The following is management's discussion and analysis of certain significant factors that have affected the Company's financial condition and operating results for the period included in the consolidated financial statements in Item 1.

Company Overview

PHAZAR CORP's continuing operation is that of its subsidiaries, Antenna Products Corporation, Phazar Antenna Corp., Tumche Corp. and Thirco, Inc. As previously discussed in Item 1, for the purpose of this discussion, all results of Phazar Antenna Corp. are included with the results of Antenna Products Corporation. The management discussion presented in this item relates to the operations of subsidiary units and the associated consolidated financials.

PHAZAR CORP operates as a holding company with Antenna Products Corporation, Phazar Antenna Corp., Tumche Corp. and Thirco, Inc. as its wholly owned subsidiaries. Antenna Products Corporation and Phazar Antenna Corp. are operating subsidiaries with Thirco, Inc. serving as an equipment leasing company to PHAZAR CORP's operating units. Tumche Corp. has no sales or operations. Antenna Products Corporation designs, manufactures and markets antenna systems, towers and communication accessories worldwide. The United States Government, military and civil agencies and prime contractors are Antenna Products Corporation's principal customers. Phazar Antenna Corp. designs and markets fixed and mobile antennas for commercial wireless applications that include cellular, PCS, ISM (instrument scientific medical), AMR (automatic meter reading), wireless internet, wireless local area network, and other WiMax market applications.

PHAZAR CORP is primarily a build-to-order company. As such, most United States government and commercial orders are negotiated firm-fixed price contracts. PHAZAR CORP's sales to major customers at May 31, 2008, as a percentage of total sales were United States Government 24%, Page Iberica, S.A., 12% and General Dynamics 9%.

Executive Level Overview

The following table presents selected data of PHAZAR CORP. This historical data should be read in conjunction with consolidated financial statements and the related notes.

                           Three Month Period Ending  Six Month Period Ending
                                  November 30,             November 30,
                           ------------ ------------ ------------- ------------
                               2008         2007          2008         2007
Net Sales                    2,127,167    1,727,541     4,136,879    3,589,117

Gross Profit Margin %              27%          31%           32%          38%
Operating Profit (loss)       (261,840)     129,705      (282,002)     343,252

Net income (loss)             (152,703)     114,224       (58,911)     290,466
Net income (loss) per share      (0.07)        0.05         (0.03)        0.13

Total assets                 9,214,447    8,960,874     9,214,447    8,960,874

Long term debt                       -            -             -            -
Total liabilities            1,011,769    1,076,525     1,011,769    1,076,525

Capital expenditures           176,132            -       176,132            -
Dividends                            -            -             -            -

Results of Operations

Second Quarter Ended November 30, 2008 ("2009"), Compared to Second Quarter Ended November 30, 2007 ("2008")

PHAZAR CORP's consolidated sales from operations were $2,127,167 for the quarter ended November 30, 2008 compared to sales of $1,727,541 for the second quarter ended November 30, 2007. The Company's sales increased $398,626, or 23% in the second quarter of fiscal year 2009 due to higher level of shipments in the antenna product line.

Cost of sales and contracts for the operations were $1,561,007 for the quarter ended November 30, 2008 compared to $1,193,182 for the second quarter ended November 30, 2007, up $367,825, or 31%. The higher level of cost of sales is due to higher raw material costs on firm fixed price contracts.

The gross profit margin for the second quarter of fiscal year 2009 was 27% compared to 31% for the second quarter of last year.

PHAZAR CORP's operating profit margin for the first quarter of fiscal year 2009 was -12.4% compared to 7.5% in the second quarter of fiscal year 2008.

Discretionary product development spending was $224,028, or 10.5% of sales, compared to $128,795, or 7.50% of sales for the comparable period last year. The spending level increased as the Company continues to develop the new mesh radio wireless networking product line.

Sales and administration expenses were higher in the second quarter of the fiscal year 2009, $828,000 versus $404,654 for the second quarter of fiscal year 2008. The $423,346, or 105% increase in sales and administration expense is due to higher compensation costs associated with newly hired employees, incremental research and development costs during the quarter for continued development of our new mesh radio wireless networking product line and an increase in legal and professional fees primarily associated with the litigation against UBS Financial

Services. Sales and administration expense as a ratio of sales were 38.9% in the second quarter of this year compared to 23.4% in the same period last year.

Six month period ended November 30, 2008 ("2009") compared to November 30, 2007
("2008")

Consolidated sales from operations for PHAZAR CORP were $4,136,879 for the six month period ended November 30, 2008 compared to sales of $3,589,117 for the same period last year. The Company's sales increased $547,762, or 15% for the six month period due to higher level of shipments in both the commercial wireless ($362,021) and antenna ($144,551) product lines.

Cost of sales and contracts for the operations were $2,814,741 for the six month period ended November 30, 2008 compared to $2,220,200 for the same period last year. The Company's cost of sales increased $594,541, or 27% due to higher raw material costs on firm fixed price contracts.

The gross profit margin for the first half of fiscal year 2009 was 32% compared to 38% for the same period in the prior year.

Sales and administration expenses were higher in the first half of fiscal year 2009, $1,604,140 compared to $1,025,665. The $578,475, or 56% increase in sales and administration expense is due to a rise in compensation expense, legal and professional fees primarily associated with the litigation against UBS Financial Services and incremental research and development costs during the period for continued development of our new mesh radio wireless networking product line.

Other income for the six month period ended November 30, 2008, is $156,378 up from $77,196 for the same period in the prior year. The increase of $79,182, or 103% is primarily due to interest income on higher level of monies invested in auction rate securities and other investments in certificates of deposits.

The net loss for the six month period was $58,911, or $0.03 per share compared to net income of $290,466, or $0.13 per share for the comparable period in the prior year.

United States Government contracts contain a provision that they may be terminated at any time for the convenience of the Government. In such event, the contractor is entitled to recover allowable costs plus any profits earned to the date of termination. The possibility that Government priorities could change, causing a delay or cancellation of this contract and any potential follow-on work, makes it impossible to accurately predict whether revenues will increase or decrease in the upcoming year.

Sources of Liquidity

Funds generated from operations are the major internal sources of liquidity and are supplemented by funds derived from capital markets, principally bank facilities. PHAZAR CORP has a $2.0 million revolving note facility with a bank collateralized by the Company's inventory and accounts receivable. The interest rate is established as equal to Wall Street prime and is subject to a loan agreement with restrictive covenants. The most restrictive financial covenant requires the Company to maintain $4.0 million in tangible net worth and to maintain $2.5 million of working capital. At November 30, 2008, the Company had a tangible net worth of $8.2 million and had working capital of $7.0 million. As

of November 30, 2008, Antenna Products Corporation had drawn $0 of the $2.0 million line of credit with $2.0 million of the borrowing base available and unused. The revolving credit facility was renewed with a $2.0 million limit on October 3, 2008 for a period of one year. PHAZAR CORP believes that its cash and the credit available at November 30, 2008, are sufficient to fund the Company's operations for at least 12 months.

During October, 2008, the Massachusetts Education Financing Authority announced the redemption of all PHAZAR CORP's $2.65 million long term marketable securities at par plus accrued interest of approximately $36,000. Funding was received during the month of October, with $1 million used to pay off the prior advance from UBS Financial Services, Inc. taken in the form of a margin loan collateralized by the long term marketable securities.

Capital Resources

Management of the operating subsidiaries evaluates the facilities and review equipment requirements for existing and projected contracts on a regular basis. An annual capital plan is generated by management and submitted to the Board of Directors for review and approval. In the second quarter of fiscal year 2009 there were $176,132 of capital expenditures for new and replacement equipment. The Company anticipates that the existing facilities and equipment are adequate to handle the projected business in fiscal year 2009 and intends to limit the 2009 capital program to less than $350,000 for improvements and new equipment.

At November 30, 2008, PHAZAR CORP had cash and cash equivalents of $5.0 million. Deferred revenue at November 30, 2008, is $106,446.

Cash Flows

Operating Activities

Cash provided by operating activities for the second quarter of fiscal year 2009 was $68,606 compared to $(737,952) for the same period in prior year. Inventories increased to $1,995,685 at November 30, 2008 from $1,777,335 at May 31, 2008 due to normal completion and shipment of orders to customers. The decrease in accounts receivable to $732,072 at November 30, 2008 from $987,258 at May 31, 2008 is due primarily to timing of shipments. Net income adjusted for non cash charges was $55,528 for the six month period ending November 30, 2008 compared to $335,632 for the same period in the prior year.

Investing Activities

Cash of $2,473,868 was provided in investing activities during the six month periods ending November 30, 2008, which consists of the $2.65 million of redemption of long term marketable securities less capital expenditures of $176,132. Cash was not used in investing activities during the six month period ending November 30, 2008.

Financing Activities

There were no financing activities requiring cash during the six month period ending November 30, 2008. The financing activities for the second quarter of fiscal year 2008 consisted primarily of proceeds from the exercise of stock options and the FIT benefit resulting from the exercise of stock options. At November 30, 2008 and 2007, PHAZAR CORP had no long-term debt outstanding.