets...................................................... 637 719

Deferred tax liabilities:
Depreciation................................................................ (758) (15)
Capitalized software costs.................................................. (206) --
-------- --------
Total deferred tax liabilities................................................. (964) (15)
-------- --------
Net deferred tax (liabilities) assets.......................................... $ (327) $ 704
======== ========
</TABLE>

The reconciliation of income tax at the U.S. federal statutory rate to
income tax benefit is as follows:

Income tax benefit at U.S. statutory rates.. (35)% (35)% (35)% (35)%
Nondeductible goodwill...................... 19 16 28 --
Other....................................... (1) (4) (2) --
-------- --------- -------------- ---------------
(17)% (23)% (9)% (35)%
======== ========= ============== ===============
</TABLE>

No cash payments were made by TRW Milliwave during 1999, 1998 or 1997 for
income taxes.

6. EMPLOYEE BENEFIT PLAN

The Company participates in TRW's contributory stock ownership and
savings plan (the Plan) for which a majority of its employees are eligible as
defined in the Plan. TRW Milliwave matches employee contributions subject to
plan limitations. The Company recognized contributions expense of approximately
$59,000 and $36,000 during the years ended December 31, 1999 and 1998. For the
period from October 1, 1997 through December 31, 1997, no contributions were
made.

F-34
<PAGE>
TRW MILLIWAVE INC.
(A WHOLLY OWNED SUBSIDIARY OF TRW INC.)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999

Prior to the acquisition of Milliwave Technologies by TRW Inc., the
Company had a defined contribution benefit plan, to which eligible employees of
the Company were permitted to contribute. The Company did not contribute to this
benefit plan.

7. SUBSEQUENT EVENTS (UNAUDITED)

On March 31, 2000 TRW Milliwave merged with Endgate Corporation. In the
merger, Milliwave merged into Endgate and received approximately 52% of the
merged company's capital stock in exchange for TRW's shares in Milliwave. As a
result, Endgate was the surviving corporation in the merger and TRW Milliwave
ceased to exist as a separate legal entity. However, because TRW owned more than
half of Endgate's outstanding capital stock after the merger, TRW Milliwave is
treated as the acquiring company for accounting purposes. As a result, Endgate
ceased to be a separate accounting entity as of the date of the merger, and the
combined company's historical financial statements are those of Milliwave. In
connection with the merger, the combined company was renamed as Endwave
Corporation.

F-35
<PAGE>

ENDWAVE CORPORATION

BALANCE SHEET

(IN THOUSANDS)

AS OF JUNE 30, 2000

----------------------
(UNAUDITED)

Assets
Current assets:

Cash and cash equivalents......................... $ 36,918
Accounts receivable, net.......................... 2,870
Accounts receivable from affiliates............... 4,153
Inventories....................................... 14,545
Other current assets.............................. 398
----------------------
Total current assets............................ 58,884

Property and equipment, net......................... 17,480
Goodwill, net....................................... 81,852
Intangible assets, net.............................. 22,524
Other assets, net................................... 287
----------------------
$ 181,027
======================

Liabilities and stockholders' equity

Current liabilities:
Accounts payable and bank overdrafts.............. $ 2,517
Accounts payable to affiliates.................... 15,616
Accrued compensation.............................. 2,357
Other accrued liabilities......................... 912
Deferred Income................................... 89
----------------------
Current portion of capital lease obligations...... 805
----------------------
Total current liabilities....................... 22,296

Deferred income..................................... 594
Long-term portion of capital lease obligations...... 1,596

Commitments......................................... --

Stockholders' equity:
Preferred stock................................... 187,167
Common stock...................................... 25,355
Deferred stock compensation....................... (22,093)
Accumulated deficit............................... (33,888)
----------------------
Total stockholders' equity...................... 156,541
----------------------
$ 181,027
======================
SEE ACCOMPANYING NOTES.

F-36
<PAGE>

ENDWAVE CORPORATION

STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

SIX MONTHS ENDED JUNE 30,
-----------------------------------
1999 2000
----------------- -----------------
(UNAUDITED)
<S> <C> <C>
Revenues:
Product revenues...................................................... $ 3,367 $ 14,537
Development fees...................................................... -- 946
Total revenues...................................................... 3,367 15,483

Costs and expenses:
Cost of product revenues.............................................. 3,880 19,196
Research and development.............................................. 142 3,732
Sales and marketing................................................... 203 854
General and administrative............................................ 1,149 2,286
Amortization of goodwill and other intangible assets.................. 768 5,186
In-process research and development................................... -- 11,700
Amortization of deferred stock compensation........................... -- 1,505
Total costs and expenses............................................ 6,142 44,459

Loss from operations....................................................... (2,775) (28,976)
Interest income (expense) and other, net................................... -- 353
Net loss before income tax benefit (expense)............................... (2,775) (28,623)
Income tax benefit (expense)............................................... 700 627
Net loss................................................................ $ (2,075) $ (27,996)

Basic and diluted net loss per share....................................... $ (207,500) $ (54.52)
Shares used in computation of basic and diluted net loss per share......... 10 513,501
================= =================
</TABLE>

SEE ACCOMPANYING NOTES.

F-37
<PAGE>

ENDWAVE CORPORATION

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)

ADVANCES ADDITIONAL DEFERRED
PREFERRED COMMON FROM TRW PAID IN STOCK ACCUMULATED
STOCK STOCK INC. CAPITAL COMPENSATION DEFICIT TOTAL
---------- --------- ---------- ----------- -------------- ------------ ----------
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance as of
December 31, 1999... $ -- $ -- $ 13,047 $ 10,858 $ -- $ (5,892) $ 18,013
Issuance of preferred
stock............... 19,985 19,985
Recapitalization in
connection with the
merger.............. 167,182 5,096 (13,047) (10,858) (3,380) 144,993
Exercise of stock
options............. 41 41
Deferred stock
compensation........ 20,218 (20,218) --
Amortization of
deferred stock
compensation........ 1,505 1,505
Net loss............... (27,996) (27,996)
---------- --------- ---------- ----------- -------------- ------------ ----------
Balance as of June 30,
2000................ $ 187,167 $ 25,355 $ -- $ -- $ (22,093) $ (33,888) $ 156,541
========== ========= ========== =========== ============== ============ ==========

</TABLE>

SEE ACCOMPANYING NOTES.

F-38
<PAGE>

ENDWAVE CORPORATION

STATEMENTS OF CASH FLOWS

(IN THOUSANDS)
<TABLE>
<CAPTION>

SIX MONTHS ENDED
JUNE 30,
-----------------------
1999 2000
---------- -----------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES

Net loss..................................................... $ (2,077) $ (27,996)
Adjustments to reconcile net loss to net
cash used by operations:
Depreciation.............................................. 250 1,050
Amortization of goodwill and other
intangible assets......................................... 768 5,186
Changes in operating assets and liabilities:
Accounts receivable..................................... (537) (2,757)
Inventories............................................. (1,593) (6,325)
Other assets............................................ (385) 104
Account payable......................................... (699) 4,597
Accounts payable, affiliate............................. 1,134 3,404
Accrued compensation.................................... 1,134 983
Other accrued liabilities............................... (1,103) 217
Deferred taxes.......................................... 324 (327)
Accounts receivable, affiliates......................... -- 1,981
Deferred income......................................... -- (22)
---------- -----------
Net cash used in operating activities........................ (2,784) (19,905)
---------- -----------

INVESTING ACTIVITIES

Purchase of property and equipment........................... (3,992) (3,413)
---------- -----------
Net cash used in investing activities........................ (3,992) (3,413)
---------- -----------

FINANCING ACTIVITIES

Payments under capital lease obligations..................... -- (243)
Net advances from TRW Inc.................................... 6,691 5,993
Net cash acquired............................................ -- 20,882
Net proceeds from issuance of preferred stock
in conjunction with the acquisition of
Endgate................................................... -- 19,985
Proceeds from stock options exercised........................ 41
---------- -----------
Net cash provided by financing activities.................... 6,691 46,658
---------- -----------

Net change in cash and cash equivalents...................... (85) 23,340
Cash and cash equivalents at the beginning of the period..... 283 373
---------- -----------
Cash and cash equivalents at the end of the period........... $ 198 $ 36,918
========== ===========

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES

Non-cash stock compensation.................................. $ 1,505
===========
Non-cash in-process R&D...................................... $ 11,700
===========
Equipment acquired under capital lease arrangements.......... $ 690 $ 1,283
========== ===========
</TABLE>

F-39
<PAGE>

ENDWAVE CORPORATION

NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1999 AND 2000
(UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

On March 31, 2000, Endgate merged with TRW Milliwave Inc., a wholly-owned
subsidiary of TRW Inc. In the merger, Milliwave merged into Endgate and Endgate
issued 13,963,063 shares of its capital stock to TRW Inc. in exchange for TRW's
shares in TRW Milliwave. As a result, Endgate was the surviving corporation in
the merger and TRW Milliwave ceased to exist as a separate legal entity.
However, because TRW Inc. owned more than half of Endgate's outstanding capital
stock immediately after the merger, TRW Milliwave is treated as the acquiring
company for accounting purposes. As a result, Endgate ceased to be a separate
accounting entity as of the date of the merger, and the combined company's
financial statements prior to the merger are those of TRW Milliwave. In
connection with the merger, we renamed the combined company as Endwave
Corporation. The following unaudited pro forma condensed combining financial
statements gives effect to the merger of TRW Milliwave and Endgate.

The total purchase costs of the transactions have been calculated with
Milliwave treated as the accounting acquiror. As consideration for the
acquisition, we issued shares of Series T-1 preferred stock. The acquisition was
accounted for using the purchase method of accounting. The aggregate purchase
price of $139.9 million was allocated to the assets and liabilities acquired
based on their fair values as follows (in thousands):

AMOUNT
---------------
Tangible net assets........................................... $ 24,377
Purchased technology.......................................... 16,100
Customer list................................................. 2,600
Acquired workforce............................................ 4,900
Goodwill...................................................... 80,218
In-process research and development........................... 11,700
---------------
Aggregate purchase price................................. $ 139,895
===============
In determining the total consideration as well the allocation of the
purchase price including the amount of in-process research and development,
Milliwave considered as part of their analysis an appraisal prepared by an
independent appraisal firm using established valuation techniques in the high
technology industry. The amount allocated to in-process research and development
was expensed upon acquisition because technological feasibility has not been
established and no future alternative uses existed. The in-process research and
development was identified and valued through extensive interviews and
discussions with management and the analysis of data provided by Endgate
concerning developmental products, their respective stage of development, the
time and resources needed to complete them, their expected income generating
ability, target markets and associated risks. The income approach, which
includes an analysis of the markets, cash flows, and risks associated with
achieving such cash flows, was the primary technique utilized in valuing the
in-process research and development project. A portion of the purchase price was
allocated to the developmental project based on the appraised fair value of such
project. A one time charge of $11.7 million for purchased in-process research
and development arising from the acquisition has been reflected in the condensed
statement of operations of Endwave in the six month period ended June 30, 2000.
The accompanying unaudited condensed financial statements for the six months
ended June 30, 1999 are derived from the historical unaudited financial
statements of TRW Milliwave Inc. The accompanying unaudited condensed financial
statements for the six months ended June 30, 2000 are derived from the
historical financial statements of Endwave Corporation. Such financial
information is based on the historical financial information of TRW Milliwave
Inc. for the six months ended June 30, 2000 plus the effect of reflecting the
acquisition of Endgate as of March 31, 2000 using the purchase method of
accounting. These financial statements should be read in conjunction with the
audited financial statements of TRW Milliwave Inc. and Endgate Corporation
included elsewhere herein.

F-40
<PAGE>

ENDWAVE CORPORATION

NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1999 AND 2000
(UNAUDITED)

NOTE 2. UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying financial statements and related notes as of June 30,
2000, and for the six months ended June 30, 1999 and 2000, are unaudited, but
include all adjustments, consisting only of normal recurring adjustments, that
management of Endwave considers necessary for a fair presentation of its
financial position, operating results, and cash flows for the interim date and
periods presented. Results for the nine-month period ended June 30, 2000 are not
necessarily indicative of results to be expected for the full year ending
December 31, 2000 or for any future period.

NOTE 3. AMORTIZATION OF PURCHASED INTANGIBLES

In connection with the merger of TRW Milliwave Inc. and Endgate
Corporation, the company has recorded the amortization of purchased intangibles
over the estimated useful lives as follows (in years):

ESTIMATED
USEFUL LIFE
-----------
Purchased technology........................................ 6
Customer list............................................... 5
Acquired workforce ......................................... 5
Goodwill.................................................... 6

NOTE 4. INVENTORIES

Inventories are stated at the lower of cost or market (on a first-in,
first-out basis) and are comprised of the following as of June 30, 2000 (in
thousands):

Raw materials............................................... $ 9,377
Work in process............................................. 4,774
Finished goods.............................................. 394
-----------
$14,545
===========

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 2000 (in
thousands):

JUNE 30,
2000
-----------
Laboratory and demonstration equipment............................ $ 9,091
Software.......................................................... 1,481
Computer equipment................................................ 1,499
Furniture and fixtures............................................ 433
Leasehold improvements............................................ 254
Building.......................................................... 2,502
Land.............................................................. 200
-----------
25,460

Less accumulated depreciation and amortization
(including amortization of assets held under capital lease).... (7,980)
-----------
Property and equipment, net....................................... $ 17,480
===========

F-41
<PAGE>

ENDWAVE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1999 AND 2000
(UNAUDITED)

NOTE 6. DEVELOPMENT FEES

In fiscal 1998, Endgate entered into a development and production
agreement with a major customer for development and production of a new radio
product. In fiscal 1999, the agreement was amended to include additional
products. Under this agreement, as amended, the customer will provide funding of
Endgate's development costs for this product up to a maximum of $3,500,000. The
Company received $670,000 and $400,000 under this agreement during the years
ended June 30, 1999 and 1998. Costs incurred under this contract approximated
the revenue recognized and are included in research and development expenses and
amortized to approximately $1,020,000 and $286,000 in 1999 and 1998,
respectively.

NOTE 7. DEFERRED STOCK COMPENSATION

In connection with the grant of stock options to employees, the Company
recorded deferred stock compensation within stockholders' equity of
approximately $24,789,000 ( including $4,571,000 assumed in connection with the
merger), representing the difference between the deemed fair value of the common
stock for financial statement presentation purposes and the option exercise
price of these options at the date of grant. During the three months ended June
30, 2000 we amortized $1,505,000 of this deferred stock compensation. We will
amortize the remaining deferred stock compensation using the accelerated method
over the vesting period of the related options, generally four years.

NOTE 8. STOCKHOLDERS' EQUITY--CONVERTIBLE PREFERRED STOCK

Effective March 31, 2000, Endgate issued 13,963,063 shares of Series T-1
preferred stock in connection with its merger with TRW Milliwave Inc. In return
for these shares, Endgate received 100% ownership of TRW Milliwave Inc. plus
$20,000,000. The Series T-1 preferred stock is convertible into common stock on
a one-for-one basis, subject to certain antidilution provisions. The Series T-1
preferred stock will automatically convert into common stock upon the
consummation of an underwritten public offering under the Securities Act of 1933
of Endwave's common stock in which the per share price is not less than $9.00
per share and the aggregate gross proceeds to the Company are at least
$15,000,000 or upon the election of a majority of the holders of all the
preferred shares outstanding voting together as a single class. The holders of
the T-1 preferred stock have the right to receive dividends when and if declared
by the directors. Upon liquidation, the Series T-1 preferred stockholders are
entitled to receive a distribution of $3.46 per share in preference to the
common stockholders and on a parity with the other preferred stockholders.

F-42
<PAGE>

ENDWAVE CORPORATION

NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1999 AND 2000
(UNAUDITED)

NOTE 9. STOCK OPTION PLAN

A summary of stock option activity is as follows:

OUTSTANDING STOCK OPTIONS
--------------------------------------------
NUMBER OF WEIGHTED-AVERAGE
SHARES EXERCISE PRICE EXERCISE PRICE
---------- -------------- ----------------

Balance at December 31, 1999..... 1,608,384 $0.40-$4.24 $1.94
Options granted............... 3,271,995 $4.00-$12.00 $6.06
Options exercised............. (330,951) $0.40-$6.00 $1.20
Options canceled.............. (63,290) $1.20-$6.00 $2.88
---------- -------------- ----------------
Balance at June 30, 2000......... 4,486,138 $0.40-$12.00 $4.78
========== ============== ================

NOTE 10. STOCK SPLIT

Effective June 6, 2000, Endwave underwent a one-for-two reverse split of
all outstanding shares of preferred stock and common stock.

F-43
<PAGE>

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN
THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES
OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED.
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE
OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR
ANY SALE OF OUR COMMON STOCK.

TABLE OF CONTENTS

PAGE

Prospectus Summary......................... 1
Risk Factors............................... 6
Special Note Regarding
Forward-Looking Statements............ 21
Use of Proceeds............................ 22
Dividend Policy............................ 22
Capitalization............................. 23
Dilution................................... 24
Selected Financial Data.................... 25
Management's Discussion and Analysis of
Financial Condition and Results
of Operations......................... 29
Business................................... 40
Management................................. 53
Certain Transactions....................... 67
Principal Stockholders..................... 70
Description of Capital Stock............... 72
Shares Eligible for Future Sale............ 75
Underwriting............................... 77
Legal Matters.............................. 80
Experts.................................... 80
Where You Can Find More
Information........................... 80
Index to Financial Statements.............. F-1

DEALER PROSPECTUS DELIVERY OBLIGATIONS:

UNTIL __________, 2000 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
DEALERS ARE ALSO OBLIGATED TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

[ENDWAVE LOGO]

COMMON STOCK

DEUTSCHE BANC ALEX. BROWN

J.P. MORGAN & CO.

U.S. BANCORP PIPER JAFFRAY

EPOCH PARTNERS

Prospectus

_______, 2000

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the expenses paid or to be paid by the
Company (other than underwriting compensation expected to be incurred) in
connection with the offering described in this Registration Statement. All
amounts are estimates except the SEC Registration Fee, the NASD Filing Fee and
the Nasdaq National Market Listing Fee.

<TABLE>
<S> <C>
SEC Registration Fee............................................................................ $ 30,360
NASD Filing Fee................................................................................. 12,000
Nasdaq National Market Listing Fee.............................................................. *
Blue Sky Qualification Fees and Expenses........................................................ *
Printing Costs.................................................................................. *
Legal Fees and Expenses......................................................................... *
Accounting Fees and Expenses.................................................................... *
Directors and Officers Liability Insurance Premium.............................................. *
Transfer Agent and Registrar Fees and Expenses.................................................. *
Miscellaneous................................................................................... *
--------------
Total...................................................................................... *
==============
</TABLE>
* To be filed by Amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our amended and restated certificate of incorporation, which will become
effective upon the closing of this offering, requires us to indemnify our
directors and executive officers to the fullest extent not prohibited by the
Delaware law. The Delaware law provides for the elimination of a director's
personal liability for monetary damages resulting from a breach of fiduciary
duty, except in circumstances involving wrongful acts, such as:

o any breach of the director's duty of loyalty;

o acts or omissions which involve a lack of good faith, intentional
misconduct or a knowing violation of the law;

o payment of dividends or approval of stock repurchases or redemptions
that are unlawful under Delaware law; or

o any transaction from which the director derives an improper personal
benefit.

The certificate of incorporation provision does not limit or eliminate
our rights or any stockholder's rights to seek non-monetary relief, such as an
injunction or rescission, in the event of a breach of director's fiduciary duty.
The provision will not alter a director's liability under federal securities
laws. Further, any repeal or modification of such provision by the stockholders
of the Company shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Company existing at
the time of such repeal or modification.

Our bylaws, which will become effective upon the closing of this
offering, require us to indemnify our directors and executive officers to the
fullest extent not prohibited by the Delaware law. We may modify the extent of
such indemnification by individual contracts with our directors and executive
officers. Further, we may decline to indemnify any director or executive officer
in connection with any proceeding initiated by such person, unless such
indemnification is expressly required to be made by law or the proceeding was
authorized by our board of directors.

II-1
<PAGE>

We have entered into indemnity agreements with each of our current
directors and executive officers to give such directors and officers additional
contractual assurances regarding the scope of the indemnification set forth in
our certificate of incorporation and bylaws and to provide additional procedural
protections. At present, there is no pending litigation or proceeding involving
any of our directors, officers or employees for which indemnification is sought,
nor are we aware of any threatened litigation that may result in claims for
indemnification.

We have the power to indemnify our other officers, employees and other
agents, as permitted by Delaware law, but we are not required to do so.

We plan to obtain directors' and officers' liability insurance.

The underwriting agreement provides for the indemnification of the
directors and officers of the Company in certain circumstances.

Reference is made to the following documents filed or incorporated by
reference as exhibits to this Registration Statement regarding relevant
indemnification provisions described above and elsewhere herein:

EXHIBIT DOCUMENT NUMBER
------------------ ----------
Form of Underwriting Agreement.............................. 1.1
Amended and Restated Certificate of Incorporation........... 3.3
Amended and Restated Bylaws................................. 3.4
Amended and Restated Investors' Rights Agreement............ 4.2
Form of Indemnity Agreement................................. 10.1

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Endwave has issued unregistered securities to (a) founders and employees
and (b) other individual and institutional investors. Each such issuance was
made in reliance upon the exemptions from registration requirements of the
Securities Act of 1933, as amended, contained in Section 3(a)(9), Section 4(2)
and/or Regulation D promulgated thereunder, or Rule 701 promulgated thereunder
on the basis that such transactions did not involve a public offering. When
appropriate, we determined that the purchasers of securities described below
were sophisticated investors who had the financial ability to assume the risk of
their investment in Endwave's securities and acquired such securities for their
own account and not with a view to any distribution thereof to the public. The
certificates evidencing the securities bear legends stating that the securities
are not to be offered, sold or transferred other than pursuant to an effective
registration statement under the Securities Act or an exemption from such
registration requirements. The following information relates to securities
issued or sold by Endwave within the last three fiscal years:

In September 1997, in connection with the lease of equipment from
Comdisco, Inc., we issued a warrant to Comdisco to purchase up to 3,936 shares
of Series E-4 preferred stock at an exercise price of $11.44 per share. This
warrant expires upon the completion of this offering.

In October 1997, we issued and sold to 20 accredited investors an
aggregate of $2.5 million in subordinated notes. The notes were automatically
converted into shares of our Series E-5 preferred stock upon the closing of our
Series E-5 financing in March 1998 at an exercise price of $6.00 per share.

In October 1997, we issued to 20 accredited investors warrants to
purchase approximately 83,000 shares of our Series E-5 preferred stock with an
exercise price of $6.00 per share. The warrants were exercised in full upon the
closing of the Series E-5 financing.

In March 1998, upon the obtaining of a line of credit from Silicon Valley
Bank, we issued a warrant to Silicon Valley Bank to purchase up to 6,250 shares
of Series E-5 preferred stock, at an exercise price of $6.00 per share. This
warrant expires in March 2003.

II-2
<PAGE>

In March through May 1998 we sold an aggregate of 2,481,678 shares of
Series E-5 preferred stock at $6.00 per share to 31 accredited investors for an
additional $11.3 million in cash, forgiveness of the subordinated notes and upon
exercise of the Series E-5 warrants.

In February through March 1999, we issued and sold to 27 accredited
investors an aggregate of $5.1 million in subordinated notes. The notes were
automatically converted into shares of our Series E-6 preferred stock upon the
closing of our Series E-6 financing in April 1999 at an exercise price of $6.004
per share.

In February through March 1999, we issued to 27 accredited investors
warrants to purchase 170,621 shares of our Series E-6 preferred stock with an
exercise price of $6.004 per share. The warrants expire upon the completion of
this offering.

In April 1999 we sold an aggregate of 3,456,391 shares of Series E-6
preferred stock at $6.004 per share to 33 accredited investors. The aggregate
proceeds received by Endwave for the sale of these securities was $20,752,253,
composed of $15,629,867 in cash and $5,121,386 in forgiveness of the convertible
subordinated notes described in the preceding paragraph.

In April 1999, in connection with financial advisory services provided by
Hambrecht & Quist LLC in connection with the Series E-6 financing, Endwave
issued a warrant to Hambrecht & Quist to purchase up to 25,316 shares of Series
E-6 preferred stock at an exercise price of $6.004 per share. This warrant
expires upon the completion of this offering.

In January through February 2000, we issued and sold to 27 accredited
investors an aggregate of $5 million in subordinated notes. The notes were
automatically converted into shares of our Series E-7 preferred stock upon the
closing of our Series E-7 financing in March 2000 at an exercise price of $10.12
per share.

In January through February 2000, we issued to 27 accredited investors
warrants to purchase 99,595 shares of our Series E-7 preferred stock with an
exercise price of $10.12 per share. The warrants expire upon the completion of
this offering.

In March 2000 we sold an aggregate of 2,350,822 shares of Series E-7
preferred stock at $10.12 per share to 36 accredited investors. The aggregate
amount paid to Endwave for these securities was $23,790,465, composed of
$18,750,408 in cash and $5,040,057 in forgiveness of convertible subordinated
notes described in the preceding paragraph.

In March 2000 we sold 98,814 shares of E-7 Preferred stock at $10.12
per share to The SOG Fund, LP, an accredited investor. Endwave received
$1,000,000 in cash in payment for the sale of these securities.

In connection with our merger with Milliwave in March 2000, TRW's
interest in Milliwave Inc. was converted into 13,963,063 shares of Series T-1
preferred stock of Endwave.

Between July 1997 and June 2000, we issued and sold an aggregate of
360,434 shares of common stock at prices ranging from $0.40 to $6.00 per share
to employees, directors and consultants pursuant to option exercises.

II-3
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>

(a) Exhibits

EXHIBIT NUMBER DESCRIPTION
----------------------- -----------

<S> <C>
1.1 * Form of Underwriting Agreement.
2.1 Agreement and Plan of Merger by and among TRW Milliwave Inc., TRW
Inc. and the Registrant.
2.2 Amendment No. 1 to Agreement and Plan of Merger.
3.1 Amended and Restated Certificate of Incorporation of the Registrant
effective as of June 6, 2000.
3.2 Amended and Restated Bylaws of the Registrant.
3.3 Form of Amended and Restated Certificate of Incorporation to be
filed upon completion of this offering.
3.4 Form of Amended and Restated Bylaws to be effective upon completion
of this offering.
4.1 * Specimen of Common Stock Certificate.
4.2 Investors' Rights Agreement dated March 31, 2000 by and among the
Registrant and certain investors named therein.
4.3 Warrant to Purchase Stock dated March 16, 1998, issued by the
Registrant to Silicon Valley Bank for the purchase of shares of the
Registrant's Series E Preferred Stock.
5.1 * Opinion of Cooley Godward LLP
10.1* Form of Indemnity Agreement entered into by Endwave with each of
its directors and officers.
10.2 1992 Stock Option Plan.
10.3 Form of Incentive Stock Option under the 1992 Stock Option Plan.
10.4 Form of Nonstatutory Stock Option under the 1992 Stock Option Plan.
10.5 Amended and Restated 2000 Equity Incentive Plan.
10.6 Form of Stock Option Agreement under the 2000 Equity Incentive Plan.
10.7 2000 Employee Stock Purchase Plan.
10.8 Form of 2000 Employee Stock Purchase Plan Offering.
10.9 2000 Non-Employee Director Plan.
10.10 Form of Nonstatutory Stock Option Agreement under the 2000
Non-Employee Director Plan.
10.11 Officer Retention Plan.
10.12 Industrial Lease by and between The Irvine Company and the
Registrant dated March 26, 1997.
10.13 + Terms and Conditions by and between Hughes Network Systems and the
Registrant dated March 13, 1998.
10.14 + Amendment #1 to the Terms and
Conditions by and between Hughes
Network Systems and the Registrant
dated October 5, 1998.
10.15 + Amendment #2 to the Terms and
Conditions by and between Hughes
Network Systems and the Registrant
dated January 14, 2000.
10.16 + Statement of Work for Manufacture of a 24-GHZ Radio Integrated
Outdoor Unit for Subscriber and Hub Stations.
10.17 + Statement of Work for Manufacture of a 38-GHZ Radio Integrated
Outdoor Unit for Subscriber and Hub Stations.
</TABLE>

II-4
<PAGE>
<TABLE>
<S> <C>
10.18 + Production Agreement by and between TRW Inc. and the Registrant
dated March 31, 2000 for the performance of the Production
Agreement by and between TRW Inc. and Nokia Telecommunications OY
dated July 23,1996.
10.19 + 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.
10.20 + Supply Agreement by and between TRW Inc. and the Registrant dated
March 31, 2000 for the performance of the OEM Supply Agreement by
and between TRW Inc. and Nortel Networks Inc. dated July 31, 1998.
10.21 + Services Agreement by and between TRW Inc. and the Registrant dated
March 31, 2000.
10.22 + Supply Agreement by and between TRW Inc. and the Registrant dated
March 31, 2000.
10.23 Master Loan and Security Agreement by and
between FINOVA Capital Corporation and
the Registrant dated July 20, 1999.

10.24 * License Agreement by and between TRW Inc. and TRW Milliwave Inc.
dated February 28, 2000.
23.1 * Consent of Cooley Godward LLP (included in Exhibit 5.01)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney. Reference is made to page II-7.
27.1 Financial Data Schedule
27.2 Financial Data Schedule
27.3 Financial Data Schedule
27.4 Financial Data Schedule
27.5 Financial Data Schedule
99.1 * Consent of Strategis Group
</TABLE>
* To be filed by amendment.

+ Confidential treatment has been requested for portions of these exhibits.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement certificates
in such denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

II-5
<PAGE>

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this registration statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Sunnyvale, State of California, on this 12th, day of July, 2000.

ENDWAVE CORPORATION

By: /S/ EDWARD A. KEIBLE
------------------------

Edward A. Keible
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned officers
and directors of the registrant constitutes and appoints, jointly and severally,
Edward A. Keible and Bruce Margetson, and each one of them, as lawful
attorneys-in-fact and agents for the undersigned and for each of them, each with
full power of substitution and resubstitution, for and in the name, place and
stead of each of the undersigned officers and directors, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and any registration statement related to the
offering contemplated by this registration statement that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, and to file the same, with all exhibits thereto and all other documents
in connection therewith, with the Securities and Exchange Commission and any and
all applications or other documents in connection with the listing of the
registrant's common stock for trading with the Nasdaq National Market, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agent or any of them, or any of their substitute or
substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>

/S/ EDWARD A. KEIBLE Chief Executive Officer, President and Director
------------------------------- (Principal Executive Officer) July 12, 2000
Edward A. Keible

/S/ BRUCE MARGETSON Vice President and Chief Financial Officer
------------------------------- (Principal Financial and Accounting Officer) July 12, 2000
Bruce Margetson

/S/ WES BUSH Director
------------------------------- July 12, 2000
Wes Bush

/S/ TIMOTHY HANNEMANN Director
------------------------------- July 12, 2000
Timothy Hannemann

/S/ ESFANDIAR LOHRASBPOUR Director
------------------------------- July 12, 2000
Esfandiar Lohrasbpour

/S/ ROBERT PAVEY Director
------------------------------- July 12, 2000
Robert Pavey

</TABLE>

II-7

<PAGE>

EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
1.1 * Form of Underwriting Agreement.
2.1 Agreement and Plan of Merger by and among TRW Milliwave Inc., TRW
Inc. and the Registrant.
2.2 Amendment No. 1 to Agreement and Plan of Merger.
3.1 Amended and Restated Certificate of Incorporation of the Registrant
effective as of June 6, 2000.
3.2 Amended and Restated Bylaws of the Registrant.
3.3 Form of Amended and Restated Certificate of Incorporation to be
filed upon completion of this offering.
3.4 Form of Amended and Restated Bylaws to be effective upon completion
of this offering.
4.1 * Specimen of Common Stock Certificate.
4.2 Investors' Rights Agreement dated March 31, 2000 by and among the
Registrant and certain investors named therein.
4.3 Warrant to Purchase Stock dated March 16, 1998, issued by the
Registrant to Silicon Valley Bank for the purchase of shares of the
Registrant's Series E Preferred Stock.
5.1 * Opinion of Cooley Godward LLP
10.1* Form of Indemnity Agreement entered into by Endwave with each of
its directors and officers.
10.2 1992 Stock Option Plan.
10.3 Form of Incentive Stock Option under the 1992 Stock Option Plan.
10.4 Form of Nonstatutory Stock Option under the 1992 Stock Option Plan.
10.5 Amended and Restated 2000 Equity Incentive Plan.
10.6 Form of Stock Option Agreement under the 2000 Equity Incentive Plan.
10.7 2000 Employee Stock Purchase Plan.
10.8 Form of 2000 Employee Stock Purchase Plan Offering.
10.9 2000 Non-Employee Director Plan.
10.10 Form of Nonstatutory Stock Option Agreement under the 2000
Non-Employee Director Plan.
10.11 Officer Retention Plan.
10.12 Industrial Lease by and between The Irvine Company and the
Registrant dated March 26, 1997.
10.13 + Terms and Conditions by and between Hughes Network Systems and the
Registrant dated March 13, 1998.
10.14 + Amendment #1 to the Terms and
Conditions by and between Hughes
Network Systems and the Registrant
dated October 5, 1998.
10.15 + Amendment #2 to the Terms and
Conditions by and between Hughes
Network Systems and the Registrant
dated January 14, 2000.
10.16 + Statement of Work for Manufacture of a 24-GHZ Radio Integrated
Outdoor Unit for Subscriber and Hub Stations.
10.17 + Statement of Work for Manufacture of a 38-GHZ Radio Integrated
Outdoor Unit for Subscriber and Hub Stations.
10.18 + Production Agreement by and between TRW Inc. and the
</TABLE>
<PAGE>

<TABLE>
<S> <C>
Registrant
dated March 31, 2000 for the performance of the Production
Agreement by and between TRW Inc. and Nokia Telecommunications OY
dated July 23,1996.
10.19 + 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.
10.20 + Supply Agreement by and between TRW Inc. and the Registrant dated
March 31, 2000 for the performance of the OEM Supply Agreement by
and between TRW Inc. and Nortel Networks Inc. dated July 31, 1998.
10.21 + Services Agreement by and between TRW Inc. and the Registrant dated
March 31, 2000.
10.22 + Supply Agreement by and between TRW Inc. and the Registrant dated
March 31, 2000.
10.23 Master Loan and Security Agreement by and
between FINOVA Capital Corporation and
the Registrant dated July 20, 1999.
10.24 * License Agreement by and between TRW Inc. and TRW Milliwave Inc.
dated February 28, 2000.
23.1 * Consent of Cooley Godward LLP (included in Exhibit 5.01)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney. Reference is made to page II-7.
27.1 Financial Data Schedule
27.2 Financial Data Schedule
27.3 Financial Data Schedule
27.4 Financial Data Schedule
27.5 Financial Data Schedule
99.1 * Consent of Strategis Group
</TABLE>

* To be filed by amendment.
+ Confidential treatment has been requested for portions of these exhibits.