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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-31863

COMPUTER ACCESS TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

(408) 727-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)  Yes  ¨  No  x

The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant on June 28, 2002, based upon the closing sale price of $3.39 per share of Common Stock as of that date as reported on the Nasdaq National Market, was approximately $19.0 million. Shares of Common Stock held by officers, directors, and holders of more than 5% of the outstanding Common Stock have been excluded from this calculation because such persons may be deemed to be affiliates. The determination of affiliate status is not necessarily conclusive for other purposes.

As of March 1, 2003, there were 19,455,315 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement (the “Proxy Statement”) to be mailed to stockholders in connection with the Registrant’s 2003 annual meeting of stockholders scheduled to be held in Santa Clara, California on Friday, May 23, 2003, are incorporated by reference into Part III of this report. Except as expressly incorporated by reference, the registrant’s Proxy Statement shall not be deemed to be part of this report.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K and certain information incorporated herein by reference contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this Report on Form 10-K that are not purely historical are forward-looking statements, including, without limitation, statements regarding our expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. Forward-looking statements include, without limitation, the statements regarding (a) our intention to continue to focus our marketing efforts on certain strategies in the future, (b) our intention to continue to provide our customers with comprehensive sales and technical support and our belief that doing so is critical to remaining competitive, (c) our expectation that the change in our relationship with our North American resellers will not have a significant impact on our future operating results, (d) our expectation that we will continue benefiting from the trend toward increasingly being able to leverage customer satisfaction into new introductions and business relationships in the future; (e) our intention to expand our distribution efforts by pursuing relationships with additional distributors and manufacturer’s representatives in our current markets and with new distributors and manufacturer’s representatives in our future markets, under the heading “Item 1, Business—Marketing, Sales and Distribution;” the statement regarding our belief that our future success depends, to a large extent, upon our ability to develop new products for established and emerging communications standards and to add improved features to our existing products, under the heading “Item 1 Business—Research and Development;” the statements regarding (a) our belief that we have a competitive advantage as a result of our knowledge and expertise covering multiple communications standards, computer and software architecture and advanced ASIC and programmable logic design, (b) our intention to extend our technology base in the future to support additional emerging standards and our belief that our broad technology base allows us to quickly apply our expertise to new products and standards, under the heading “Item 1, Business—Technology;” the statements regarding (a) our expectation that competition will intensify in the future, (b) our belief that the principal factors in the competitive landscape are: product functionality; ease of product use; speed, stability and accuracy of our products; flexibility and programmability of our products; upgradability of our products; local support and service for our products; time to market with new products; breadth of our product offerings; and our price performance, (c) our belief that we compete favorably with respect to each of the factors listed above in section (b) and our belief that we have gained significant market share in some of our target markets as a result, (d) our belief that our success has been driven by our vertically integrated technology, ability to generate customer loyalty and ability to anticipate market trends, (e) our belief that we may also face competition from other companies with new technologies or products based on emerging communications standards or large companies that may enter our target markets, (f) the possibility that competing companies may develop or acquire technologies that address our target markets more effectively and at a lower cost and that such competitors may enter into strategic alliances or business combinations that increase their ability to innovate and address our markets, under the heading “Item 1, Business—Competition;” the statement regarding our expectation that we may be subject to infringement claims as the number of products and competitors in our markets grows and the functionality of products further overlaps, under the heading “Item 1, Business—Intellectual Property;” the statement regarding our expectation that we will not pay any dividends, under the heading “Part II, Item 5—Market for Registrant’s Common Equity and Related Stockholder Matters;” the statements regarding (a) our belief that our current cash, cash equivalents and short-term investments together with funds generated from operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months, (b) the possibility that we may find it necessary to obtain additional equity or debt financing and that we may not be able to do so on acceptable terms or at all, (c) our belief that the adoption of certain standards will not have a material effect on our financial position or results of operations, under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” All forward-looking statements included in this document are subject to additional risks and uncertainties further discussed under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—RISK FACTORS” and are based on information available to us on the date hereof. We assume no obligation to update any such forward-looking statements. It is important to note that our actual results could differ materially from those included in such forward-looking statements. These cautionary statements should be considered in the context of the factors listed below, as well as those disclosed from time to time in our reports on Forms 10-Q and 8-K and our Annual Reports to Stockholders.

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PART I

Item 1.    Business

Computer Access Technology Corporation is a provider of advanced verification systems and connectivity products for existing and emerging digital communications standards. Our products are used by semiconductor, device, system and software companies at each phase of their products’ lifecycles from development through production and market deployment.

We have expertise in the Bluetooth, Ethernet, Fibre Channel, IEEE 1394, InfiniBand, PCI Express, SCSI, Serial ATA and USB standards and are actively engaged with our customers throughout their development and production processes. Utilizing our easy to use, color-coded, expert analysis software, the CATC Trace^™, our development products generate, capture, filter and analyze high-speed communications traffic, allowing our customers to quickly discover and correct persistent and intermittent errors and flaws in their product design. Our production products are used in manufacturing to ensure that products comply with standards and operate with other devices, as well as assist system manufacturers in downloading software onto new computers. Our connectivity products translate communications traffic between USB and Ethernet and enable reliable, uninterrupted service for broadband Internet access. Our connectivity products also allow for simple installation and incorporate an application specific integrated circuit, or ASIC, and our proprietary embedded software and software drivers.

We have three reportable segments: development products, production products and connectivity products. Further segment and geographic information is included in Note 10 of the Notes to Consolidated Financial Statements included in this report.

Computer Access Technology Corporation was incorporated in California in 1992 and reincorporated in Delaware in 2000. Our headquarters are located at 2403 Walsh Avenue, Santa Clara, California 95051. We maintain a World Wide Web site at www.catc.com. The reference to this World Wide Web site address does not constitute incorporation by reference of the information contained therein.

Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and the proxy statement for our annual meeting of stockholders are made available, free of charge, on our website, www.catc.com, as soon as reasonably practicable after the reports have been filed with or furnished to the Securities and Exchange Commission.

Industry Background

The Demand for Digital Communications Is Growing

The demand for digital information has accelerated the need for communications among multiple electronic devices and in various markets, including computers, telecommunications, networking, storage, consumer electronics and others, such as aerospace, automotive, industrial automation, medical instrumentation and robotics. This growing demand centers on widespread, broadband transmissions of digital information, including Internet access, data storage and rich media content. Communication among digital devices, or connectivity, occurs over a variety of physical media, such as copper wire and fiber optic cable, and wireless technologies with rapidly fluctuating frequencies.

Computer technology initially provided connectivity only among internal devices, such as the processor, memory and storage, and with external peripheral devices, such as the keyboard, mouse and printer. Today, computer technology also enables connectivity among multiple computing devices and across networks, such as local area networks, wide area networks, storage area networks, home area networks, personal area networks and the Internet. Telecommunications technology also currently enables connectivity among multiple devices, such as telephones, fax machines, pagers and personal digital assistants. Consumer electronics technology is progressively enabling connectivity among devices, such as Internet appliances, digital cameras, audio systems and televisions.

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Communications Standards Are Becoming Increasingly Complex

Digital devices communicate by sending electronic signals through a transmission channel according to a specified protocol. A protocol is the set of detailed rules that governs both the channel and the device hardware and software, and regulates the manner in which the signals are sent. The channel and the protocol are both typically specified in a formal communications standard. For communication to be successful, each device must recognize and follow the same standard.

Early communications standards were relatively simple, typically involving low speed communications between two simple devices connected directly by copper wire. Current standards are increasingly complex, typically involving high-speed communications among multiple sophisticated devices indirectly linked to other devices and across various physical media, including copper wire and fiber optic cables, and wireless technologies with rapidly fluctuating frequencies. As a result, standards that were expressed initially in only a few pages of text may now extend to over a thousand pages. The specifications for these standards are broadly available, which facilitates interoperability of hardware and software products from different manufacturers.

A standard is typically introduced by several leading technology and infrastructure companies. These core or promoter companies comprise the nucleus of independent communications standards groups, sometimes referred to as implementers’ forums, trade associations or special interest groups. These groups assist in the development, implementation, promotion, and compliance with the standards. As commercial interest in a standard increases, the communications standards group typically expands to include system and device manufacturers and service providers. The promoter companies typically remain closely associated with the standard throughout its lifecycle.

A standard is implemented over a lifecycle that includes three overlapping phases: development, production and market deployment. The development phase covers the development and production of the semiconductors and software, including embedded software, protocol stacks and device drivers, that are the building blocks for products and applications. During the production phase, system and device manufacturers apply these building blocks to construct their unique products and applications. The market deployment phase covers the introduction and sale of products and applications in the market. Similarly, products associated with a particular standard follow their own unique lifecycle from development through production, deployment and operation.

Emerging Standards Promote Digital Communications

Many communications standards are emerging to meet the growing demand for digital connectivity in the computer, telecommunications, networking, storage, consumer electronics and other industries. The characteristics of each standard, including its principal uses, physical medium, transmission speed and distance covered, vary greatly. Examples of emerging standards include the following:

Bluetooth Wireless Technology.    The Bluetooth standard, or Bluetooth wireless technology, enables low speed, wireless connectivity among computers, telecommunication devices, such as mobile telephones, and consumer electronics devices, such as personal digital assistants and headphones. Bluetooth wireless technology was introduced in 1998. The promoter group consists of 3Com, Agere, Ericsson, IBM, Intel, Microsoft, Motorola, Nokia and Toshiba and, as of December 31, 2002, the Bluetooth Special Interest Group had over 2,100 member companies. Bluetooth wireless technology operates through radio waves with rapidly fluctuating frequencies at speeds of up to 1 megabits per second, or Mbps, over distances of up to 100 meters. Bluetooth products are just reaching the consumer markets at the present time and already the Bluetooth specification is being enhanced further. Changes in the specification designed to enhance the usability and acceptance of Bluetooth include: shorter connection times, less interference with other devices operating in the same 2.4 GHz band, improved voice channel capabilities, better support for devices that operate simultaneously in multiple “piconets” and increased security.

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Ethernet.    Ethernet enables high-speed connection among computers and peripheral devices in local area networks. Ethernet was introduced in 1980 by Digital Equipment Corporation, Intel, and Xerox and, in 1983, the IEEE released the first IEEE standard for Ethernet technology. Ethernet technology operates over coaxial cable, twisted pair wiring or fiber optic cable at speeds of up to 10 MBps over distances of up to 2000 meters. The IEEE has released newer versions of the Ethernet technology: Fast Ethernet in 1995, which operates at speeds up to 100 MBps, Wireless Ethernet in 1997 that operates at speeds up to 10 MBps, Gigabit Ethernet in 1998, which operates at speeds up to 1 gigabits per second, or Gbps, and 10 Gbps Ethernet was released in June 2002.

Fibre Channel.    Fibre Channel enables reliable, cost-effective information storage and delivery at very high-speeds. Fibre Channel development started in 1988 and the ANSI standards body approved the first revision in 1994. Fibre Channel is designed to deliver 1 and 2 Gbps communications and gives users the option to develop storage networks with configuration choices at different price points, levels of scalability and availability. Fibre Channel is a layered protocol that supports additional storage or networking protocols such as SCSI, IP, VI, and ESCON, thus offering many choices for storage connectivity, cluster computing and network interconnect. The Fibre Channel Industry Association (FCIA) promotes Fibre Channel adoption and has more than 150 members.

IEEE 1394.    The IEEE 1394a standard, commonly known as 1394, FireWire or i.Link, enables high-speed connectivity among computers, peripheral devices and consumer electronic devices, including audio systems, television sets, digital cameras, video recorders, video players and game consoles. 1394 was introduced in 1987 and was ratified by the IEEE in 1995. The promoter group includes Apple, Canon, Compaq, IBM, Intel, Microsoft, NEC, Philips, Sony, Sun Microsystems, Texas Instruments and Yamaha and, as of December 31, 2002, the 1394 Trade Association had over 80 member companies. 1394 enables connectivity through copper wire at speeds of up to 400 Mbps over distances of up to four and one-half meters. This speed increases to up to 3.2 Gbps over distances of up to 100 meters in the 1394b standard approved in April 2002.

InfiniBand.    The InfiniBand standard enables high-speed connectivity inside computers and among computers and storage devices in storage area networks. InfiniBand was introduced in 1999 and is expected to supplement the Fibre Channel standard for communications in storage area networks. The promoter group consists of Compaq, Dell, Hewlett-Packard, IBM, Intel, Microsoft and Sun Microsystems and, as of December 31, 2002, the InfiniBand Trade Association had over 100 members. InfiniBand operates over copper wire and fiber optic cable at speeds of up to 6 Gbps over distances of up to ten meters for copper wire and ten kilometers for fiber optic cable.

PCI Express.    PCI Express is an emerging standard that was introduced in 2002 and is intended to enhance the Peripheral Connect Interface, or PCI, architecture spanning multiple computer market segments: clients (desktop and mobile), servers (standard and enterprise), embedded computers and communication devices. PCI Express allows system original equipment manufacturers, or OEMs, and peripheral developers room for product versatility and market differentiation without the burden of carrying obsolete interfaces or losing compatibility. The promoter group consists of Compaq, Dell, IBM, Intel and Microsoft. As of March 2003, the Peripheral Component Interconnect-Special Interest Group (PCI-SIG) had more than 900 members.

SCSI.    SCSI allows different peripheral devices such as disks and tapes to be interconnected on the same bus. SCSI was invented in the 1970’s by Shugart Associates and was initially called Shugart Associates Systems Interface (SASI), an 8 bit parallel bus providing 1.5 MBps throughput. ANSI accepted this as a standard and renamed it Small Computer System Interface (SCSI) in 1986. Since then SCSI has gone through several evolutions to provide more speeds, cable lengths and features – SCSI 1, SCSI 2 and SCSI 3 including Narrow, Wide, Fast, Ultra, Ultra 2, Ultra 160 and Ultra 320. Ultra 320 is the latest of the approved standards providing 320 MBps throughput. The SCSI Trade Association formed in 1996 promotes the understanding and usage of SCSI technology.

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Serial ATA.    The Serial ATA standard enables high-speed internal storage connections for desktops and mobile computers. Serial ATA was introduced in 2000 and is expected to replace Parallel ATA, the standard used to connect storage devices such as hard drives, DVD and CD drives, and others to the motherboard. The promoter group consists of APT Technologies, Dell, Intel, Maxtor and Seagate and as of March 2003, the Serial ATA Working Group had more than 80 members. Serial ATA operates over copper wire at speeds up to 1.5 GBps over distances of up to one meter.

Universal Serial Bus.    The Universal Serial Bus standard, or USB, enables low, medium and high-speed connectivity between computers and peripheral devices, including keyboards, mice, printers, scanners, joysticks and cameras, using plug and play technology. USB was introduced in 1995 and replaces the serial, parallel, mouse and keyboard ports. The specifications for the second version of USB, or USB 2.0, were released in April 2000. The promoter group for USB consists of Compaq, Hewlett-Packard, Intel, Lucent, Microsoft, NEC and Philips and as of March 2003, the USB Implementers Forum had over 900 member companies. USB enables connectivity through copper wires at speeds of up to 480 Mbps over distances of up to five meters.

Other Standards.    There are many other existing and emerging communications standards at different stages in their respective lifecycles such as Digital Subscriber Line, or DSL, 802.11, Home RF and Global System for Mobile communication, or GSM.

Products

We offer advanced design and production verification systems for the Bluetooth, Ethernet, Fibre Channel, IEEE 1394 InfiniBand, PCI Express, SCSI, Serial ATA and USB standards, as well as production and commercial connectivity products for the USB, Bluetooth and Ethernet standards. We currently sell all of the products listed below.

Development Products

Our development products are advanced verification systems that assist hardware and software manufacturers in the efficient design of reliable and interoperable systems and devices. Most of these systems utilize our proprietary expert analysis software, the CATC Trace, which displays communications traffic in searchable, color-coded packets. Our development products consist of the following:

PETracer^™.    PETracer is a PCI Express x1 Advanced Verification System that was announced in the first quarter of 2003. The PETracer is a high impedance, non-intrusive analyzer, capturing, processing and analyzing PCI Express traffic on a single link. Developers use the PETracer expert analysis CATC Trace software running on a PC to define recording, triggering and filtering conditions and to view, process and analyze trace results. The CATC Trace software provides an intuitive and graphical display of protocol traffic for faster interpretation and debug of PCI Express systems.

FCTracer^™.    FCTracer, announced in the first quarter of 2003, is a powerful Fibre Channel test and debug analyzer that combines non-intrusive, multi-port recording with hardware triggering and FC-4 level protocol decoding. Utilizing the intuitive CATC Trace expert analysis software, it allows designers and validation engineers to pinpoint intermittent problems in Fibre Channel networks and provides high-level traffic reports that help identify and explain performance issues.

SATrainer^™.    The SATrainer is an add-on traffic generation module for our SATracer Serial ATA protocol analyzer that we introduced in the first quarter of 2003. It allows designers and validation engineers to transmit valid and invalid traffic to emulate host or device-side serial ATA communications. SATrainer features error injection capabilities that permit observation of device behavior under faulty link conditions.

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BTTracer/Trainer^™.    The BTTracer/Trainer, introduced in the fourth quarter of 2002, combines a Bluetooth protocol analyzer and exerciser into a single CATC Universal Protocol Analyzer System^™ module. The BTTracer/Trainer provides a robust, flexible and efficient integrated environment for Bluetooth developers, testers and verifiers. It can also be upgraded to work with future releases of the Bluetooth specification. The BTTracer/Trainer automatically synchronizes the exerciser with the analyzer to easily capture test results and its interfaces make it simple to inject user defined errors, jitter or write complete verification test suites using a simple scripting language.

USBMobile^™.    The USBMobile Protocol Analyzer is the latest member of our USB development and test tools, introduced in the fourth quarter of 2002. The industry’s first full-featured USB protocol analyzer in PC card format, the USBMobile Protocol Analyzer offers engineers a portable, low-cost solution for accurately and efficiently debugging, testing and verifying Full and Low (Classic) speed USB semiconductors, devices, software and systems. Utilizing a compact PC card format, the USBMobile Protocol Analyzer enables users to perform analysis tasks virtually anywhere—extending beyond the lab environment to personal workstations.

IBTracer 4X^™.    The IBTracer 4X, introduced in the third quarter of 2002, allows engineers to perform product compliance verification testing and perform analysis and problem resolution with the latest Infiniband specification for high-bandwidth server-to-server communication applications.

IBTrainer^™.    The IBTrainer is an InfiniBand 4X exerciser was introduced in the third quarter of 2002. The IBTrainer helps engineers verify the reliability of their products. The IBTrainer can emulate an end-node or generate arbitrary sequences within an InfiniBand 4X network. It also allows engineers to validate compliance with the InfiniBand specification using scripts developed by the InfiniBand Trade Association and available to its members. IBTrainer is an Agilent Technologies product that we sell under our brand name according to the terms of an OEM agreement with Agilent.

Merlin Mobile^™.    The Merlin Mobile, our second-generation Bluetooth protocol analyzer, was introduced in the third quarter of 2002 and has won industry awards for its unique design, simple to use graphical interfaces and robust capabilities. Packaged in a PC card format, the Merlin Mobile is designed for customers concerned about cost and portability. Merlin Mobile provides all the Bluetooth capture and decode capabilities of the Merlin system and its 32MB of recording memory allows customers to quickly pinpoint issues or areas of interest.

Verisys SV-8320^™.    The Verisys SV-8320 was introduced in the first quarter of 2002. The Verisys SV-8320 is a SCSI analysis system that provides fast and accurate debug, test and verification of Ultra320 devices and systems. Its unique combination of power and portability enables OEMs to bring SCSI compatible products to market faster.

SATracer^™.    SATracer, our first generation Serial ATA product, was introduced in the third quarter of 2001. SATracer was our fourth module for the CATC Universal Protocol Analyzer System SATracer is a non-intrusive protocol analysis system that facilitates efficient and accurate debug, test and verification of Serial ATA semiconductors, devices, systems. SATracer also provides Serial ATA traffic capture, display and expert analysis using the CATC Trace software.

USBTrainer^™.    The USBTrainer, our second generation USB test generator product, was introduced in the second quarter of 2001. USBTrainer was our third module for the CATC Universal Protocol Analyzer System, and is easily configured and controlled by a PC via a USB port. The USBTrainer is a development and test tool that serves as a flexible USB host for the development of USB devices, hubs and integrated circuits. The USBTrainer enables stress/limit testing of USB designs and permits observation of design behavior under faulty bus conditions.

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USBTracer^™.    USBTracer, our fifth generation USB analyzer product, was introduced in the second quarter of 2001. USBTracer was our second module for the CATC Universal Protocol Analyzer System. The USBTracer interfaces with standard USB cables and connections to capture and display all speeds of USB bus traffic, providing intuitive and powerful expert analysis with the CATC Trace software.

Merlin’s Wand^™.    Merlin’s Wand, our first generation Bluetooth wireless test generator product, was introduced on the second quarter of 2001. Through its software interface, designers and test technicians are able to quickly and easily issue protocol commands and test sequences emulating different types of Bluetooth devices and to analyze or validate designs to ensure compliance to the Bluetooth specification. When used in conjunction with the Merlin or the Merlin Mobile protocol analyzers, the user has the ability to both generate piconet traffic and record that information as it is generated, which provides for the creation of fully automated test processes.

IBTracer^™.    IBTracer, our first generation InfiniBand protocol analyzer, was introduced in the first quarter of 2001. IBTracer was our first module for the CATC Universal Protocol Analyzer System. IBTracer uses hardware triggering to capture real-time events and hardware filtering to preserve memory and assist in pinpointing data of interest. It is easily configured and controlled by a PC via its USB port. IBTracer interfaces with standard InfiniBand cables and connectors to capture and display high-speed InfiniBand traffic. Recorded data can be searched for specific data, errors or other desired conditions using the intuitive and powerful CATC Trace analysis software.

Universal Protocol Analyzer System^™.    Universal Protocol Analyzer System, our architecture for communications protocol analysis, test and verification, was introduced in the first quarter of 2001. The Universal Analyzer includes a base unit, which utilizes plug-in modules that support multiple protocols and a modular software architecture. The modules observe and capture specific bus and protocol traffic and present it to the user for further analysis. Additional modules allow for generation of both legal and illegal protocol traffic, assisting engineers in exercising their new designs, resulting in improved quality and interoperability of their new products.

Merlin^™.    Merlin, our first generation Bluetooth wireless protocol analyzer, was introduced in the first quarter of 2000. It was the first analyzer for the Bluetooth standard delivered to the market and our first analyzer for wireless communications. Merlin is a non-intrusive design verification system that provides Bluetooth network traffic capture, display and analysis.

Advisor^™.    Advisor, our fourth generation USB bus and protocol analyzer, was introduced in the first quarter of 2000. It was the first USB 2.0 analyzer delivered to the market and builds on our growing experience and knowledge of the development community’s needs. Advisor captures, displays and analyzes signals transmitted at all three USB speeds, 1.5, 12 and 480 Mbps.

Chief ^™.    Chief, our third generation USB bus and protocol analyzer, was introduced in the first quarter of 1999. It incorporates advanced features, including dual channel recording, advanced triggering with event counting and sequencing capability, and automatic class and vendor specific decoding. Chief also incorporates software that operates as a stand-alone viewer and is backward compatible with the capture files from our earlier analyzers, the Detective and Inspector. The Chief Plus version permits simultaneous USB bus traffic generation.

FireInspector^™.    FireInspector, our first generation 1394 bus and protocol analyzer, was introduced in the second quarter of 1998. FireInspector was the first of our bus and protocol analyzers to incorporate our proprietary BusEngine technology. All of our subsequently developed analyzers are based on this modular design. The FireInspector Plus version permits simultaneous 1394 bus traffic generation.

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Production Products

Our production verification systems are also designed to assist computer manufacturers in volume production of reliable devices and systems and software downloads onto new computers. Our production products consist of the following:

EL200^™.    EL200, an industrial device that links USB 2.0 and Ethernet 10/100, was introduced in the first quarter of 2002. The EL200 is used on the production line by computer manufacturers and assembly houses for loading software on the hard drives of newly manufactured systems. The EL200 device connects a computer operating under the DOS operating system to an Ethernet network through a USB 2.0 port. EL200 conforms to both USB 2.0 and Ethernet specifications and is capable of speeds ten times faster than the previous version, the EL2.

UPT2^™.    UPT2, our third generation USB production verification system, was introduced in the fourth quarter of 2001. UPT2 is used as a universal verification system on the production line by integrated circuit, circuit board, computer system and hub manufacturers to verify compliance with USB2.0/1.1 specifications and is capable of testing up to four USB host ports simultaneously.

USB4DOS^™.    USB4DOS, a software product for the DOS operating system, was introduced in the first quarter of 1999. It provides USB support under DOS for production line verification and embedded applications. USB4DOS is either sold separately or bundled with our EL200 product.

HPT^™.    The host production tester, or HPT, our first generation USB port verification system, was introduced in the third quarter of 1996. HPT is used on the production line by integrated circuit, circuit board and computer system manufacturers to verify compliance with USB specifications. It is capable of verifying compliance in computers with one or two USB ports in less than ten seconds.

Connectivity Products

Our connectivity products are designed to assist broadband Internet service providers in delivering convenient and dependable service and device manufacturers in producing reliable products. Our connectivity products consist of the following:

NetMate Plus^™.    NetMate Plus, an integrated USB hub and connectivity device that links USB and Ethernet channels, was introduced in the fourth quarter of 1999. It provides the ability to connect up to four low or full speed USB devices, in conjunction with an Ethernet network, to any USB enabled desktop or portable computer. NetMate Plus, which conforms to both the USB and Ethernet standards, has a transfer rate of more than 6 Mbps.

USB-EL1210A^™.    USB-EL1210A, a USB/Ethernet Controller ASIC, was introduced in the third quarter of 1999. This ASIC combines the functionality of a USB controller and an Ethernet controller. We use EL1210A in our NetMate products and also sell it for use by other commercial connectivity device manufacturers.

NetMate^™.    NetMate, a commercial device that links USB and Ethernet channels, was introduced in the fourth quarter of 1998. It is used primarily for cable and DSL broadband Internet access by suppliers of these services. NetMate provides plug and play connectivity and eliminates the need to insert cards or shut down the system upon connection. NetMate consists of a small hardware device and the associated Windows software that add a standard Ethernet interface to a USB-equipped computer. NetMate has been tested successfully by the Microsoft Windows Hardware Quality Labs to ensure that NetMate meets Microsoft standards for compatibility with the Windows operating systems.

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Customers

Our customers include semiconductor, device, system and software companies and our distributors and value-added resellers. Collectively, our top five customers accounted for approximately 41.6% of our revenue in the year ended December 31, 2002. For the year ended December 31, 2002, Toyo, our primary distributor in Japan, accounted for 18.3% of our revenues and LeColn Technology Co. Ltd., our primary distributor in Taiwan and China, accounted for 10% of our revenues. No other customer accounted for 10% or more of our revenues during the year ended December 31, 2002. In addition, we recognized approximately 59.3% of our revenue from sales to our international customers in the same period.

Marketing, Sales and Distribution

Our marketing efforts focus on developing corporate and product strategies and increasing our brand and product awareness. Our marketing group leads the creation of our strategic corporate direction and develops our product roadmap, including market studies, business potential analysis, competitive positioning, functional requirements and product lifecycle planning. Our product strategy focuses on continuously expanding the capability of our products and the breadth of our product lines to address an increasingly large portion of our customers’ needs. Our brand and product awareness initiatives center on our strategic relationships with the core or promoter companies and also include active participation in communications standards groups, trade shows, compliance workshops and industry conferences. Our marketing group also provides technical and strategic sales support to our direct sales personnel, resellers and international distributors, including in-depth product training, technical manuals, sales tools, pricing, marketing communications, marketing research, trademark administration and other support functions. We intend to continue to focus our marketing efforts on these strategies in the future.

Our sales efforts are dedicated to establishing and maintaining long-term customer relationships. This support emphasizes customer satisfaction and includes the expertise and resources necessary for customers to use our products successfully. We provide product documentation, technical information and software bug fixes through our web site. We intend to continue to provide our customers with comprehensive sales and technical support and believe that this is critical to remaining competitive. We offer software maintenance support contracts for certain of our development products entitling customers to product updates and telephone technical support.

Our distribution channels through 2002 included a direct sales force and a network of distributors, manufacturer’s representatives and value-added resellers. In January 2002, we altered our relationship with our North American resellers by converting them to manufacturer’s representatives and we are now accepting orders directly from our customers while our manufacturer’s representatives provide only sales support. We do not expect this change in relationship to have a significant impact on our future operating results. We have also continued to add North American channel resources as manufacturer’s representatives to support the expansion of our sales efforts.

Our direct sales force maintains close contact with our customers and also provides support to our manufacturer’s representatives. We sell our products in Asia and Europe through distributors. Our direct sales force also maintains close contact with these distributors, which provide both sales and support in the countries they cover. To date, we have established relationships with distributors and manufacturer’s representatives in over 25 countries in Asia, North America and Europe. We are increasingly able to leverage customer satisfaction and our service-oriented approach to gain valuable introductions that have led to additional sales to existing customers and initial sales to new customers. We expect to continue benefiting from this trend in the future. In addition, we intend to expand our distribution efforts by pursuing relationships with additional distributors and manufacturer’s representatives in our current markets and with new distributors and manufacturer’s representatives in our future markets. Managing our distribution channels has become more complex as we have expanded both our product lines and our geographic presence. As a result, it has also become increasingly critical that we optimize our distribution channels around complementary products and users.

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Research and Development

We believe that our future success depends, to a large extent, upon our ability to develop new products for established and emerging communications standards and to add improved features to our existing products. Our research and development efforts are focused on the development of technology and products that will enhance our position in our future markets.

As of December 31, 2002, we employed 28 people in our research and development organization. Our research and development team is comprised of hardware and software design engineers with expertise in the design and application of computer and communications systems and devices, semiconductor devices, embedded software, software drivers and software applications. As part of our research and development activities, we are also engaged in formal and informal relationships with our customers worldwide as well as special interest groups for emerging communications standards. Our research and development expenses were approximately $7.4 million in the year ended December 31, 2002, $7.3 million in the year ended December 31, 2001, and $4.9 million in the year ended December 31, 2000.

Technology

We believe that we have a competitive advantage as a result of our knowledge and expertise covering multiple communications standards, computer and software architecture and advanced ASIC and programmable logic design. This expertise is enhanced by our advanced design tools and collaboration among our various design teams. The following is a summary of our technology position:

Vertically Integrated Technology.    We have a broad, vertically integrated technology base that includes the knowledge and expertise to:

This technology base, coupled with the specific experience gained by designing previous generations of our products, enables us to provide reliable, easy to use and cost-effective products.

Expertise in Multiple Standards.    We have expertise in several communications standards including Bluetooth wireless technology, Ethernet, Fibre Channel, IEEE 1394, InfiniBand, PCI Express, SCSI, Serial ATA and USB and intend to extend our technology base to support additional emerging standards. We believe that our broad technology base allows us to quickly apply the expertise and technology incorporated in our existing product lines to new standards and products.

Computer Architecture and Software.    We have expertise in computer architecture and software, including all forms of internal and external device connectivity. Our products have a large software content at various levels, from embedded software to software drivers to software applications, and for different devices, computers and operating systems, such as DOS, Windows, Linux and Unix. Our computer architecture and software expertise allow us to bring easy to use, reliable and flexible products to market rapidly.

Semiconductor and Programmable Logic Design.    Our ability to integrate a complex design into an ASIC results in a product that we believe offers higher performance at lower power levels and lower cost than those products otherwise commercially available. The combination of programmable logic design techniques and non-volatile, or flash, memory adds flexibility and reliability to our products and allows us to add new features and capabilities to our products.

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Core Technology for Verification Systems.    Our most recent verification systems are based on a common core of software and hardware technology. This technology simplifies and accelerates our development of verification systems for emerging communications standards, thereby reducing our time to market and allowing us to remain an early market mover.

Manufacturing

We use outside contract manufacturing services for printed circuit board fabrication, assembly and testing. We outsource the manufacture of our lower volume, higher margin products to several facilities located in the Silicon Valley area. We conduct final assembly, testing and quality assurance at our facility in Santa Clara, California. We outsource the turnkey manufacturing and assembly of our higher volume, lower margin products to several facilities located in Asia. This approach enables us to focus on our design strengths, reduce fixed costs and capital expenditures, and provide flexibility in meeting market demand. We do not have long-term contracts with any of our contract manufacturers. We design and develop a number of the key components of our products, including our ASIC, printed circuit boards and mechanical packaging. We also use detail inspection and thorough testing of each product to assure product quality and reliability.

Although we use standard parts and components for our products where possible, we currently purchase a few key components used in the manufacture of our products from single or limited sources. Our principal single source component suppliers include Agilent, Altera, Cypress Semiconductor, Ericsson, Intel, LSI Logic, SMSC, and Xilinx. Currently, purchase commitments with our single or limited source suppliers are on a purchase order basis. Any interruption or delay in the supply of any of these components, or the inability to procure these components from alternate sources at acceptable prices and within a reasonable time, would substantially harm our business. In addition, qualifying additional suppliers could be time-consuming and expensive and might increase the likelihood of errors.

Competition

Our markets are highly competitive, and we expect competition to intensify in the future. We believe that the principal factors of competition are:

We believe that we compete favorably with respect to each of these factors and have gained significant market share in some of our target markets as a result. We believe our success has been driven by our vertically integrated technology, ability to generate customer loyalty and ability to anticipate market trends.

The markets for advanced verification and connectivity products for emerging communications standards are highly competitive. We compete with multiple companies in various markets, including Arca, Frontline, Mobiwave and Tektronix, in the market for Bluetooth wireless technology products, Ancot, Finisar and I-Tech in

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the market for Fibre Channel products, Dap Design and Yokagawa in the market for IEEE 1394 products, Agilent and Finisar in the market for InfiniBand products, Agilent, Catalyst and Data Transit Corporation in the market for PCI Express products, Ancot, Innotech and I-Tech in the market for SCSI products, Data Transit Corporation in the market for Serial ATA products, and Catalyst Enterprises and Data Transit in the market for USB products. In addition to these competitors, we may also face competition from other companies with new technologies or products based on emerging communications standards or large companies that may enter our target markets. Any of these or other potential competitors, as well as our existing competitors, may develop or acquire technologies that address our target markets more effectively and at a lower cost. In addition, these competitors may enter into strategic alliances or business combinations that increase their ability to innovate and address our markets.

Intellectual Property

We rely on a combination of copyright, trademark and trade secret laws to protect our intellectual property. In addition, we have six patents pending. However, we believe that factors such as the creativity and technological skills of our personnel, new product developments, frequent product enhancements, reliable customer service and product maintenance are essential to establishing and maintaining a technology leadership position. Many of our products contain elements that we consider proprietary, including the CATC Trace in our development products and the embedded software and software drivers in our connectivity products. We cannot provide any assurance that other companies will not develop technologies that are similar or superior to our technology. Despite our efforts to protect our intellectual property rights, existing laws and our contractual arrangements provide only limited protection. Unauthorized parties may attempt to copy or otherwise obtain and use our products or technology. Monitoring unauthorized use of our products is difficult, and we cannot be certain that the steps we have taken will prevent unauthorized use of our intellectual property, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States. Expensive litigation may be necessary in the future to enforce our intellectual property rights. Our failure to enforce and protect our intellectual property rights or any adverse change in the laws protecting intellectual property rights could harm our business.

We expect that we will be subject to infringement claims as the number of products and competitors in our markets grows and the functionality of products further overlaps. From time to time, we may receive letters from third parties, including some of our competitors, alleging that our products infringe these parties’ patent or other intellectual property rights. At present, we do not believe that our products infringe any other party’s intellectual property rights. If any claims cannot be resolved through a license or similar arrangement, we could become a party to litigation. The results of any litigation are inherently uncertain. In the event of an adverse result in any litigation with third parties that could arise in the future, we could be required to pay substantial damages, including treble damages if we are held to have willfully infringed, to cease the manufacture, use and sale of infringing products, to expend significant resources to develop noninfringing technology, or to obtain licenses to the infringing technology. In addition, lawsuits, regardless of their success, would likely be time-consuming and expensive to resolve and would divert management time and attention from our business.

We may become involved in legal proceedings against other parties, which may also cause other parties to assert claims against us. We report material pending legal proceedings, if any, under the separate caption “Item 3. Legal Proceedings” elsewhere in this report.

Employees

As of December 31, 2002, we had 68 employees. Of these individuals, 22 were in sales and marketing, 28 were in research and development, 9 were in operations and 9 were in finance and administration. Our employees are not represented by any collective bargaining unit, and we believe our relations with our employees are satisfactory.

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Item 2.    Properties

Our principal executive and administrative offices are located in a leased facility consisting of approximately 14,000 square feet of office space in Santa Clara, California. As of December 31, 2002, we were renting this facility on a month-to-month basis. We believe our existing facilities are adequate to meet our current and projected needs, or that suitable additional or substitute space will be available as needed.

Item 3.    Legal Proceedings

On December 29, 2000, we filed in the United States District Court for the Northern District of California a complaint against Catalyst Enterprises, Inc., alleging trademark and trade dress infringement, copyright infringement and unfair competition and seeking damages and attorneys’ fees. The case is referred to as Computer Access Technology Corporation v. Catalyst Enterprises, Inc., Case No. C 00 4852 DLJ. Catalyst responded to the complaint on April 6, 2001 by denying each of the substantive claims and asserting federal and state unfair competition counterclaims, and requesting an award of attorneys’ fees. We answered the counterclaims on September 27, 2001, and denied all the substantive claims of Catalyst’s counterclaims.

On December 11, 2001, Catalyst filed a motion for partial summary judgment on the issue of trade dress functionality. On January 25, 2002, we filed a motion for judgment on the pleadings or, in the alternative, a special motion to strike Catalyst’s counterclaims. The Court denied Catalyst’s motion and granted our motion for judgment on the pleadings by order entered March 29, 2002, and dismissed each of Catalyst’s counterclaims with prejudice.

The case was tried before a jury, with trial commencing on October 28, 2002. On November 15, 2002, a unanimous jury returned a verdict finding that we own valid trademark rights in our CATC Trace design and that Catalyst infringed our trademark, that Catalyst violated the federal and state unfair competition statutes, and that Catalyst acted willfully when it violated the unfair competition statutes. The jury further found that Catalyst did not infringe our copyright and that we did not prove that our CATC Trace design is protectible trade dress. On November 26, 2002, the Court heard our request for injunctive relief and restitution under federal and state law and, by an order issued the same day, the Court stayed execution of the judgment and deferred ruling on the equitable relief claims pending resolution of Catalyst’s motion for judgment as a matter of law, or alternatively, for retrial.

On January 10, 2003, the Court held a hearing on Catalyst’s motion for judgment as a matter of law or, alternatively, for retrial of the trademark, federal and state unfair competition causes of action. On February 18, 2003, the Court granted Catalyst’s motion for a new trial on the claims of trademark infringement and violation of federal and state unfair competition statutes by Catalyst. The Court furthermore granted our motion for retrial on our claims of copyright and trade dress infringement.

We are currently considering our options and cannot predict the outcome of this litigation at this time.

Item 4.    Submission of Matters to a Vote of Security Holders

None.

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PART II

Item 5.    Market for Registrant’s Common Equity and Related Stockholder Matters

Market Information

Our Common Stock is traded publicly on the Nasdaq National Market under the symbol “CATZ.” Our stock began trading on November 10, 2000. The following table lists the high and low sales prices of our Common Stock for each fiscal period indicated beginning on November 10, 2000:

At March 1, 2003, the approximate number of common stockholders of record was 34.

We have never paid any cash dividends on our capital stock and do not expect to pay any such dividends in the next twelve months.

For the year ended December 31, 2002, the Company used $3.0 million to fund operations, an additional $980,000 for the acquisition of a subsidiary, and we acquired $289,000 of property and equipment. The remaining $34.4 million of net proceeds from our initial public offering was held in various cash, cash equivalent and investment accounts as of December 31, 2002.

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Item 6.    Selected Financial Data

The following selected financial data are qualified by reference to and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this annual report on Form 10-K. The historical results are not necessarily indicative of future results.

Selected Consolidated Financial Data