California		77-0368779
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

PART I.		FINANCIAL INFORMATION		PAGE NO.
Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001		3
		Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2002 and 2001		4
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2002 and 2001		5
		Notes to Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		29
Item 4.		Controls and Procedures		29
PART II.		OTHER INFORMATION
Item 6.		Exhibits and Reports on Form 8-K		30
SIGNATURES				31

		September 30, 2002				December 31, 2001
		(unaudited)
Assets:
Current assets:
Cash and cash equivalents		$	8,912			$	16,855
Short-term investments			36,258				31,018
Accounts receivable, net			6,346				7,286
Other current assets			824				895
Total current assets			52,340				56,054
Property and equipment, net			3,088				3,283
Goodwill			1,302				—
Intangible assets, net			2,470				—
Other assets			1,048				568
Total assets		$	60,248			$	59,905
Liabilities and Shareholders’ Equity:
Current liabilities:
Accounts payable and accrued liabilities		$	3,488			$	2,977
Accrued compensation			2,216				2,138
Deferred revenue			11,246				10,992
Current portion of long-term debt			19				71
Total current liabilities			16,969				16,178
Commitments
Shareholders’ equity:
Common stock			55,057				54,109
Additional paid-in capital			3,612				3,694
Notes receivable from shareholders			(294	)			(294	)
Deferred stock-based compensation			(883	)			(1,501	)
Accumulated deficit			(14,185	)			(12,503	)
Accumulated other comprehensive income (loss)			(28	)			222
Total shareholders’ equity			43,279				43,727
Total liabilities and shareholders’ equity		$	60,248			$	59,905

		Three Months Ended September 30,								Nine Months Ended September 30,
		2002				2001				2002				2001
Revenue:
License		$	6,540			$	7,599			$	19,243			$	24,764
Maintenance			5,241				4,483				14,569				12,393
Total revenue			11,781				12,082				33,812				37,157
Cost of revenue:
Cost of license			67				88				178				186
Cost of maintenance			483				480				1,399				1,430
Amortization of intangible assets			130				—				130				—
Total cost of revenue			680				568				1,707				1,616
Gross profit			11,101				11,514				32,105				35,541
Operating expenses:
Research and development			4,921				4,758				13,929				14,389
Sales and marketing			5,020				5,257				14,719				16,434
General and administrative			1,144				1,283				3,440				4,079
Stock-based compensation (1)			144				254				536				799
Acquired in-process research and development			1,700				—				1,700				—
Total operating expenses			12,929				11,552				34,324				35,701
Loss from operations			(1,828	)			(38	)			(2,219	)			(160	)
Other income, net			201				436				729				1,576
Income (loss) before income taxes			(1,627	)		$	398				(1,490	)		$	1,416
Provision for income taxes			81				70				192				234
Net income (loss)		$	(1,708	)		$	328			$	(1,682	)		$	1,182
Basic earnings per share:
Basic net income (loss) per share		$	(0.07	)		$	0.01			$	(0.07	)		$	0.05
Shares used in per share calculation			25,435				24,628				25,191				24,295
Diluted earnings per share:
Diluted net income (loss) per share		$	(0.07	)		$	0.01			$	(0.07	)		$	0.04
Shares used in per share calculation			25,435				26,543				25,191				27,259
(1)    Amortization of deferred stock-based compensation relates to the following:
		Three Months Ended September 30,								Nine Months Ended September 30,
		2002				2001				2002				2001
Cost of maintenance		$	5			$	8			$	17			$	26
Research and development			62				89				199				353
Sales and marketing			44				93				165				336
General and administrative			33				64