Delaware		94-2958543
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

5964 W. Las Positas Blvd., Pleasanton, California		94588-8540
(Address of principal executive offices)		(Zip Code)

PART I.    FINANCIAL INFORMATION
Item 1.		Condensed Consolidated Financial Statements (unaudited):
		Condensed Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001		3
		Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2002 and June 30, 2001		4
		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and June 30, 2001		5
		Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		33
PART II.    OTHER INFORMATION
Item 1.		Legal Proceedings		33
Item 2.		Changes in Securities and Use of Proceeds		33
Item 3.		Defaults Upon Senior Securities		34
Item 4.		Submission of Matters to a Vote of Security Holders		34
Item 5.		Other Information		34
Item 6.		Exhibits and Reports on Form 8-K		34

		June 30, 2002				December 31, 2001
ASSETS
Current assets:
Cash and cash equivalents		$	37,144			$	46,338
Short-term investments			—				3,029
Accounts receivable, net of allowance for doubtful accounts of $386 and $6,908 in 2002 and 2001, respectively			863				550
Inventories, net			5,100				11,839
Prepaid expenses and other			2,461				1,742
Total current assets			45,568				63,498
Property and equipment, net			6,717				8,171
Intangibles and other assets			5,949				7,323
Total assets		$	58,234			$	78,992
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	377			$	1,204
Accrued liabilities			9,149				9,856
Deferred revenue			830				954
Total current liabilities			10,356				12,014
Deferred revenue, net of current portion			164				553
Other liabilities			269				329
Total liabilities			10,789				12,896
Commitments and contingencies (Note 6)
Stockholders’ equity:
Common stock, $0.001 par value, 100,000 shares authorized, 16,482 and 16,411 shares issued and outstanding in 2002 and 2001, respectively			16				16
Additional paid-in capital			301,249				301,182
Deferred compensation			—				(17	)
Notes receivable from stockholders			(22	)			(96	)
Accumulated other comprehensive loss			(134	)			(78	)
Accumulated deficit			(253,664	)			(234,911	)
Total stockholders’ equity			47,445				66,096
Total liabilities and stockholders’ equity		$	58,234			$	78,992

		Three Months Ended June 30,								Six Months Ended June 30,
		2002				2001				2002				2001
Revenues:
Product		$	2,314			$	2,494			$	4,476			$	7,144
License and royalty			200				228				396				465
Total revenues			2,514				2,722				4,872				7,609
Cost of goods sold:
Product			6,568				2,543				8,091				24,290
Total cost of goods sold			6,568				2,543				8,091				24,290
Gross (loss) margin			(4,054	)			179				(3,219	)			(16,681	)
Operating expenses:
Sales and marketing			2,466				3,501				4,782				7,326
Research and development			3,499				4,092				6,786				8,774
General and administrative			1,245				2,918				3,203				6,154
Restructuring costs			—				2,092				—				2,092
In-process research and development			—				—				—				1,160
Impairment of intangible assets			—				—				—				2,692
Amortization of intangible assets			299				2,561				599				5,213
Noncash compensation expense			—				61				—				122
Total operating expenses			7,509				15,225				15,370				33,533
Loss from operations			(11,563	)			(15,046	)			(18,589	)			(50,214	)
Impairment of certain equity investments			(592	)			—				(592	)			—
Interest and other income, net			183				1,047				428				2,246
Net loss		$	(11,972	)		$	(13,999	)		$	(18,753	)		$	(47,968	)
Net loss per share, basic and diluted (Note 3)		$	(0.73	)		$	(0.86	)		$	(1.14	)		$	(2.95	)
Shares used in computing net loss per share, basic and diluted (Note 3)			16,455				16,316				16,431				16,261

		Six Months Ended June 30,
		2002				2001
Cash flows from operating activities:
Net loss		$	(18,753	)		$	(47,968	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and other			1,750				2,595
Provision (recovery) for doubtful accounts			(735	)			686
Provision for excess and obsolete inventory and abandoned products			5,124				21,877
Write off of certain equity investments			592				—
Impairment of intangibles			—				2,692
Amortization of intangibles			599				5,213
Write-off of in-process research and development			—				1,160
Change in operating assets and liabilities, net of businesses acquired:
Accounts receivable			422				3,768
Inventories			1,615				(8,507	)
Prepaid expenses and other assets			(610	)			2,683
Accounts payable and accrued liabilities			(1,594