Delaware		77-0073042
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

522 Almanor Avenue, Sunnyvale, CA		94085
(Address of principal executive offices)		(Zip Code)

				Page
Part I.  Financial Information
Item 1.		Financial Statements		1
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		50
Item 4.		Controls and Procedures		51
Part II.  Other Information
Item 1.		Legal Proceedings		51
Item 2.		Changes in Securities and Use of Proceeds		52
Item 3.		Defaults Upon Senior Securities		52
Item 4.		Submission of Matters to a Vote of Security Holders		52
Item 5.		Other Information		52
Item 6.		Exhibits and Reports on Form 8-K		53
Signatures				53
Certifications				54

		September 30, 2002				December 31, 2001
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	2,278			$	15,208
Short-term investments			18,032				27,118
Accounts receivable, net			1,831				1,158
Inventories			2,248				1,894
Other current assets			1,056				1,062
Total current assets			25,445				46,440
Property and equipment, net			7,073				7,285
Long-term investments			16,593				9,058
Investment in GCS			7,500				—
Intangible and other assets			1,058				1,260
Goodwill			834				—
Total assets		$	58,503			$	64,043
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	2,009			$	1,464
Accrued expenses			2,184				1,745
Deferred margin on distributor inventory			2,035				3,631
Accrued restructuring			1,916				2,155
Capital lease obligations, current portion			593				634
Total current liabilities			8,737				9,629
Capital lease obligations and other long-term liabilities			154				401
Stockholders’ equity
Common Stock			30				30
Additional paid-in capital			128,862				128,426
Deferred stock compensation			(996	)			(1,787	)
Accumulated deficit			(78,119	)			(72,656	)
Treasury stock, at cost			(165	)			—
Total stockholders’ equity			49,612				54,013
Total liabilities and stockholders’ equity		$	58,503			$	64,043

		Three Months Ended								Nine Months Ended
		September 30, 2002				September 30, 2001				September 30, 2002				September 30, 2001
Net revenues		$	5,206			$	3,188			$	14,939			$	16,343
Cost of revenues (exclusive of amortization of deferred stock compensation of $48, $110, $32 and $106 for the three and nine months ended September 30, 2002 and three and nine months ended September 30, 2001, respectively)			2,401				7,468				6,022				15,084
Gross profit (loss)			2,805				(4,280	)			8,917				1,259
Operating expenses:
Research and development (exclusive of amortization of deferred stock compensation of $65, $161, $61 and $204 for the three and nine months ended September 30, 2002 and three and nine months ended September 30, 2001, respectively)			1,889				3,116				4,945				7,619
Sales and marketing (exclusive of amortization of deferred stock compensation of $75, $195, $65 and $216 for the three and nine months ended September 30, 2002 and three and nine months ended September 30, 2001, respectively)			1,244				1,365				3,675				4,419
General and administrative (exclusive of amortization of deferred stock compensation of $125, $325, $314 and $621 for the three and nine months ended September 30, 2002 and three and nine months ended September 30, 2001, respectively)			1,241				1,111				3,622				3,340
Amortization of deferred stock compensation			313				472				791				1,147
In-process research and development			2,200				—				2,200				—
Restructuring			(112	)			—				(112	)			—
Total operating expenses			6,775				6,064				15,121				16,525
Loss from operations			(3,970	)			(10,344	)			(6,204	)			(15,266	)
Interest expense			13				26				48				99
Interest income and other, net			245				1,086				789				3,153
Loss before taxes			(3,738	)			(9,284	)			(5,463	)			(12,212	)
Provision for income taxes			—				3,154				—				2,276
Net loss		$	(3,738	)		$	(12,438	)		$	(5,463	)		$	(14,488	)
Net loss per share
Basic		$	(0.13	)		$	(0.42	)		$	(0.18	)		$	(0.50	)
Diluted		$	(0.13	)		$	(0.42	)		$	(0.18	)		$	(0.50	)
Shares used to compute net loss per share
Basic			29,869				29,447				29,837				28,996
Diluted			29,869				29,447				29,837				28,996

		Nine Months Ended
		September 30, 2002				September 30, 2001
Operating Activities
Net loss		$	(5,463	)		$	(14,488	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			2,136				2,091
Deferred tax assets			—				2,277
Retirement of property and equipment			56				—
Abandoned and impaired equipment			—				1,468
Amortization of deferred stock compensation			791				1,147
In-process research and development			2,200				—
Changes in operating assets and liabilities:
Accounts receivable			(519	)			2,500
Inventories			(208	)			5,039
Other assets			(138	)			572
Accounts payable			348				(495	)
Accrued expenses			56