UNITED STATES
                       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 (FEE REQUIRED)

                  For the fiscal year ended September 28, 1996

                                       or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
      EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                 For the transition period from _____ to _______

                         COMMISSION FILE NUMBER 0-22632

                         ------------------------------

                            ASANTE TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its charter)

           Delaware                                      77-0200286
   (State or other jurisdiction             (I.R.S. Employer Identification No.)
 of incorporation or organization)                          

                                  821 Fox Lane
                           San Jose, California 95131
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (408) 435-8388

                         ------------------------------

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $0.001 per share

                         ------------------------------

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 as the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past ninety 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. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant, based upon the closing sale price of the Common Stock on December 5,
1996 as reported on the Nasdaq National Market,  was approximately  $47,788,000.
Shares of Common  Stock held by  officers  and  directors  and their  affiliated
entities  and related  persons  have been  excluded in that such  persons may be
deemed  to  be  affiliates.  This  determination  of  affiliate  status  is  not
necessarily conclusive for other purposes.

As of December 5, 1996,  the  Registrant  had  8,890,742  shares of Common Stock
outstanding.
                         ------------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain  sections of the  Registrant's  definitive  Proxy Statement for the 1997
Annual Meeting of  Stockholders  to be held on February 25, 1997 is incorporated
by reference in Part III of this Form 10-K to the extent stated herein.


<PAGE>



                                TABLE OF CONTENTS


                                                                        Page of
                                                                        Report
                                     PART I

ITEM 1.       BUSINESS                                                      3

ITEM 2.       PROPERTIES                                                   13

ITEM 3.       LEGAL PROCEEDINGS                                            13

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS          14


                                 PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON STOCK AND
              RELATED STOCKHOLDER MATTERS                                  16

ITEM 6.       SELECTED FINANCIAL DATA                                      17

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS                18

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                  24

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
              ACCOUNTING FINANCIAL DISCLOSURE                              39


                                PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT           40
ITEM 11.      EXECUTIVE COMPENSATION                                       40

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT                                               40

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS               40


                                 PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
              REPORTS ON FORM 8-K                                          41

SIGNATURES                                                                 44


<PAGE>


                                     PART I

This discussion, other than the historical financial information, may consist of
forward-looking  statements  that  involve  risks and  uncertainties,  including
quarterly and yearly  fluctuations  in results,  the timely  availability of new
products,  the impact of competitive  products and pricing,  and the other risks
detailed from time to time in the Company's SEC reports,  including this report.
Actual results may vary significantly.

ITEM 1.       BUSINESS

Asante Technologies, Inc. ("Asante" or the "Company"), founded in 1988, designs,
manufactures  and markets  high-performance  computer  networking  products that
address  networking  requirements at the departmental and workgroup level within
corporations  and small  businesses.  The Company  sells its products  primarily
through  distributors and supports this distribution  channel with marketing and
promotional programs and a network of direct sales and service personnel.

There are four trends in computer networking that affect the Company's business:
1) the  adoption  of  switched  Ethernet  technology,  2) the  adoption  of Fast
Ethernet  products,  3) the use of "Intranet"  software  technology in corporate
local area networks, and 4) the gains in market share of Microsoft Windows NTR.

The first  trend is the growth in  commercialization  and  adoption  of Ethernet
switching   technology  as  an  alternative  to  traditional   shared   Ethernet
technologies.  Initially,  switching  products were used primarily within larger
companies  that were the first to  experience  congestion  in their  traditional
network  architectures.  More  recently,  adoption of switching  technology  has
spread to smaller companies. Furthermore, many companies are deploying switching
at all layers of the network:  in the local area network  ("LAN")  backbone,  in
server groups, at the workgroup level, and in direct connections to desktop PCs.
The Company  introduced several new switching products in 1996 and is continuing
to focus  research and  development  resources on the  development of additional
switching products.

Despite  the move to  switching  among  the more  sophisticated  sectors  of the
networking market, the demand for low cost 10Mbps Ethernet  technology from more
price-sensitive  customers  has  continued to grow.  This trend is  particularly
strong  in the  kindergarten  through  grade 12  education  market  in which the
Company has a strong  reputation and product name  recognition.  The adoption by
schools of wide area links to the  worldwide  internet has led to the use of low
cost 10Mbps shared technology for their local area networks.  Schools connecting
to the  internet  for the first time find that they need to install an  Ethernet
LAN and they have favored low cost 10Mbps  solutions.  The Company  continues to
hold a  competitive  position  in the market for 10Mbps  shared  hubs,  and will
continue to deploy  research  and  development  and cost  reduction  engineering
resources to its 10Mbps product line to maintain competitiveness in this market.

The second  trend is the adoption of Fast  Ethernet  (100Mbps)  technology.  The
users of this technology are in two very different sectors of the market:  large
corporations  seeking a solution to congestion  at the "top" of their  networks,
and those using specific vertical  applications  such as publishing,  pre-press,
imaging and  multimedia  who  routinely  transfer  very large files across their
networks.

                                       3
<PAGE>

The Company offers a wide range of 100Mbps Fast Ethernet  shared hubs and cards,
and  anticipates  introducing  100Mbps  switching  products next year.  Its Fast
Ethernet  products are  differentiated  from those of the Company's  competitors
through software utilities that significantly improve the overall performance of
a  Fast  Ethernet   networking   solution.   In  1996, the  Company   introduced
NetDoublerTM,  which optimizes Fast Ethernet performance. The Company has ported
NetDoubler  to Windows NT and will update this product in the near  future.  The
Company has also entered into technology licensing agreements with several other
companies  that  offer  networking  software   solutions.   As  these  companies
incorporate  NetDoubler into their server software, the Company anticipates that
the demand for its desktop portion of the NetDoubler solution will increase, and
in turn, the demand for its NetDoubler-enabled cards and Fast Ethernet hubs will
also increase.

The third trend affecting the market for local area networking  equipment is the
rapid  adoption  of internet  software  for  internal  corporate  networks.  The
resulting "Intranets" are based on web servers and web browser technology.  This
technology  is easily  deployed and the  development  tools offer large gains in
programmer  productivity.  This has  caused  growth in both the  development  of
in-house  corporate  applications based on Intranet  technology,  and efforts by
standard  product  software  companies  to develop  products  based on this same
technology.   Many  corporations   view  Intranet   software   technology  as  a
cost-effective alternative to traditional client-server software architectures.

The fourth trend in the local area  networking  market is the reported growth in
sales and market share for the Microsoft  Windows NT operating  system.  The low
installation and maintenance cost,  scalability,  and compatibility with desktop
versions of Windows have made  Windows NT an  effective  solution for servers in
corporations.

In  response  to these last two  trends,  the  Company  has  developed a Windows
NT-based server software product called  IntraSpectionTM that allows networks to
be managed by any web browser,  thus facilitating the use of Intranet technology
and Windows NT for network  management  solutions.  By using  IntraSpection  for
Window NT and Intranet technology, customers may reduce their network management
costs since  Windows NT is a much lower cost  platform  than the Unix  platforms
used for most of the major network  platforms.  In addition,  Intranet  software
tools offer higher programmer productivity, thus allowing customers to customize
the IntraSpection system inexpensively, and IntraSpection allows the customer to
manage all of its  network  resources  using only one  system,  thus  decreasing
network management costs.

The Company  continues to sell Ethernet and Fast Ethernet  adapters to customers
who use Apple Macintosh  computers.  The Company  historically  has been heavily
associated  with, and therefore had a dependence  on, selling  products into the
Apple after-market.  While the Company currently designs its products to work on
all computer platforms and does not rely on new Apple product  introductions,  a
large  portion of its sales in the near term are expected to be related to Apple
products.  Any material  decrease in sales of Macintoshes or other  developments
adversely  affecting  Apple's  business could have a material  adverse effect on
sales of the  Company's  client  access  products,  which would  materially  and
adversely  affect the  Company's  business,  financial  condition and results of
operations.

The Company is dependent on new  products,  specifically  in the switch and Fast
Ethernet areas.  Delays in bringing new products to market would have a material
adverse effect on the Company's financial results and condition.

                                       4
<PAGE>

The Company's success will depend in part on its ability to accurately  forecast
its future sales due to the lead time required to order  components and assemble
products.  If the  Company's  product sales  forecasts are below actual  product
demand,  there may be delays in fulfilling product orders and consequently,  the
Company could lose current and future sales to  competitors.  Alternatively,  if
the Company's product sales forecasts are above actual product demand,  this may
result in excess orders of  components  or assembled  products and a build up in
inventory which would adversely affect working capital.

Industry Segment Information

Asante operates in one industry as described above.


Products

Switch Products
Asante's   switch  family   includes  four  workgroup   switches  for  small- to
medium-sized  networks.  The Asante  5216 Switch is a  high-performance  16-port
segmentation  switch with two 100BASE-TX "fat pipes" for high-speed  connections
to servers or  backbones.  This product helps solve LAN  congestion  problems by
increasing  aggregate  bandwidth  by up to 16 times for a total of 360Mbps.  The
5216xp Switch offers the same port  configuration  as the 5216 switch,  but with
two additional  expansion slots for 100BASE-TX,  100BASE-FX,  or FDDI (single or
dual attach station)  modules.  These modules can be utilized in any combination
or  individually  as  needed.  The  ReadySwitch  5104  and  5104 FX are  smaller
four-port  Ethernet switches offering a single Fast Ethernet uplink for networks
with high  demand for server  access.  The 5104 FX includes a  100BASE-FX  fiber
optic  port,  providing  a  long-distance  backbone  connection  of  up  to  two
kilometers.

100BASE-T (Fast Ethernet) Systems
The Asante Fast 100 Hub is a 100BASE-TX hub providing ten times the  performance
of 10Mbps Ethernet and is targeted for bandwidth intensive graphic,  multimedia,
and  mission-critical   applications.   The  12-port  version  has  a  stackable
architecture  that  supports  up to 180  ports  and  comes  in  intelligent  and
non-intelligent configurations.  The 6-port version is non-intelligent and comes
in  a  non-stackable  form.  Features  include   auto-negotiation  for  seamless
integration of existing 10BASE-T with new 100BASE-T systems. The Asante Fast 100
Hub works with all  personal  computers  equipped  with a 100Mbps  adapter,  and
supports Windows 95TM, Windows NTTM, Novell NetWareTM, Banyan VINESTM, and other
popular network operating systems.

The Asante Fast 10/100 Bridge integrates  100Mbps Fast Ethernet  workgroups into
existing  10Mbps  networks  by  segmenting  network  traffic  through the use of
filtering and forwarding data packets. It is compatible with any 100BASE-TX Fast
Ethernet  hub  and  includes  auto-negotiation,  LEDs  for  network  performance
indication, and supports the network operating systems mentioned above.

The Asante  Fast 100  Management  Module  provides  network  management  of Fast
Ethernet  and  10BASE-T  networks  in order to  determine  network  performance,
traffic  bottlenecks,  collisions and other vital signs.  The Management  Module
fully  integrates with the Asante Fast 100 Hub shared backplane with a key-sized

                                       5
<PAGE>

expansion  card so that it  snaps  on top of the hub  eliminating  the  need for
external  cabling.  The module's  built-in  simple network  management  protocol
("SNMP") support enables the  interconnected hub stack to be managed as a single
logical repeater and controlled from any workstation  running AsanteView network
management software or from any SNMP-compatible or Telnet console.

10BASE-T Systems.
The NetStackerTM is a dual-slot, two-segment,  intelligent Ethernet concentrator
that gives the user the flexibility of a multi-slot chassis with the convenience
of a stackable  hub.  Up to three  NetStacker  units can be snapped  together to
support up to 72 users via 10BASE-T  connections.  Each chassis accommodates two
multi-port  repeater  modules  for  10BASE-T,  10BASE-2  and  10BASE-F  Ethernet
connectivity.  A  two-port  Ethernet  bridge  module  may  be  installed  in any
available chassis slot to segment and isolate network traffic. The NetStacker is
also available with an SNMP-based  network  management  module and is manageable
with IntraSpection and AsanteViewTM Network Management software.

The  AsanteHub   2072,  an  expandable,   seven-slot,   chassis-based,   72-port
intelligent hub offers departmental network managers  enterprise-level  features
at a  departmental  price.  It has a  seven-slot  architecture  that  allows the
addition of a variety of multi-port  repeater  modules  (10BASE-T,  10BASE-2 and
10BASE-F),  a bridge module and an SNMP-based network management module. Network
growth can be accommodated  simply,  inexpensively  and on an as-needed basis by
inserting new modules.  A dual segment  backplane  allows the network manager to
create two completely  separate  networks within the AsanteHub 2072's chassis to
segment traffic and optimize network  efficiency.  When combined with AsanteView
network  management  software,  this hub  provides  centralized  management  and
diagnosis and can be operated  both locally and remotely to  configure,  control
and set alarms for the hub from a personal  computer.  The  Company  also offers
dual  redundant  power  supplies  for  the  AsanteHub  2072  for  fault-tolerant
applications.

The  10T  Hub/8,   /12,  /24  and  BNC  Hub/6  are  a  family  of   inexpensive,
non-intelligent  Ethernet hubs for connecting personal  computers,  workstations
(including  UNIX),  network printers and other network  resources to an Ethernet
network.  These  systems are used for creating  small  networks or extensions to
existing  networks.  They allow network  managers to use  economical  unshielded
twisted pair (UTP) telephone wire instead of coaxial cable to set up their LANs,
and support all major network operating systems and hardware configurations.

Software Products
Asante currently  offers two network  management  options.  IntraSpection is the
Company's  new  Web-based  network  management  program,  providing  users  with
customized  management solutions and support for every SNMP-based network device
on the market.  IntraSpection's  customized  support is available through Asante
plug-in   Personality   Modules   that  are  sold  as  additions  to  the  basic
IntraSpection   software.   Furthermore,   because   IntraSpection   allows  for
programming in HTML and Java instead of the customary C++,  network managers can
quickly  create  customized  management  modules  on  their  own,  a  capability
previously not available in the  networking  industry.  The basic  IntraSpection
software is available at no cost to everyone via the Company's  internet site at
www.asante.com.  The Company has a patent pending on the IntraSpection  software
technology.

AsanteView  is  the  Company's  proprietary  network  management  software  that
operates  with the SNMP  protocol.  Using  AsanteView  with an  AsanteHub  1016,
NetStacker  or 2072,  a network  manager can


                                       6
<PAGE>

monitor  and  control  the  network.  AsanteView  enables  the manager to gather
network statistics, monitor network performance, pinpoint bottlenecks and errors
and optimize network  performance.  The graphical user interface conveys network
information at a glance.  AsanteView  offers both local and remote  capabilities
and  permits  management  of up to  twelve  Asante  hubs at the same time from a
single management station.

Asante has developed  multiple  versions of its network  acceleration  software,
NetDoubler.  Providing a high-performance  solution for publishing and pre-press
networks  when  combined  with  Asante  switched  and  Fast  Ethernet   products
NetDoubler runs on Macintosh computers and most popular servers. The Company has
a patent pending for its acceleration software technology.

Client Access Adapter Products
The Company  offers a broad family of adapters that connect  personal  computers
and high  performance  servers  directly  to  10BASE-T  and  100BASE-T  Ethernet
networks.

Fast  Ethernet  Adapters.  The Asante Fast 10/100  Adapter  provides  all-in-one
compatibility  to  10BASE-T  and  100BASE-TX   Ethernet  networks  for  personal
computers  utilizing  standard PCI bus architecture.  The product plugs into the
PCI slot of the computer and  automatically  configures itself to the system. It
utilizes an "auto-negotiating" feature that senses whether the network hub speed
is 10Mbps or  100Mbps  and sets the  adapter  speed  accordingly.  As such,  the
product allows the customer to migrate from the existing  10BASE-T  network to a
new Fast Ethernet network.  The Asante Fast 10/100 has four LED lights to assist
with trouble shooting and to indicate  connection speed, link integrity and data
traffic.

Adapter Cards for IBM-compatible  personal computers.  The Company's  EtherPaCTM
line of 10BASE-T  Ethernet  client access  products  consists of nine  different
cards,  which support  either ISA, EISA or MCA buses.  All cards support  Novell
NetWare, Windows NT, and other popular network operating systems and protocols.

Adapter Cards for  Macintosh  Computers.  The Company sells an Ethernet  adapter
card and  transceiver  product line  supporting all Macintosh  platforms and all
Ethernet cabling options. The Company also offers AsantePrint which allows older
printers to be connected to 10Mbps networks.


Marketing and Distribution

The Company markets its products through multiple  channels  including  two-tier
distribution  and direct sales to the end-user,  value-added  resellers  (VARs),
system integrators and original equipment  manufacturers (OEMs).  Asante's major
distributors are leading  wholesale  distributors of computer  products in North
America. To supplement the efforts of these distributors  overseas,  the Company
has appointed  international  distributors for specific territories.  All of the
Company's distributors are appointed on a nonexclusive basis.

Asante also sells its client  access and  network  system  products  directly to
university and  educational  institutions  to take advantage of the  significant
penetration  of the  Company's  products in these  markets.  Beginning in fiscal
1996,  the Company  expanded its effort to sell more products to OEM  customers.
The


                                       7
<PAGE>

Company  expects  to enter  into  agreements  in  fiscal  1997 with  larger  OEM
customers,  although  there can be no  assurance  that such  agreements  will be
attained.

Sales to customers  outside the United States accounted for  approximately  23%,
28% and 22% of the  Company's  net sales in fiscal years 1996,  1995,  and 1994,
respectively.  All sales to  international  customers  are  denominated  in U.S.
dollars. The Company expects that international sales will continue to represent
a significant  portion of its net sales.  Accordingly,  the Company's  operating
results  are  subject  to the  risks  inherent  in  international  transactions,
including  changes in regulatory  requirements,  exchange rate fluctuations that
may make the Company's products more expensive to non-U.S.  purchasers,  tariffs
or other barriers.

The Company  believes that it has good  relationships  with its distributors and
intends to continue to introduce new products through its existing  distribution
channels.  The Company encourages the marketing efforts of its distributors with
cooperative advertising allowances and incentive-based rebates, and promotes its
products  and builds brand name  recognition  by  extensive  trade  advertising,
participation  in industry  trade  shows,  and other  marketing  efforts.  As of
September 28, 1996, the Company  supported the sales efforts of its distributors
with 65 direct sales related employees located  throughout the United States who
promote the Company's  products  within  assigned  territories,  and two outside
sales representatives.

The Company's agreements with its distributors can generally be terminated after
an initial term of one year or on short notice without cause, and do not provide
for minimum  purchase  commitments  or preclude the  distributors  from offering
products that compete with those offered by the Company.

The  Company  grants  to  its  distributors  limited  rights  to  return  unsold
inventories of the Company's products in exchange for new purchases and provides
certain price  protection  to its  distributors.  Although the Company  provides
reserves for projected returns and price decreases, any product returns or price
decreases in the future that exceed the Company's reserves will adversely affect
the Company's business,  financial condition and results of operations. See Item
7:  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations.

The  distribution  of  products  such as those  offered by the  Company has been
characterized   by  rapid  change,   including   consolidations   and  financial
difficulties  of  distributors  and the  emergence of  alternative  distribution
channels.  In  addition,  there are an  increasing  number of product  suppliers
competing for access to these channels. Distributors may, at their option and at
any time,  cease  marketing the Company's  products  without prior notice to the
Company.  A  reduction  in the  sales  effort  by any  of  the  Company's  major
distributors or the loss of any one of these  distributors would have a material
adverse effect on the Company's business and results of operations. There can be
no assurance  that future  sales by the  Company's  distributors  will remain at
current  levels  or  that  the  Company  will  be able  to  retain  its  current
distributors on terms that are commercially reasonable to the Company.  Although
the  Company  believes  that its major  distributors  are  currently  adequately
capitalized,  there can be no assurance  that in the future one or more of these
distributors will not experience financial difficulties. Such difficulties could
have a material adverse effect on the Company.

In fiscal 1995,  the Company  changed its limited  warranty  policy to cover all
products for the life of the product.  The Company has not encountered  material
warranty  claims,  although  there  can be no  assurance


                                       8
<PAGE>

that claims will not increase  substantially over time as a result of the change
to a lifetime warranty.  Future warranty claims exceeding the Company's reserves
for warranty  expense could have an adverse  effect on the  Company's  business,
financial condition and results of operations.

Rights under Company  warranties is limited to the Company's rights to repair or
replace  the  defective  product.  The  Company  attempts  to further  limit its
liability  to  end-users  through  disclaimers  of  special,  consequential  and
indirect damages and similar  provisions in its end-user warranty.  However,  no
assurance  can be given  that such  limitations  of  liability  will be  legally
enforceable.


Backlog

The Company  generally  ships  products  shortly  after  orders are received and
consequently  maintains very little backlog.  Accordingly,  the Company does not
believe  that its  backlog as of any  particular  date is  indicative  of future
sales.


Engineering and Product Development

The markets for the Company's client access and network system products continue
to be characterized by rapidly changing technology,  evolving industry standards
and frequent new product  introductions.  Asante  believes that  maintaining its
position in the Macintosh  connectivity market and expanding its presence in the
IBM PC-compatible market requires continuing investment to develop new products,
enhance existing products and reduce manufacturing costs.

As of September 28, 1996,  the Company had 41 employees  engaged in  engineering
and product  development.  During the fiscal  years ended  September  28,  1996,
September  30, 1995,  and  September 30, 1994,  the  Company's  engineering  and
product development  expenses were approximately $6.2 million,  $4.5 million and
$5.5 million, respectively.

The  Company's  believes  its future  success  will  depend  upon its ability to
enhance and expand its  existing  product  offerings  and to develop in a timely
manner new products that achieve rapid market  acceptance.  Substantially all of
the Company's products are designed to provide connectivity to Ethernet LANs. If
the Company is unable for  technological or other reasons to modify its products
or  develop  new  products  to  support  Fast  Ethernet  or  Switched   Ethernet
technology,  or if  Ethernet's  importance  declines as a result of  alternative
technologies,  the  Company's  business,  financial  condition  and  results  of
operations would be materially and adversely affected. There can be no assurance
that the Company will be successful in developing and marketing  enhanced or new
products in a timely manner, that those products will gain market acceptance, or
that the Company will be able to respond effectively to technological changes or
new industry standards.


Manufacturing and Suppliers

The  Company's  manufacturing  operations  consist  primarily  of  managing  its
materials and inventories,  purchasing  certain  components,  performing limited
final  assembly of some products and testing and


                                       9
<PAGE>

performing quality control of certain materials,  components,  subassemblies and
systems.  The Company does not  manufacture  any of the  materials or components
used in its products,  and performs only limited assembly of some products.  The
Company subcontracts substantially all of the assembly of its products through a
related party, Orient Semiconductor  Electronics,  Ltd. ("OSE"), a semiconductor
and printed circuit board  assembler based in Taiwan,  and through several other
subcontractors  and  manufacturers  based in California and Taiwan.  The Company
believes that its quality  control  procedures and the quality  standards of its
manufacturing  partners  have  been  instrumental  in the high  performance  and
reliability  of  the  Company's  products.  To  date,  customer  returns  of the
Company's products due to poor workmanship have not been material. See Note 5 of
Notes to Financial Statements.

OSE and the Company's other  subcontract  manufacturers  purchase or manufacture
most components,  assemble printed circuit boards, and test and package products
for Asante on a purchase  order,  turnkey  basis.  In fiscal  1996,  the Company
purchased $17.9 million of goods from OSE. The Company does not have a long-term
supply  agreement  with  any  of  its  subcontractors.   If  any  one  of  these
subcontractors experience financial or operational difficulties that result in a
reduction or interruption in the supply of products to the Company, or otherwise
fail to deliver  products to the Company on a timely basis, the Company would be
required to procure sufficient manufacturing supply through alternative sources.
The Company believes that alternative manufacturers are available;  however, the
qualification  of such  alternative  sources  and  the  commencement  of  volume
manufacturing of the Company's products could take a significant period of time.
Accordingly,   any  reduction  or  interruption  of  supply  from  its  existing
subcontractors  would  materially and adversely  affect the Company's  business,
financial condition and results of operations.  In addition,  the use of OSE and
other  offshore   subcontractors  subjects  the  Company  to  certain  risks  of
conducting  business  internationally,  including  changes  in trade  policy and
regulatory requirements,  tariffs and other trade barriers and restrictions, and
changes in the political or economic environment in Taiwan.

Although  the Company  generally  uses  standard  parts and  components  for its
products,  certain key components  used in the Company's  products are available
from only one  source and others  are  available  from only a limited  number of
sources.  Components  currently  available from only one source  include,  among
others,  custom integrated circuits used in the Company's  intelligent hubs. The
Company does not have a long-term  supply  agreement  with any of its suppliers.
The Company  believes that certain key  components  remain in short supply,  and
from time to time receives only limited  allocations  of these products which in
prior years has caused shipping delays of one or more of the Company's products.
If the Company or any of its  suppliers  experience  component  shortages in the
future or any of its competitors have long-term supply agreements under which it
is possible  for them to obtain  greater  supplies of such  components  than the
Company,  the Company's business,  financial condition and results of operations
could be materially and adversely  affected.  The Company also relies on OSE and
subcontractors to procure many of the components used in the Company's products.
Procurement  and  stocking  of  components  and  subassemblies  is done by these
subcontractors  based on the Company's  purchase orders. If the Company,  OSE or
other  subcontractors are unable to obtain sufficient  supplies of components or
develop  alternative  sources,  delays or reductions in product  shipments could
result,  which would  materially  and adversely  affect the Company's  business,
financial   condition  and  results  of  operations  and  damage  the  Company's
relationships with its customers.

                                       10
<PAGE>

Competition

The markets for the Company's products are highly  competitive,  and the Company
believes  that such  competition  will  intensify.  Competitive  factors  in the
Company's  markets are continuing  declines in average selling  prices,  coupled
with improvements in product features and performance.  The Company expects such
trends will continue.

In the mainstream market, the Company competes with Cisco Systems, Bay Networks,
3Com, and many smaller  companies.  Competition  from these and other companies,
including  new  entrants,   is  expected  to  intensify,   particularly  in  the
departmental users market. Many of the Company's  competitors in this market are
more  established,  enjoy  significant  name recognition and possess far greater
financial, technological and marketing resources than the Company.

The Company  believes  the  principal  competitive  factors in the  departmental
connectivity  market are brand  name  recognition,  value for price,  breadth of
product line,  technical features,  ease of product use,  reliability,  customer
support  and the  ability to develop  and  introduce  new or  enhanced  products
rapidly.  The Company believes that it currently competes favorably with respect
to these factors.  There can be no assurance,  however, that the Company will be
able  to  compete   successfully   in  the  future  against  current  or  future
competitors,  or that it will be able to adapt  successfully  to  changes in the
market for its products.  The Company's inability to compete successfully in any
respect or to timely  respond to market demands or changes would have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

In the Macintosh client access market,  Apple develops and markets products that
compete  directly with certain of the  Company's  client  access  products.  The
Company also  competes  with a number of other  companies in this market.  Apple
provides  Ethernet  connectivity in its computers  which has adversely  affected
sales of the  Company's  client access  products.  The Company also relies on an
informal  working  relationship  with  Apple in  connection  with the  Company's
product  development   efforts.   Apple  is  likely  to  continue  to  introduce
competitive  products,  and has significantly  greater financial,  marketing and
technical  resources  than the Company.  Furthermore,  no assurance can be given
that  Apple  will  not  pursue  a  more  aggressive  strategy  with  respect  to
competitive  products,  increase the availability of Ethernet on the motherboard
of its computers or in other ways attempt to make the sale of add-on products by
third party developers and vendors such as the Company more difficult.  If Apple
takes any of such  actions,  the  Company's  business,  financial  condition and
results of operations  would be materially and adversely  affected.  See Item 7:
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

The Company expects that a growing portion of the Company's sales will represent
products sold to OEMs.  While the Company's  OEM sales were  previously  made to
smaller  OEMs,  the Company has recently  pursued,  and will continue to pursue,
additional OEM agreements with larger companies.  There can be no assurance that
existing OEM agreements  will continue or that new agreements  will be attained.
In addition,  since the Company intends to seek additional  large product volume
arrangements,  the loss of a single  large OEM  customer or several  smaller OEM
customers would have a material adverse effect on the Company's revenues.

                                       11
<PAGE>

A significant percentage of the Company's sales in fiscal 1996 were derived from
products designed for use with Macintosh computers. Sales of these products as a
percentage of total Company revenue have steadily declined over the last several
years due to  Apple's  competition  in the  Company's  adapter  card  market and
Apple's decline in market share.  However the Company expects that sales of such
products will  continue to represent a substantial  portion of its net sales for
the  foreseeable  future.  There can be no  assurance  that unit  sales of these
products will continue at their  present  levels or increase in the future.  Any
material adverse  developments in Apple's business could have a material adverse
effect on sales of the Company's client access products,  which would materially
and adversely affect the Company's business,  financial condition and results of
operations.  See Item 7:  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations.


Proprietary Rights

The  Company   has   received  in  the  past  and  may  receive  in  the  future
communications from third parties asserting intellectual property claims against
the  Company.  For  example,  a claim made  against the Company by Bay  Networks
(formerly  SynOptics  Communications)  in fiscal  1994  required  the Company to
devote  significant  resources to defend  against the claim.  Claims made in the
future could include  assertions that the Company's  products  infringe,  or may
infringe,   the   proprietary   rights  of  third   parties  or   requests   for
indemnification  against such  infringement.  There can be no assurance that any
claim will not result in litigation,  which could involve significant expense to
the  Company.  If the Company is required  or deems it  appropriate  to obtain a
license relating to one or more products or future technologies, there can be no
assurance  that the Company  would be able to do so on  commercially  reasonable
terms, or at all.

The Company  relies on a combination  of trade  secret,  copyright and trademark
law,  nondisclosure  agreements and technical  measures to establish and protect
its proprietary  rights in its products.  Despite these  precautions,  it may be
possible  for  unauthorized  third  parties  to copy  aspects  of the  Company's
products  or  to  obtain  and  use  information  that  the  Company  regards  as
proprietary. Policing unauthorized use of the Company's technology is difficult,
and there can be no assurance  that the measures being taken by the Company will
be successful.  Moreover,  the laws of some foreign countries do not protect the
Company's  proprietary  rights in its products to the same extent as do the laws
of the United States. See Item 3: Legal Proceedings.


Employees

As of  September  28,  1996,  the Company  had 197  employees,  including  41 in
engineering  and product  development,  44 in  manufacturing  operations,  79 in
marketing, sales and support services, and 33 in corporate administration.

During fiscal 1996, the Company  appointed a new Chief  Financial  Officer and a
new Vice  President of Sales.  The Company's  future  success will depend on the
effectiveness  of its executive  officers in their new roles.  In November 1996,
the Company appointed a new Vice President of Engineering.

The  Company's   success  also  depends  to  a   significant   extent  upon  the
contributions  of other key  sales,  marketing,  engineering  and  manufacturing
employees,  and on the Company's  ability to attract and retain


                                       12
<PAGE>

highly qualified  personnel,  who are in great demand. None of the Company's key
employees is subject to a  non-competition  agreement  with the Company.  Unless
vacancies  are  promptly  filled,  the  loss of  current  key  employees  or the
Company's  inability  to attract and retain  other  qualified  employees  in the
future could have a material adverse effect on the Company's business, financial
condition and results of operations.

None of the Company's employees is represented by a labor organization,  and the
Company is not a party to any collective bargaining  agreement.  The Company has
never had any employee  strike or work stoppage and considers its relations with
its employees to be good.


ITEM 2.       PROPERTIES

The  Company's  headquarters,  including  its  executive  offices and  corporate
administration,   manufacturing,   marketing,   sales  and   technical   support
facilities,  are  located in San Jose,  California.  The Company  occupies  this
facility  under a lease that  expires in  September  1997 and  provides  for two
options  to  extend  the  lease  for up to an  additional  two and  five  years,
respectively; during fiscal 1996, the Company exercised its option to extend the
lease for an additional two years.  The Company leases sales offices in Southern
California,  Colorado,  North Carolina,  Utah,  Washington,  Taiwan, England and
Japan.  The Company  believes that its existing  facilities are adequate to meet
its  requirements  for the  foreseeable  future and that suitable  additional or
substitute  space will be available as needed.  See Note 8 of Notes to Financial
Statements.


ITEM 3.       LEGAL PROCEEDINGS

In  November   1994,   the  Company   reached  an   agreement   with   SynOptics
Communications, Inc. (now Bay Networks, Inc.) to settle the complaint brought by
SynOptics  against  the  Company  for patent  and  copyright  infringement,  and
misappropriation  of trade  secrets.  The terms of the settlement did not have a
material impact on the Company's financial condition or results of operations.

In July and August of 1994,  several  complaints  were filed against the Company
and certain of its  current  and former  officers  and  directors  in the United
States District Court,  Northern District of California,  alleging violations of
federal securities laws. The lawsuits, which purport to be class actions brought
on behalf of all  purchasers  of the  Company's  stock  during the  period  from
December 10, 1993 through July 11, 1994, were  consolidated and plaintiffs filed
a consolidated, amended class action complaint on October 21, 1994. In September
1995, the Company entered into an agreement in principle to settle the suit with
the establishment of a settlement fund of $2.6 million.  The Company contributed
$520,000,  with the remainder funded by the Company's insurance. On November 18,
1996, the Court entered an order finally approving the settlement and dismissing
the  action  against  all  defendants  with  prejudice.  See  Note 9 of Notes to
Financial Statements.

On September  13, 1996, a complaint was filed by Datapoint  Corporation  against
the   Company   and  six  other   companies   individually   and  as   purported
representatives of a defendant class of all manufacturers,  vendors and users of
Fast Ethernet-compliant,  dual protocol local-area network products, for alleged
infringement of United States Letters Patent Nos.  5,077,732 and 5,008,879.  The
complaint  seeks


                                       13
<PAGE>

unspecified  damages in excess of $75,000 and permanent  injunctive  relief. The
Company has not yet filed a response to the Complaint, and no discovery has been
taken. The Company intends to defend the action vigorously.


ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of 1996.


EXECUTIVE OFFICERS OF THE COMPANY

The  executive  officers of the Company,  their ages as of November 20, 1996 and
certain information regarding each of them are as follows:

       Name              Age          Position with the Company
       ----              ---          -------------------------
Jeff Yuan-Kai Lin        45      President and Chief Executive Officer
Wilson Wong              49      Vice President and General Manager
James Cansler            49      Vice President of Sales
Tommy Leung              53      Vice President of Engineering
William Leung            56      Vice President of Operations
Robert Sheffield         47      Vice President of Finance,
                                 Chief Financial Officer, and Secretary
Paul Smith               38      Vice President of Marketing
Philip Wang              52      Vice President of Engineering


Mr. Lin co-founded the Company in 1988 and currently serves as President,  Chief
Executive  officer and Co-Chairman of the Board of Directors.  From 1993 through
1994, he served as Vice President,  General Manager of Network Systems Business.
From 1991 to 1993, he served as the Company's Chairman of the Board of Directors
and Chief Operating Officer.  From 1988 to 1991, Mr. Lin served as the Company's
Vice  President of  Operations  and  Engineering,  Chief  Financial  Officer and
Secretary.

Mr. Wong  co-founded  the Company in 1988 and  currently is Vice  President  and
General Manager and Co-Chairman of the Board of Directors. From 1993 to 1994, he
served as Vice  President and General  Manager for the  Company's  client access
products.  From 1988 to 1993,  he served as the  Company's  President  and Chief
Executive Officer.

Mr.  Cansler  joined  the  Company in March  1996 and  currently  serves as Vice
President  of  Sales.  From  1993 to 1995 he was Vice  President  of  Sales  and
Marketing for the systems division of National Semiconductor Corporation. During
1993,  and from  1991 to 1993,  he served as Chief  Executive  Officer  and Vice
President of Marketing and Sales, respectively, of SysKonnect, Inc.

                                       14
<PAGE>

Mr. Tommy Leung has served as Vice President of Engineering  since November 1996
when Mr.  Wang  resigned.  He joined  the  Company  in March  1994 and served in
various  capacities  including  Director  of  Client  Access  Engineering,  Vice
President of Client Access  Engineering  and Vice President of Technology.  From
1989 to 1994 he was Chief Executive Officer of Datatrek Corporation.,  which was
purchased by Asante. Mr. Tommy Leung is not related to Mr. William Leung.

Mr.  William  Leung  joined the  Company  in August  1995 as Vice  President  of
Operations.  From  December  1987 to August  1995,  he was  President  and Chief
Executive Officer of Cache Computers,  Inc., a manufacturer of mother boards for
personal computers. Mr. William Leung is not related to Mr. Tommy Leung.

Mr.  Sheffield  joined the  Company in March 1996 and  currently  serves as Vice
President of Finance, Chief Financial Officer, and Secretary.  From 1994 to 1995
he  served  as  Vice   President  of  Business   Development   for  Time  Warner
Interactive/Atari  Games  Corporation.  From  1989  to 1994  he  served  as Vice
President   of   Finance   and   Chief   Financial   Officer   of  Time   Warner
Interactive/Atari Games Corporation.

Mr. Smith joined the Company in May 1995 as Vice  President of  Marketing.  From
1994 to 1995 he was Chairman and Chief  Executive  Officer of Holosoft,  Inc., a
developer of application  software for Personal  Digital  Assistants.  Mr. Smith
continues as Chairman of Holosoft.  From 1993 to 1994, he was Vice  President of
Product  Development  and  Manufacturing  at  Virtual   Microsystems,   Inc.,  a
manufacturer  of high  performance  CD-ROM servers and internet  access devices.
From 1988 to 1993 he held senior management  positions  including Vice President
of Marketing at Proxim, Inc., a manufacturer of wireless networking devices.

Mr. Wang joined the Company in January 1995 as Vice  President  of  Engineering.
From 1990 to 1995,  he was  President  and Chief  Technology  Officer of Network
Application  Technology,  Inc.,  a  manufacturer  of  computer  inter-networking
equipment that he founded.  Mr. Wang resigned from his position with the Company
in November 1996.


                                       15
<PAGE>

                                     PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED 
                  STOCKHOLDER MATTERS

The  following  table sets forth the high and low sale prices for the  Company's
Common Stock as reported on the NASDAQ  National Market under the trading symbol
ASNT for the Company's last two fiscal years.

Fiscal 1996                          High                      Low
--------------------------------------------------------------------
First quarter                       14 1/2                    7 7/8
Second Quarter                       8 1/8                    5 7/8
Third quarter                        9 1/4                    5 1/8
Fourth quarter                       7 1/4                    5 1/8


Fiscal 1995                          High                      Low
--------------------------------------------------------------------
First quarter                        5 1/2                    4
Second Quarter                       5 3/8                    3 7/8
Third quarter                        5 1/8                    3 1/8
Fourth quarter                       8 1/4                    4 1/4


As of December 5, 1996,  there were 120  stockholders of record of the Company's
Common  Stock.  The Company has not paid cash  dividends on its Common Stock and
does not plan to pay cash  dividends in the  foreseeable  future.  The Company's
bank line of credit  restricts  the Company from  declaring any dividends on the
Common Stock. See Note 4 of Notes to Financial Statements.

Factors such as announcements  of  technological  innovations or new products by
the  Company,  its  competitors  and other  third  parties as well as  quarterly
variations  in the Company's  anticipated  or actual  results of operations  and
market conditions in high technology industries generally,  may cause the market
price of the Company's Common Stock to fluctuate significantly. In addition, the
stock market has on occasion  experienced extreme price and volume fluctuations,
which  have  particularly  affected  the market  prices of many high  technology
companies  and have often been  unrelated to the operating  performance  of such
companies. These broad market fluctuations may adversely affect the market price
of the Company's Common Stock.


                                       16
<PAGE>
<TABLE>
ITEM 6.                                                SELECTED FINANCIAL DATA
                                                (in thousands, except per share data)
<CAPTION>

Statement of Operations Data:                                                                    Year ended
------------------------------------------------------------------------------------------------------------------------------------
                                                                       9/28/96       9/30/95       9/30/94      9/30/93      9/30/92
                                                                       -------       -------       -------      -------      -------
<S>                                                                   <C>           <C>           <C>          <C>          <C>     
Net sales                                                             $ 66,990      $ 60,884      $ 79,941     $ 67,283     $ 47,501

Income (loss) from operations                                         $ (1,338)     $ (6,324)     $  1,818     $  4,093     $  3,455

Net income (loss)                                                     $   (457)     $ (3,705)     $  1,125     $  2,101     $  1,826

Net income (loss) per share                                           $  (0.05)     $  (0.45)     $   0.13     $   0.29     $   0.27


Balance Sheet Data:                                                                              Year ended
------------------------------------------------------------------------------------------------------------------------------------
                                                                       9/28/96       9/30/95       9/30/94      9/30/93      9/30/92
                                                                       -------       -------       -------      -------      -------
Total assets                                                           $39,966       $36,767       $40,913      $29,417      $19,362
                                                                                                 
Mandatorily redeemable                                                                           
convertible preferred stock                                               --            --            --        $ 1,948      $ 1,948
                                                                                                 
Stockholders' equity                                                   $26,909       $26,119       $28,389      $ 6,383      $ 4,202
                                                                                                
</TABLE>


                                       17
<PAGE>

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

This discussion, other than the historical financial information, may consist of
forward-looking  statements  that  involve  risks and  uncertainties,  including
quarterly and yearly  fluctuations  in results,  the timely  availability of new
products,  the impact of competitive  products and pricing,  and the other risks
detailed from time to time in the Company's SEC reports,  including this report.
Actual results may vary significantly.

Results of Operations
<TABLE>

The following table sets forth certain selected financial  information expressed
as a percentage of net sales for the fiscal years ended  September 28, 1996, and
September 30, 1995 and 1994, respectively:

<CAPTION>
                                                                       1996             1995              1994
                                                                       ----             ----              ----

<S>                                                                   <C>              <C>               <C>   
Net sales                                                             100.0%           100.0%            100.0%
Cost of sales                                                          60.0             67.2              63.0
                                                                      ------           -------            -----
Gross profit                                                           40.0             32.8              37.0
                                                                      ------           -------            -----
Operating expenses:
   Sales and marketing                                                 28.4             29.2              23.2
   Research and development                                             9.3              7.3               6.8
   General and administrative                                           4.3              6.6               4.7
                                                                      ------           -------            -----
     Total operating expenses                                          42.0             43.1              34.7
                                                                      ------           -------            -----
Income (loss) from operations                                          (2.0)           (10.3)              2.3
Interest and other income (expense), net                                0.9              0.4               0.1
                                                                      ------           -------            -----
Income (loss) before income taxes                                      (1.1)            (9.9)              2.4
Provision (benefit) for income taxes                                   (0.4)            (3.8)              1.0
                                                                      ------           -------            -----
Net income (loss)                                                     (0.7%)            (6.1%)             1.4%
                                                                      ======           =======            =====

</TABLE>

The Company recorded a net loss for fiscal 1996 of $0.5 million,  or ($0.05) per
share  compared to a net loss of $3.7 million,  or ($0.45) per share,  in fiscal
1995.


Net Sales

Net sales  increased 10.0% to $67.0 million in fiscal 1996 from $60.9 million in
1995.  Net sales were $79.9 million in 1994.  The increase in sales from 1995 to
1996 was due primarily to increased shipments of the Company's Fast Ethernet and
new switched products as well as its stackable and unmanaged hubs. This increase
was partially offset by competitive  pricing  pressures and reduced shipments of
the Company's  10T (10 Mbps) adapter cards due in part to Apple's  incorporation
of Ethernet  connectivity  into the  motherboard of certain of its Macintosh and
PowerBook computers.

                                       18
<PAGE>

Sales of network  systems  products  increased  63.1% from  approximately  $21.4
million in 1995 to $34.9  million in 1996 due  primarily  to  shipments  of Fast
Ethernet shared systems and the introduction of switching products into Asante's
product line.  Client access  product sales  declined from  approximately  $39.5
million in 1995 to $32.1 million in 1996, or 18.7%.  Client access  products are
expected to  constitute a smaller  portion of the  Company's  total sales in the
future.

During fiscal 1996, the Company  expanded its line of Fast Ethernet  (100Base-T,
or 100 Mbps) products and  introduced new software  technology to complement the
Fast Ethernet  product line.  The Company  increased its sales force and devoted
additional  resources  to its  research and  development  projects.  The Company
continued to focus its efforts on certain  vertical  market  segments where Fast
Ethernet  systems  excel over  standard  Ethernet  systems and  concentrated  on
expanding its non-Macintosh market incrementally.  Pricing continued to be under
heavy competitive  pressure and, in response,  the Company continued a number of
programs  including discount  programs,  value added reseller programs,  selling
incentives,  educational specific discounts, and announced several product price
reductions during the year.

The decrease in sales from 1994 to 1995 was primarily due to a  continuation  of
the competitive  pressures including Apple Computer's  incorporation of Ethernet
connectivity  into the  motherboard  of certain of its  Macintosh  and PowerBook
computers.  In  addition  to this  and to  competitive  pressures  leading  to a
continuing  reduction in the average  selling  price of certain of the Company's
products, the Company experienced a decrease in sales.

International sales,  primarily to customers in Europe, Canada and Asia Pacific,
accounted for 23.1%,  28.3%,  and 22.4% of net sales in fiscal 1996,  1995,  and
1994,  respectively.  In the third  quarter of 1996,  the Company  established a
sales office in Japan,  complementing its other  international  sales offices in
the  United  Kingdom,  Taiwan,  and  Canada.  Despite  this  increased  presence
internationally,  the Company experienced reductions in sales into Europe caused
primarily  by certain new product  certification  regulations  that  delayed the
Company's  ability to ship  certain of its  products  into  Europe in the second
quarter of the year. As standards continue to evolve in Europe, the Company will
be required to meet new specifications to allow for prompt delivery of products.
The  Company   will   continue  to  focus  its  efforts  on   increasing   sales
internationally  over the next  several  quarters,  but  cannot be sure that its
efforts will be successful.

The Company  believes that the  competition  in the markets in which it competes
has  intensified  and will  continue  to  intensify  as existing  and  potential
competitors  introduce competing products. As such, the Company anticipates that
the selling  prices of its products will continue to decline.  The Company makes
significant  ongoing  efforts to decrease  its  manufacturing  costs faster than
related  declines  in  selling  prices.  If the  Company  is  unable  to  offset
anticipated price declines in its products by reducing its  manufacturing  costs
and by  introducing  new products  that gain market  acceptance,  its  business,
financial  condition and results of operations  will be materially and adversely
affected.

                                       19
<PAGE>

Gross Profit

The Company's  gross profit as a percentage  of net sales  increased to 40.0% in
fiscal 1996 from 32.8% in 1995, and 37.0% in 1994.  This increase  during fiscal
1996  was  due  primarily  to  improved  management  of  production  cycles  and
distribution  channel inventory balances.  The Company's gross profit percentage
increase was partially  offset  during the year by charges  against sales due to
various pricing and marketing programs. The Company's gross profit percentage in
the future will continue to be affected by competitive  pricing  pressures,  the
Company's ability to further reduce the cost of its products,  and the Company's
pursuit of certain OEM sales opportunities at lower margins.

The decrease in gross profit as a percentage  of net sales from 1994 to 1995 was
attributable to several factors including  declines in the demand for certain of
the  Company's  products.  As  a  result,   additional  reserves  for  inventory
obsolescence were made,  resulting in a charge to cost of sales of approximately
$1.5 million in 1995. Additional factors affecting the gross profit was a charge
of $0.3 million related to previously purchased  technology,  charges related to
price  protection  activity,  and sales  during  the first  half of 1995 of $1.1
million of slow-moving products at cost.


Sales and Marketing

Sales and marketing  expenses  increased by 6.9% to $19.0 million in fiscal 1996
from  $17.8  million in 1995.  The 1995  expenses  decreased  by 4.1% from $18.5
million in 1994. As a percentage of net sales, sales and marketing expenses were
28.4%, 29.2%, and 23.2% in fiscal years 1996, 1995, and 1994,  respectively.  In
the fourth  quarter of 1995,  the  Company  increased  its  direct  field  staff
organization  in  order to focus  its  sales  strategy  on  penetrating  the IBM
compatible  market in order to gain market share.  As a result of the additional
sales  personnel  and  additional  vertical  market  and  PC-related   marketing
programs,  the sales and marketing-related  spending level in 1996 was higher in
absolute dollars.

The decrease in sales and  marketing  expenses  from 1994 to 1995 was  primarily
attributable  to lower  advertising  costs,  lower salary expense due to reduced
headcount, and lower commissions due to lower net sales.

The Company expects that its sales and marketing expenses will increase slightly
in 1997.


Research and Development

Research and development  expenses increased by 39.2 % to $6.2 million in fiscal
1996 from $4.5 million in fiscal 1995.  Research and  development  expenses were
$5.5 million in 1994.  As a percentage  of net sales,  research and  development
expenses  were  9.3%,  7.3% and  6.8% in  fiscal  years  1996,  1995  and  1994,
respectively.  The $1.7 million  increase in expenses from 1995 to 1996 resulted
from the Company's  decision to increase its research and development  effort in
order to bring  more Fast  Ethernet  (100Base-T,  or  100Mbps),  switching,  and
software products to market.  As a result,  salaries and wages increased by $0.4
million due to an increase in engineering personnel,  non-recurring  engineering
expense  charges  increased  by $0.3  million,  and  other  expenses,  including
spending for prototype materials,


                                       20
<PAGE>

equipment purchases,  and outside engineering consulting services,  increased by
approximately $0.4 million.

Research and  development  expenses  decreased by $1.0 million from 1994 to 1995
due primarily to the Company's efforts to consolidate  engineering  projects and
reduce operating expenses.

The Company expects that spending on research and  development  will increase in
the future in order to support the development of new products incorporating the
Fast  Ethernet  standard,  switching  technology,  and  cost  reduction  efforts
pertaining to current products.


General and Administrative

General and  administrative  expenses  decreased 28.1% to $2.9 million in fiscal
1996 from $4.0 million in fiscal 1995. General and administrative  expenses were
$3.7 million in 1994. As a percentage of net sales,  general and  administrative
expenses  were  4.3%,  6.6%,  and 4.7% in fiscal  years  1996,  1995,  and 1994,
respectively.  The decrease in administrative expenses in 1996 was primarily due
to the settlement and reduction in related defense  litigation  costs associated
with the  stockholders'  class  action  suit (See  Note 9 of Notes to  Financial
Statements)  and lower salary and other wage  related  expenses due to Company's
effort to control expenses.

The  increase  in  general  and  administrative  expenses  from 1994 to 1995 was
related  primarily to  litigation  costs in connection  with the  aforementioned
stockholders'  class action suit, a one-time  charge  related to state sales tax
audits,  and increased  consulting for services  previously  performed by former
employees.

The Company  expects  that general and  administrative  expenses  will  increase
slightly in 1997.


Income Taxes

The Company has  accounted  for income  taxes in  accordance  with  Statement of
Financial  Accounting  Standards No. 109, "Accounting for Income Taxes", for all
periods. Under this method, deferred assets and liabilities are determined based
on  differences  between  financial  reporting  and  tax  bases  of  assets  and
liabilities  and are measured  using the enacted tax rates and laws that will be
in effect when the  differences  are expected to reverse.  In 1996,  the Company
incurred a loss before income taxes of  approximately  $733,000  resulting in an
income tax benefit (tax loss carryback) of $276,000.

The Company has not  recorded a valuation  allowance  against its  deferred  tax
assets  because  management  believes  that it is more  likely than not that its
deferred tax assets will be  realized.  Realization  is dependent on  generating
sufficient  taxable  income.  The amount of deferred  tax assets  expected to be
realized could be reduced in the near term, resulting in a charge to net income,
if estimates of future taxable income in the carryforward period are reduced.

                                       21
<PAGE>

Factors Affecting Future Operating Results

The  Company  generally  attempts to  maintain  very little  backlog and to ship
products  shortly after orders are received.  Most of the Company's net sales in
any quarter therefore result from orders booked during that quarter. The Company
commits to spending levels,  including  investing in advertising and promotional
programs,  based in part on  expectations  as to future net sales. If future net
sales levels in a particular  quarter do not meet the Company's  expectations or
the  Company  does not  bring  new  products  timely to  market,  the  Company's
operating results will be adversely affected. Furthermore,  although the Company
was profitable in the fourth quarter of 1996, there can be no assurance that the
Company will be able to maintain profitability on a quarterly or annual basis in
the future.

In 1995,  a coalition  of more than one  hundred  companies  (including  Asante)
supplying  adapters,  hubs,  and  other  networking  equipment  developed  a new
standard for increasing the data  transmission  speed over Ethernet  networks by
ten-fold.  This new standard  (100BASE-T,  or "Fast Ethernet") is expected to be
adopted  widely by end-user  customers  because of its  ability to increase  the
efficiency of LANs and because of its ease of integration into existing 10BASE-T
networks.  Because of the importance of this new standard,  the Company recently
focused its research and development  activities on introducing  future products
incorporating  100BASE-T  technology.  The Company  realizes the  importance  of
bringing more 10BASE-T (10 Mbps) switching and 100BASE-T  switching to market in
order to complement its existing 100BASE-T shared products.  In that regard, the
Company's future operating results may be dependent on the market acceptance and
the rate of adoption of this new technology.

The  Company's  net sales and operating  results in any  particular  quarter may
fluctuate  as a result  of a number of  factors,  including  competition  in the
markets for the Company's products,  delays in new product  introductions by the
Company,  market  acceptance  of new  products  incorporating  100BASE-T  by the
Company  or its  competitors,  changes  in product  pricing,  material  costs or
customer  discounts,  the size and timing of customer  orders,  distributor  and
end-user   purchasing   cycles,   variations  in  the  mix  of  product   sales,
manufacturing  delays or  disruptions  in sources of  supply,  general  economic
conditions, and economic conditions and seasonal purchasing patterns specific to
the computer and networking industries.


Liquidity and Capital Resources

During 1996, the Company's  operating  activities  provided cash of $0.9 million
compared  to net cash  provided  of $3.8  million  in 1995.  In 1994,  operating
activities  used cash of $7.1 million  which was  provided by proceeds  from the
Company's  initial public  offering.  During 1996, the increase in cash resulted
from the  increase in accounts  payable  and  decrease in income tax  receivable
resulting from a 1995 loss carryback and was partially offset by the increase in
accounts receivable, inventory, and the reduction in accounts payable to a major
stockholder.  The increase in cash provided from operations in 1995 was due to a
decrease in accounts  receivable,  net of allowances for receivable  accounts of
approximately $6.7 million. Days of sales outstanding decreased to 47 at the end
of fiscal 1996 compared to 49 at the end of 1995.

Net cash provided by investing  activities was $0.4 million in fiscal 1996 which
consisted primarily of net maturities of marketable  securities of $1.7 million,
offset by other  investment  activities  including  purchases  of  property  and
equipment  totaling   approximately  $1.3  million.   The  Company's  purchasing


                                       22
<PAGE>

activities consisted primarily of investments in computers and related equipment
used in the  Company's  operations.  During  fiscal 1996,  1995,  and 1994,  the
Company's purchases of property and equipment totaled $1.3 million, $.5 million,
and $1.0 million, respectively.

Net cash generated  from financing  activities for fiscal 1996 was $0.94 million
including  proceeds of approximately  $1.0 million from the exercise of employee
stock options,  and offset by other financing  activities.  In 1995, the Company
generated cash from financing  activities of $1.1 million including  proceeds of
approximately  $1.0  million  from the exercise of employee  stock  options.  In
fiscal 1994 the Company  generated net cash from  financing  activities of $15.4
million  including  $16.8 proceeds from the Company's  initial public  offering,
proceeds  from stock  option  exercises of $0.5  million,  and was offset by net
repayments under the Company's line of credit  amounting to  approximately  $2.1
million dollars.

At September 28, 1996,  the Company had cash,  cash  equivalents  and short-term
investments of $12.7 million as compared to $12.1 million at September 30, 1995.
Working  capital was $25.1  million at  September  28,  1996,  compared to $24.4
million at  September  30,  1995.  The  Company  has a bank line of credit  that
provides for maximum  borrowings of $5 million,  limited to a certain percentage
of eligible accounts receivable, and bears interest at the bank's base rate plus
1/4%.  The Company's  ability to borrow under this line is subject to compliance
with  covenants  related to financial  performance  and  condition.  The line of
credit  expires on  February  1, 1997.  As of  September  28, 1996 there were no
borrowings under the line of credit,  and the Company was not in compliance with
a certain  financial  covenant.  The Company has received a waiver from its bank
for the noncompliance with this covenant for fiscal 1996.

The Company  believes that its current cash,  cash  equivalents  and  short-term
investments,  together  with cash  expected to be  generated by  operations  and
existing credit  facilities,  will be sufficient to fund its operations and meet
capital  requirements  through  fiscal 1997.  However,  if additional  funds are
required  there can be no assurance  that such funds will be available at all or
on terms favorable to the Company and its stockholders.

See  concentration  of credit risk  section  under Note 1 of Notes to  Financial
Statements.


                                       23
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Index to Financial Statements and Financial Statement Schedule

Financial Statements:
     Report of Independent Accountants                                        25
     Balance Sheets at September 28, 1996 and September 30, 1995              26
     Statements of Operations for the years ended September 28, 1996,
          September 30, 1995 and September 30, 1994                           27
     Statements of Stockholders' Equity for the years ended
          September 28, 1996, September 30, 1995 and September 30, 1994       28
     Statements of Cash Flows for the years ended September 28, 1996,
          September 30, 1995 and September 30, 1994                           29
     Notes to Financial Statements                                            30
     Quarterly Results of Operations (unaudited)                              39

Financial Statement Schedule:
     Report of Independent Accountants on Financial Statement Schedule       S-1
     Schedule II - Valuation and Qualifying Accounts and Reserves            S-2

All  other  schedules  are  omitted,  because  they  are not  required,  are not
applicable,  or  the  information  is  included  in the  consolidated  financial
statements and notes thereto.


                                       24
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Stockholders of 
Asante Technologies, Inc.

In our opinion,  the accompanying  balance sheets and the related  statements of
operations,  of  stockholders'  equity and of cash flows present fairly,  in all
material  respects,  the  financial  position  of Asante  Technologies,  Inc. at
September 28, 1996 and September 30, 1995, and the results of its operations and
its cash flows for each of the three  years in the period  ended  September  28,
1996,  in  conformity  with  generally  accepted  accounting  principles.  These
financial  statements are the  responsibility of the Company's  management;  our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable  assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a reasonable  basis for the opinion  expressed
above.




PRICE WATERHOUSE LLP

San Jose, California
October 25, 1996, except as to paragraph 2 of Note 9, 
  which is as of November 18, 1996


                                       25
<PAGE>
<TABLE>

                                        ASANTE TECHNOLOGIES, INC.

                                             BALANCE SHEETS
                                       (in thousands, except share
                                         and per share amounts)
<CAPTION>
                                                                        September 28,     September 30,
                                                                             1996              1995
                                                                        ------------------------------
<S>                                                                        <C>                 <C>
Assets

Current assets:
     Cash and cash equivalents                                             $12,693             $10,371
     Short-term investments                                                   --                 1,700
     Accounts receivable, net of allowance for doubtful
        accounts, rebates and sales returns of $3,174 and $2,691            10,038               8,504
     Inventory                                                               9,851               7,009
     Deferred income tax                                                     2,972               3,691
     Income tax refund receivable                                            1,558               2,147
     Prepaid expenses and other                                              1,046               1,660

                                                                           -------             -------
                    Total current assets                                    38,158              35,082


Property and equipment, net                                                  1,524               1,362
Other assets                                                                   284                 323

                                                                           -------             -------
                    Total assets                                           $39,966             $36,767
                                                                           =======             =======


Liabilities and stockholders' equity

Current liabilities:
     Accounts payable                                                      $ 7,200             $ 3,275
     Accrued expenses                                                        4,175               4,826
     Payable to stockholder                                                  1,682               2,547

                                                                           -------             -------
                    Total current liabilities                               13,057              10,648
                                                                           -------             -------


Commitments and contingencies (Notes 8 and 9)


Stockholders' equity:
     Common stock, $0.001 par value; 25,000,000 shares authorized;
        8,859,990 and 8,612,420 shares issued and outstanding                    9                   9
     Additional paid-in capital                                             25,313              24,066
     Retained earnings                                                       1,587               2,044

                                                                           -------             -------
                    Total stockholders' equity                              26,909              26,119
                                                                           -------             -------

                    Total liabilities and stockholders' equity             $39,966             $36,767
                                                                           =======             =======

<FN>
    The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>


                                       26
<PAGE>
<TABLE>

                                       ASANTE TECHNOLOGIES, INC.

                                        STATEMENTS OF OPERATIONS
                                          (in thousands, except
                                            per share amounts)
<CAPTION>
                                                                     Year ended
                                               ------------------------------------------------------
                                                September 28,       September 30,      September 30,
                                                     1996               1995                1994
                                               ------------------------------------------------------
                                          
<S>                                              <C>                   <C>               <C>     
Net sales                                        $ 66,990              $ 60,884          $ 79,941
Cost of sales                                      40,220                40,936            50,344

                                                 --------              --------          --------
Gross profit                                       26,770                19,948            29,597
                                                 --------              --------          --------

Operating expenses:
     Sales and marketing                           19,007                17,784            18,547
     Research and development                       6,198                 4,451             5,484
     General and administrative                     2,903                 4,037             3,748

                                                 --------              --------          --------
          Total operating expenses                 28,108                26,272            27,779
                                                 --------              --------          --------

Income (loss) from operations                      (1,338)               (6,324)            1,818
Interest and other income (expense), net              605                   257                89

                                                 --------              --------          --------
Income (loss) before income taxes                    (733)               (6,067)            1,907
Provision (benefit) for income taxes                 (276)               (2,362)              782
                                                 --------              --------          --------

Net income (loss)                                $   (457)             $ (3,705)         $  1,125
                                                 ========              ========          ========


Net income (loss) per share                      $  (0.05)             $  (0.45)         $   0.13
                                                 ========              ========          ========


Weighted average common
     shares and equivalents                         8,997                 8,288             8,773
                                                 ========              ========          ========

<FN>
                    The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>


                                       27
<PAGE>
<TABLE>

                                        ASANTE TECHNOLOGIES, INC.

                                   STATEMENTS OF STOCKHOLDERS' EQUITY
                                  (in thousands, except share amounts)

<CAPTION>
                                                    Convertible                             Additional                   Total
                                                  Preferred Stock         Common Stock       Paid-in      Retained    Stockholders'
                                                 Shares      Amount    Shares     Amount     Capital      Earnings      Equity
                                               -----------------------------------------------------------------------------------
              
<S>                                             <C>          <C>       <C>         <C>       <C>          <C>          <C>    
Balances as of September 30, 1993               1,907,738    $   2     3,350,861   $   3     $  1,754     $  4,624     $ 6,383
                                                                                                                      
Conversion of Convertible Preferred                                                                                   
    Stock to Common Stock                      (1,907,738)      (2)    1,907,738       2                                    --
Conversion of redeemable Preferred                                                                                    
    Stock to Common Stock                                                350,877       1        1,947                    1,948
Initial public offering of Common Stock,                                                                              
    net of issuance costs                                              1,560,044       1       16,821                   16,822
Common Stock issued under stock plans                                    770,544       1          536                      537
Repayment of note receivable                                                                      111                      111
Amortization of deferred compensation                                                             490                      490
Repurchase of restricted stock                                           (64,583)                  --                       --
Tax benefit from employee stock                                                                                       
    transactions                                                                                  973                      973
Net income                                                                                                   1,125       1,125
                                               ----------    -----     ---------   -----     --------     --------     -------
                                                                                                                      
Balances as of September 30, 1994                      --       --     7,875,481       8       22,632        5,749      28,389
                                                                                                                      
Common Stock issued under stock plans                                    736,939       1          953                      954
Repayment of note receivable                                                                      196                      196
Amortization of deferred compensation                                                              17                       17
Tax benefit from employee stock                                                                                       
    transactions                                                                                  268                      268
Net loss                                                                                                    (3,705)     (3,705)
                                               ----------    -----     ---------   -----     --------     --------     -------
Balances as of September 30, 1995                      --       --     8,612,420       9       24,066        2,044      26,119
                                                                                                                      
Common Stock issued under stock plans                                    247,570                  995                      995
Amortization of deferred compensation                                                               2                        2
Tax benefit from employee stock                                                                                       
    transactions                                                                                  250                      250
Net loss                                                                                                      (457)       (457)
                                               ----------    -----     ---------   -----     --------     --------     -------
Balances as of September 28, 1996                      --       --     8,859,990   $   9     $ 25,313     $  1,587     $26,909
                                               ==========    =====     =========   =====     ========     ========     =======
<FN>
                    The accompanying notes are an integral part of these financial statements
</FN>
</TABLE>

                                       28
<PAGE>
<TABLE>

                                               ASANTE TECHNOLOGIES, INC.


                                                STATEMENTS OF CASH FLOWS
                                                     (in thousands)

<CAPTION>

                                                                                                   Year ended                    
                                                                                 ----------------------------------------------
                                                                                 September 28,    September 30,   September 30,
                                                                                     1996             1995             1994
                                                                                ----------------------------------------------
<S>                                                                                 <C>             <C>             <C>       
Cash flows from operating activities:                                                                             
    Net income (loss)                                                               $ (457)         $(3,705)        $  1,125
    Adjustments to reconcile net income to                                                                        
           net cash provided by (used in) operating activities:                                                   
        Depreciation and amortization                                                1,090            1,165            1,234
        Write-off of purchased technology                                             --                289             --
        Amortization of deferred compensation                                            2               17              490
        Deferred income taxes                                                          719             (753)          (1,823)
Changes in operating assets and liabilities:                                                                      
    Accounts receivable                                                             (1,534)           6,719           (3,276)
    Inventory                                                                       (2,842)           2,492             (669)
    Income tax refund receivable                                                       839           (1,879)            --
    Prepaid expenses and other current assets                                          659            1,351              429
    Accounts payable                                                                 3,983           (1,881)          (2,130)
    Accrued expenses and other                                                        (651)            (384)           1,955
    Payable to stockholder                                                            (865)             348           (4,447)
                                                                                    ------          -------         --------
               Net cash provided by (used in) operating activities                     943            3,779           (7,112)
                                                                                    ------          -------         --------
Cash flows from investing activities:                                                                             
    Purchases of property and equipment                                             (1,252)            (473)            (985)
    Purchases of marketable securities                                                --               (985)         (17,150)
    Maturities of marketable securities                                              1,700            4,285           12,150
    Other                                                                               (6)             (71)             (41)
                                                                                    ------          -------         --------
               Net cash provided by (used in) investing activities                     442            2,756           (6,026)
                                                                                    ------          -------         --------
Cash flows from financing activities:                                                                             
    Net proceeds from initial public offering                                         --               --             16,822
    Payment on note receivable from stockholder                                       --                196              111
    Proceeds from stock options exercised                                              995              954              537
    Bank borrowings under line of credit                                              --               --              4,300
    Repayments under line of credit                                                   --               --             (6,359)
    Other                                                                              (58)             (54)             (58)
                                                                                    ------          -------         --------
               Net cash provided by financing activities                               937            1,096           15,353
                                                                                    ------          -------         --------
Net increase in cash and cash equivalents                                            2,322            7,631            2,215
Cash and cash equivalents at beginning of year                                      10,371            2,740              525
                                                                                    ------          -------         --------
Cash and cash equivalents at end of year                                           $12,693          $10,371         $  2,740
                                                                                    ======          =======         ========
Supplemental disclosures of cash flow information:                                                                
    Interest paid during the year                                                  $    11          $    22         $     98
                                                                                    ======          =======         ========
    Income taxes paid (refunded) during the year                                   $(1,835)         $   759         $  1,144
                                                                                    ======          =======         ========
Supplemental disclosure of non-cash financing activies:                                                           
    Conversion of preferred stock into common stock                                $  --           $   --           $  1,948
                                                                                    ======          =======         ========
<FN>                                                                                                              
                The accompanying notes are an integral part of these financial statements                   
</FN>
</TABLE>


                                       29
<PAGE>

                            ASANTE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS


Note 1.           The Company

Asante  Technologies,  Inc. (the "Company") designs,  manufactures and markets a
broad family of 10BASE-T  and  100BASE-T  ("Fast  Ethernet")  client  access and
network system products.  Asante's client access products (which include adapter
cards and media  access  adapters)  connect  Macintoshes,  PCs,  and  peripheral
devices (such as printers) to Ethernet  networks.  The Company's  network system
products,  which include intelligent and  non-intelligent  hubs, bridge modules,
and network  management  software for  Macintoshes and PCs,  interconnect  users
within and between departmental networks.

Sales to historically major distributors/customers were as follows:

                                  1996              1995             1994
                                  ----              ----             ----

Distributor/customer A             27%               21%              33%
Distributor/customer B              -                17%              16%
Distributor/customer C             10%                -                -


International  sales as a percentage of net sales by  geographic  region were as
follows:

                                                     Year ended
                                        -------------------------------------
                                        9/28/96        9/30/95        9/30/94
                                        -------        -------        -------
United States                             77%            72%            78%
Europe                                    11             16             13
Canada and Asia Pacific                   12             12              9
                                        -------        -------        -------
                                         100%           100%           100%
                                        =======        =======        =======

Note 2.           Summary of Significant Accounting Policies

Management estimates and assumptions

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

                                       30
<PAGE>

Revenue recognition
Revenue  is  recognized  upon  product  shipment.  The  Company  grants  certain
distributors  limited rights to exchange products and price protection on unsold
merchandise.  The Company  establishes an estimated allowance for future product
returns  based on historical  returns  experience  and provides for  appropriate
price  protection  reserves at the time the  related  revenue is  recorded.  The
Company also provides a reserve for  incentive  rebates to  distributors  at the
time the related revenue is recorded.

Warranty
The Company accrues the estimated cost of fulfilling its warranty obligations at
the time the related revenue is recorded.

Cooperative advertising
The Company  accrues the estimated cost of  cooperative  advertising at the time
the related revenue is recorded.

Cash, cash equivalents and short-term investments
Cash  equivalents  consist  primarily  of  highly  liquid  investments  in  U.S.
government and corporate debt securities with  insignificant  interest rate risk
and original  maturity  periods of three months or less at date of  acquisition.
The Company  considers all investments  with initial maturity periods of greater
than 90 days to be short-term  investments.  The Company accounts for short-term
investments in accordance with the provisions of Financial  Accounting  Standard
No. 115, "Accounting for Certain Investments in Debt or Equity Securities" ("FAS
115").  At  September  28,  1996,  the  Company  did  not  hold  any  short-term
investments.

Concentration of credit risk
Financial instruments which potentially subject the Company to concentrations of
credit risk consist  principally of unsecured trade  receivables.  The Company's
products  are  primarily  sold to  domestic  distributors  who  have  operations
throughout the world.  The Company  performs  ongoing credit  evaluations of its
customers and maintains  reserves for credit  losses.  At September 28, 1996 and
September 30, 1995, three customers accounted for 41% and 52%, respectively,  of
the accounts receivable balance.

Inventory
Inventory is stated at the lower of standard  cost,  which  approximates  actual
cost (on a first-in, first-out basis) or market.

Property and equipment
Property  and  equipment  are  recorded at cost.  Depreciation  of property  and
equipment is based on the straight-line  method for financial reporting purposes
over the estimated  useful lives of the related assets,  generally three to five
years.  Equipment under capitalized leases is amortized over its useful life and
included in depreciation expense.


                                       31
<PAGE>

Income taxes
The Company accounts for income taxes under the liability method, which requires
recognition of deferred tax assets and  liabilities  for the expected future tax
consequences  of  temporary  differences  between  the tax basis of  assets  and
liabilities and their amounts reported on the financial statements.

Research and development costs
Costs  incurred in the research  and  development  of new software  products and
enhancements  to existing  software  products  are  expensed  as incurred  until
technological feasibility has been established. The Company believes its current
process for developing software is essentially  completed  concurrently with the
establishment of technological feasibility; accordingly, software costs incurred
after the establishment of technological  feasibility have not been material and
therefore have been expensed.

Net income (loss) per share
Net income (loss) per share is computed  using the average  number of common and
common equivalent shares outstanding during the period. Common equivalent shares
include  common  stock  issuable  upon the exercise of stock  options  using the
treasury stock method, except when antidilutive.

Foreign currency
The Company's transactions with foreign suppliers and purchasers are denominated
in U.S. dollars.  As a result,  the Company's exposure to foreign currency gains
and losses is minimal.

Recently issued accounting pronouncements
In  March  1995,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting Standard Number 121 ("FAS 121"),  "Accounting
for the Impairment of Long-lived Assets and for Long-Lived Assets to be Disposed
of." FAS 121 requires  recognition  of impairment  of  long-lived  assets in the
event the net book value of such  assets  exceeds the future  undiscounted  cash
flows  attributable  to such  assets.  FAS 121 is  effective  for  fiscal  years
beginning after December 15, 1995. Adoption of FAS 121 is not expected to have a
materiel impact on the Company's financial position or results of operations.

In October  1995,  the FASB issued  Statement of Financial  Accounting  Standard
Number  123,  "Accounting  for  Stock-Based  Compensation"  ("FAS  123"),  which
establishes  a fair value  method of  accounting  for  stock-based  compensation
plans, and requires additional disclosures for those companies that elect not to
adopt the new method of accounting.  The Company  currently  expects to elect to
continue  to  measure  compensation  costs  using  the  intrinsic  value  method
prescribed by APB Opinion Number 25, "Accounting for Stock Issued to Employees,"
and to comply  with the pro forma  disclosure  requirements  of FAS 123.  If the
Company  makes  this  election,  FAS 123 will have no  impact  on the  Company's
financial statements.

Fair value of financial instruments
For  certain of the  Company's  financial  instruments,  including  cash,  trade
accounts  receivable,  receivable  from  related  party,  accounts  payable  and
capitalized lease obligations,  the carrying amounts  approximate fair value due
to the relatively short maturity of these instruments.


                                       32
<PAGE>


Note 3.           Balance Sheet Components

                                                               (in thousands)

                                                             9/28/96    9/30/95
                                                             -------    -------
Inventory:
         Raw materials and component parts                   $ 3,298    $ 4,081
         Work-in-process                                       1,630        485
         Finished goods                                        4,923      2,443
                                                             -------    -------
                                                             $ 9,851    $ 7,009
                                                             =======    =======

Property and equipment:
         Computer equipment                                  $ 3,286    $ 2,603
         Furniture and test equipment                          3,026      2,457
                                                             -------    -------
                                                               6,312      5,060
         Accumulated depreciation                             (4,788)    (3,698)
                                                             -------    -------
                                                             $ 1,524    $ 1,362
                                                             =======    =======

Accrued expenses:
         Payroll-related expenses                            $ 1,239    $ 1,152
         Sales promotion expenses                              1,077        514
         Other                                                 1,859      3,160
                                                             -------    -------
                                                             $ 4,175    $ 4,826
                                                             =======    =======

Note 4.           Bank Borrowings

The Company has a bank line of credit that provides for maximum borrowings of $5
million,  limited to a certain percentage of eligible accounts  receivable,  and
bears  interest  at the bank's  base rate plus 1/4%.  The  Company's  ability to
borrow  under this line is  subject  to  compliance  with  covenants  related to
financial  performance and condition.  The line of credit expires on February 1,
1997. As of September 28, 1996 there were no borrowings under the line of credit
and the Company was not in compliance  with a certain  financial  covenant.  The
Company  has  received a waiver  from its bank for the  noncompliance  with this
covenant for fiscal 1996.

Note 5.           Related Party Transactions

The Company has an agreement  (the "OSE  Agreement")  with Orient  Semiconductor
Electronics,  Ltd., ("OSE"). OSE and its principal stockholder own approximately
14% of the  Company's  Common  Stock as of  September  28,  1996.  Under the OSE
Agreement,  the Company purchases from and sells to OSE certain component parts,
at cost.  The Company is obligated  to purchase  goods only to the extent it has
signed firm purchase  commitments  with OSE. At September 28, 1996 and September
30, 1995, the Company had firm purchase  commitments  under the OSE Agreement of
approximately $3.5 million and $7.0 million, respectively.

In connection  with the OSE  Agreement  for the years ended  September 28, 1996,
September  30,  1995,  and  September  30,  1994,  the  Company  sold,  at cost,
approximately  $5.5  million,  $1.8 million and $6.3


                                       33
<PAGE>

million,  respectively,  of component  parts to OSE and purchased $17.9 million,
$16.0 million and $21.0 million,  respectively,  of goods from OSE. The decrease
in  component  parts sold to OSE in fiscal 1995 was due to the fact that OSE was
able to purchase component parts directly at lower cost.

In June 1993,  the Company sold  166,666  shares of its common stock to its then
president in consideration for a promissory note in the amount of $500,000.  The
note was secured by a pledge of the Common Stock purchased with no interest due.
In 1994,  $111,000 was paid on the note and the Company  repurchased  the 64,583
unvested shares  following the resignation of the president.  The balance of the
note of approximately $196,000 was paid in July 1995.


Note 6.           Income Taxes

The provision for income taxes is comprised of the following:

                                                     Year ended
                                                   (in thousands)
                                             -----------------------------
                                             9/28/96    9/30/95    9/30/94
                                             -------    -------    -------

Current tax expense (benefit)
         Federal                             $  (995)   $(1,609)   $ 2,058
         State                                  --         --          547
                                             -------    -------    -------
                                                (995)    (1,609)     2,605
                                             -------    -------    -------

Deferred tax benefit
         Federal                                 780       (681)    (1,571)
         State                                   (61)       (72)      (252)
                                             -------    -------    -------
                                                 719       (753)    (1,823)
                                             -------    -------    -------
                                             $  (276)   $(2,362)   $   782
                                             =======    =======    =======

The deferred tax assets (liabilities) are comprised of the following:

                                                               (in thousands)

                                                             9/28/96     9/30/95
                                                             -------     -------
Deferred tax assets
         Receivable- and sales-related reserves               $1,235      $1,263
         Inventory-related reserves                              572       1,750
         Compensation accruals                                   227         123
         Depreciation                                             43         115
         Other                                                   895         440
                                                              ------      ------
Total deferred tax asset                                       2,972       3,691
                                                              ======      ======

The  Company  was able to carry back tax losses in fiscal  1996 and fiscal  1995
which has  resulted  in federal tax  refunds of $1.2  million and $1.6  million,
respectively.

                                       34
<PAGE>

The Company has not  recorded a valuation  allowance  against its  deferred  tax
assets  because  management  believes  that it is more  likely than not that its
deferred tax assets will be  realized.  Realization  is dependent on  generating
sufficient  taxable  income.  The  amount  of  deferred  tax  assets  considered
realizable  could be  reduced  in the near  term,  resulting  in a charge to net
income, if estimates of future  taxable  income in the  carryforward  period are
reduced.

A  reconciliation  of the income tax  provisions  computed at the United  States
federal  statutory  rate to the effective  rate for the recorded  provisions for
income taxes is as follows:


                                                 Year ended
                                         ---------------------------
                                         9/28/96   9/30/95   9/30/94
                                         -------   -------   -------
Federal income tax statutory rate          (34.0)%  (34.0)%   34.0%
State taxes, net of federal tax benefit     (6.1)    (6.1)     6.1
Research and development credit             --       --       (4.0)
Other                                        2.4      1.2      4.9
                                         -------   -------   -------
Effective income tax rate                  (37.7)%  (38.9)%   41.0%
                                         =======   =======   =======

Note 7.           Stockholders' Equity

Preferred Stock
At  September  30, 1993,  the Company had  3,907,738  shares of Preferred  Stock
authorized,  of which  1,907,938  shares  were  issued  and  outstanding  with a
convertible feature (the "Preferred Stock").  The holders of the Preferred Stock
were  entitled  to  non-cumulative  dividends  as  determined  by the  Board  of
Directors.  The Company did not declare or pay dividends on the Preferred Stock.
All  shares  of the  issued  and  outstanding  Preferred  Stock  were  converted
automatically  in conjunction  with the initial public offering of the Company's
Common Stock on December 10, 1993.  After the  conversion,  there were remaining
2,000,000 shares of Preferred Stock issuable by the Board of Directors.  No such
shares of Preferred Stock were issued at September 28, 1996.

Employee Stock Purchase Plans
In September 1993, the Company established the 1993 Employee Stock Purchase Plan
(the "Purchase  Plan").  The Company has reserved 500,000 shares of Common Stock
for issuance to employees  under the Purchase Plan.  Under the Purchase Plan, an
eligible  employee may purchase  shares of Common Stock from the Company through
payroll deductions of up to 10% of his base  compensation,  at a price per share
equal to 85% of the  lesser of the fair  market  value of the  Company's  Common
Stock as of the first day or as of the last day of each  six-month  period under
the Purchase Plan.  Offering  periods commence on August 1 and February 1. Under
the Purchase Plan,  81,587,  66,620,  and 38,312 shares were issued in the years
ending  September  28,  1996,  September  30,  1995,  and  September  30,  1994,
respectively.

Stock Option Plan
In May 1990,  the Company  established  the 1990 Stock  Option Plan (the "Option
Plan").  The Option Plan provides for the granting of incentive stock options to
employees  and  non-qualified  stock options to employees  and  consultants.  At
September 28, 1996,  the Company has reserved  3,597,333  shares of


                                       35
<PAGE>

Common Stock for issuance  under the Option Plan.  Incentive  and  non-qualified
stock options generally have ten year terms and vest over periods  determined by
the Board of Directors, generally four years.
<TABLE>

A summary of all option activity under the Option Plan follows:
<CAPTION>

                                                    Shares available          Options
                                                        for grant           outstanding          Price per share
                                                    ------------------------------------------------------------
<S>                                                    <C>                   <C>                 <C>      
Balance as of September 30, 1993                       2,002,304             1,485,833           $0.11 -  $9.00
Granted                                               (1,377,198)            1,377,198           $5.00 - $11.75
Canceled                                                 898,973              (898,973)          $0.11 - $11.75
Exercised                                                      -              (702,232)          $0.11 -  $5.00
                                                      ----------             ---------
Balance as of September 30, 1994                       1,524,079             1,261,826           $0.11 -  $7.75
Granted                                               (1,364,334)            1,364,334           $3.88 -  $4.63
Canceled                                                 743,092              (743,092)          $0.30 -  $7.75
Exercised                                                      -              (550,460)          $0.11 -  $5.00
                                                      ----------             ---------
Balance as of September 30, 1995                         902,837             1,332,608           $0.11 -  $5.00
Granted                                                 (781,938)              781,938           $5.63 -  $8.00
Canceled                                                 401,777              (401,777)          $2.25 -  $8.00
Exercised                                                      -              (163,983)          $0.11 -  $6.25
                                                      ----------             ---------
Balance as of September 28, 1996                         522,676             1,548,786           $0.11 -  $8.00
                                                      ==========             =========
</TABLE>


Options  for  469,878  shares  were  exercisable  under  the  Option  Plan as of
September 28, 1996.

Directors' Stock Option Plan
In September 1993, the Company established the 1993 Directors' Stock Option Plan
(the "Directors' Plan"). The Company has reserved 300,000 shares of Common Stock
for  issuance  under the  Directors'  Plan.  Under  the  Directors'  Plan,  each
non-employee  director will be  automatically  granted stock options to purchase
40,000 shares of Common Stock on the date he or she first becomes a director. At
the  1996  annual  meeting,  the  stockholders  approved  an  amendment  to  the
Directors'   Plan  pursuant  to  which  each   non-employee   director  will  be
automatically  granted  additional  options for the purchase of 10,000 shares of
Common Stock on the  anniversary  date of his or her election to the board.  The
exercise  price of the option may not be less than 100% of the fair market value
of the Common Stock on the grant date. Options granted under the Directors' Plan
have 10 year terms and vest over a four year period.
<TABLE>

A summary of all option activity under the Directors' Plan follows:

<CAPTION>
                                               Options available          Options             Price per
                                                  for Grant            Outstanding              share
                                               ----------------------------------------------------------
<S>                                                 <C>                  <C>                <C>       
Balance as of September 30, 1993                    140,000              160,000            $7.50 - $9.00
                                                    -------              -------
Balance as of September 30, 1994                    140,000              160,000            $7.50 - $9.00
Granted                                             (40,000)              40,000            $4.63
                                                    -------              -------
Balance as of September 30, 1995                    100,000              200,000            $4.63 - $9.00
Canceled                                             40,000              (40,000)           $7.50
                                                    -------              -------
Balance as of September 28, 1996                    140,000              160,000            $4.63 - $9.00
                                                    =======              =======
</TABLE>

                                       36
<PAGE>


Key Executive Stock Plan
In June 1993,  the Company  established  the 1993 Key Executive  Stock Plan (the
"Key  Executive  Plan").  The Key  Executive  Plan  provides for the issuance of
Common Stock or the grant of options to purchase  Common Stock to key  executive
officers of the  Company.  At September  30, 1993, a total of 571,665  shares of
Common  Stock had been  reserved for and issued  under the Key  Executive  Plan.
Options issued have a term of 10 years,  vest over 4 years and have been granted
at an exercise  price equal to the fair market  value of the Common Stock on the
date of grant.

<TABLE>
A summary of all option activity under the Key Executive Plan follows:

<CAPTION>
                                               Options available         Options             Price per
                                                   for Grant           Outstanding             share
                                               ----------------------------------------------------------
<S>                                                 <C>                  <C>                <C>
Balance as of September 30, 1993                          -               404,999           $3.00 - $9.00
Granted                                             (25,000)               25,000           $5.00
Canceled                                            181,945              (181,945)          $3.00 - $9.00
Exercised                                                 -               (30,000)          $3.00
                                                    -------              --------
Balance as of September 30, 1994                    156,945               218,054           $3.00 - $5.00
Canceled                                             98,195               (98,195)          $3.00 - $5.00
Exercised                                                 -              (119,859)          $3.00
                                                    -------              --------
Balance as of September 30, 1995                    255,140                     -
Granted                                            (267,000)              267,000           $5.63 - $7.38
Canceled                                             18,000               (18,000)          $6.25
Exercised                                                 -                (2,000)          $6.25
                                                    -------              --------
Balance as of September 28, 1996                      6,140               247,000           $5.63 - $7.38
                                                    =======              ========         
</TABLE>

In August 1994, the Board of Directors  offered  non-executive  employees in the
Option Plan and the Key  Executive  Plan the  opportunity  to exchange  existing
options for new options at an exercise price of $5.00,  the fair market value of
the  Company's  common  stock on the date of the  exchange.  Any  vesting in the
canceled  options  was lost,  and the new  options  were  subject  to the normal
four-year  vesting  schedule  under the stock  option  plans.  Under the  offer,
options to  purchase  503,198  shares were  exchanged  under the Option Plan and
options to purchase  25,000 shares were exchanged  under the Key Executive Plan.
The Company has recorded  compensation expense in connection with certain shares
issued and options under its stock and option plans.  Deferred  compensation  of
approximately $740,000,  recorded through September 30, 1993, is being amortized
ratably  over the vesting  periods of such shares and  options.  During the year
ended  September  28,  1996,   September  30,  1995,  and  September  30,  1994,
approximately   $2,000,   $17,000  and  $490,000,   respectively,   of  deferred
compensation was amortized.


Note 8.           Long-Term Obligations, Commitments and Contingencies

The Company has entered into an  operating  lease for its main  facilities  that
expires in September 1997;  however,  the Company has exercised its option under
the  contract to extend the lease for an  additional


                                       37
<PAGE>

two years.  Various other leases for sales offices  expire  throughout  1998 and
1999. Rent expense under operating  leases  aggregated  approximately  $901,000,
$784,000,  and $817,000 for the years ended  September  28, 1996,  September 30,
1995, and September 30, 1994,  respectively.  Certain leases require the Company
to pay a portion of facility operating expenses.

In September  1995, the Company  entered into an agreement to sublease a portion
of its  headquarters  building for a period of two years. The Company expects to
collect approximately $217,000 during fiscal year 1997 under this agreement.

Following  are  minimum  lease  payments  under  non-cancelable  leases,  net of
sub-lease amounts, for the given fiscal years:

                                                              Operating leases
                                                              ----------------
1997                                                            $     807,000
1998                                                                  879,000
1999                                                                  837,000
                                                               --------------
Total minimum lease payments                                    $   2,523,000
                                                               ==============

Note 9.           Litigation

In September  1995, the Company entered into an agreement in principle to settle
the securities class action lawsuits initiated against the Company in July 1994.
As part of the agreement, a settlement fund of $2.6 million was established with
the  Company   contributing   $520,000  and  the  Company's  insurance  carriers
contributing  the balance.  The Company's  portion was accrued for during fiscal
1995 and paid in fiscal 1996.

On  November  18,  1996,  the  Court  entered  an order  finally  approving  the
settlement and dismissing the action against all defendants with prejudice.

On September  13, 1996, a complaint was filed by Datapoint  Corporation  against
the   Company   and  six  other   companies   individually   and  as   purported
representatives of a defendant class of all manufacturers,  vendors and users of
Fast Ethernet-compliant,  dual protocol local-area network products, for alleged
infringement of certain patents. The Company has not yet filed a response to the
Complaint,  and no discovery has been taken.  The Company  intends to defend the
action  vigorously.  The Company  anticipates  that the lawsuit  will not have a
material impact on its financial condition or results of operations.


                                       38
<PAGE>

Quarterly Results of Operations (in thousands, unaudited):

Fiscal 1996                                      Quarter Ended
------------------------------------------------------------------------------
                                    9/28/96    6/29/96     3/30/96    12/30/95
                                   --------   --------    --------   ---------
Net sales                          $ 19,576   $ 16,102    $ 14,808    $ 16,504
Gross profit                       $  7,622   $  6,590    $  5,779    $  6,779
Net income (loss)                  $    402   $   (664)   $   (520)   $    325
Net income (loss) per share        $   0.04   $  (0.08)   $  (0.06)   $   0.03


Fiscal 1995                                      Quarter Ended
------------------------------------------------------------------------------
                                    9/30/95     7/1/95     4/1/95    12/31/94
                                   --------   --------    --------   --------
Net sales                          $ 16,783   $ 14,422   $ 12,213    $ 17,466
Gross profit                       $  6,805   $  5,684   $  3,345    $  4,114
Net income (loss)                  $    572   $    108   $ (3,053)   $ (1,332)
Net income (loss) per share        $   0.06   $   0.01   $  (0.37)   $  (0.17)




ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
              FINANCIAL DISCLOSURE

Not applicable.

                                       39
<PAGE>

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Pursuant to General  Instruction G(3) to Form 10-K, the information  required by
this Item concerning the Company's directors is incorporated by reference to the
information  contained  in the  section  captioned  "Proposal  One - Election of
Directors"  in the  Company's  definitive  Proxy  Statement  for the 1997 Annual
Meeting of Stockholders (the "Proxy  Statement") to be filed with the Commission
within 120 days after the end of the Company's  fiscal year ended  September 28,
1996.

The information  required by this Item concerning the executive  officers of the
Company is incorporated by reference to the information set forth in the section
titled  "Executive  Officers  of the  Company" at the end of Part I of this Form
10-K.

Information  with respect to Directors  and Officers of the Company  required by
Item 405 of Regulation S-K is incorporated  herein by reference from information
set forth under the caption "Filing of Reports by Directors and Officers" in the
Proxy Statement.


ITEM 11.          EXECUTIVE COMPENSATION

Pursuant to General  Instruction G(3) to Form 10-K, the information  required by
this Item is  incorporated  by  reference  to the  information  contained in the
section captioned "Executive Compensation" in the Proxy Statement.


ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Pursuant to General  Instruction G(3) to Form 10-K, the information  required by
this Item is  incorporated  by  reference  to the  information  contained in the
section captioned "Security Ownership" in the Proxy Statement.


ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to General  Instruction G(3) to Form 10-K, the information  required by
this Item is  incorporated  by  reference  to the  information  contained in the
section captioned "Certain  Relationships and Related Transactions" in the Proxy
Statement.


                                       40
<PAGE>

                                     PART IV

ITEM 14.         EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a) (1) Financial  Statements - See Index to Financial  Statements  and
                    Financial Statement Schedule at page 24 of this Form 10-K.
             (2) Financial Statement Schedules - See Index to Financial
                    Statements and Financial Statement Schedule at page 24 of 
                    this Form 10-K.
             (3) Exhibits - See Exhibit Index at page 42 of this Form 10-K.

         (b) The Registrant did not file or amend any reports on Form 8-K during
                 the last quarter of the fiscal year ended September 28, 1996.

         (c) See Exhibit Index at page 42 of this Form 10-K.

         (d) See Index to Financial  Statements  and  Financial  Statements  and
                 Financial Statement Schedule at page 24 of this Form 10-K.


                                       41
<PAGE>


                                  EXHIBIT INDEX

Number                        Description of Document
------                        -----------------------

2.1      Agreement   and  Plan  of  Merger   between   Registrant   and   Asante
         Technologies,  Inc., a California  corporation,  effective  October 12,
         1993.(1)

3.1      Certificate of Incorporation of Registrant.(1)

3.1A     Certificate   of  Amendment  of   Certificate   of   Incorporation   of
         Registrant.(1)

3.1B     Certificate of Retirement of Stock of Registrant.

3.2      By Laws of Registrant.(1)

4.1      Form of Common Stock certificate.(1)

10.1*    1990 Stock Option Plan and form of Option Agreement.(1)

10.2*    1993 Directors' Stock Option Plan and form of Option Agreement.(1)

10.3*    1993 Employee  Stock Purchase Plan and form of  subscription  agreement
         thereunder.(1)

10.4*    Form of Key Executive Stock Plan Agreement.(1)

10.5*    Employment  Agreement  between  Registrant and Ralph S. Dormitzer dated
         June 2, 1993.(1)

10.5A    Option and Note  Extension  Agreement  between  Registrant and Ralph S.
         Dormitzer dated August 22, 1994.(5)

10.6     Form of  Indemnification  Agreement entered into between Registrant and
         its directors and officers.(1)

10.7     Registration  Rights  Agreement dated July 10, 1992 between  Registrant
         and certain holders of Common Stock and Series E Preferred Stock.(1)

10.8     Lease dated July 16, 1992 for facilities located at 821 Fox Lane in San
         Jose, California.(1)

10.9     Loan  Agreement  between  Registrant  and Comerica Bank  California for
         $10,000,000  line of credit dated July 20, 1993,  as amended as of July
         20, 1993.(1)

10.9A    First  Modification  dated  February 15, 1994, to the Loan and Security
         Agreement dated July 20, 1993.(2)

10.9B    Third Modification,  dated September 30, 1994, to the Loan and Security
         Agreement dated July 20, 1993.(5)

10.9C    Fourth Modification, dated September 30, 1994, to the Loan and Security
         Agreement dated July 20, 1993.(4)

10.9D    Sixth  Modification  Agreement to the Loan and Security Agreement dated
         July 10, 1993.(6)

10.9E    Seventh Modification Agreement to the Loan and Security Agreement dated
         July 20, 1993.(6)

10.10    Manufacturing   Payment   Agreement   dated  October  1,  1990  between
         Registrant and Orient Semiconductor Electronics, Ltd.(1)

10.11    Distribution  Agreement  dated November 2, 1989 between  Registrant and
         Ingram Micro, Inc., as amended.(1)(3)

10.12    Distribution  Agreement  dated June 19,  1989  between  Registrant  and
         Merisel, Inc. (formerly Macamerica), as amended.(1)(3)

                                       42
<PAGE>

10.13    Distribution  Agreement  dated August 30, 1990 between  Registrant  and
         TechData Corporation, as amended.(1)(3)

10.14    Volume Purchase  Agreement dated April 15, 1992 between  Registrant and
         National Semiconductor Corporation.(1)(3)

10.15    Sublease  agreement dated August 21, 1995 for facilities located at 821
         Fox Lane in San Jose, California, and amendments pertaining thereto.

11.1     Calculation of Earnings per Share

23.1     Consent of Independent Accountants

27.1     Financial Data Schedule.

         *     The item listed is a compensatory plan.

         (1)   Previously filed as an Exhibit to the  Registrant's  Registration
               Statement on Form S-1 (No. 33-70300).

         (2)   Previously  filed as an  Exhibit  to the  Registrant's  Quarterly
               Report  on Form 10-Q for the  quarterly  period  ended  March 31,
               1994.

         (3)   Confidential  treatment  granted as to certain  portions of these
               exhibits.

         (4)   Previously  filed as an  Exhibit  to the  Registrant's  Quarterly
               Report on Form 10-Q for the quarterly period ended April 1, 1995.

         (5)   Previously filed as an Exhibit to the Registrant's  Form 10-K for
               the fiscal year ended September 30, 1994.

         (6)   Previously  filed as an  exhibit  to the  Registrant's  Quarterly
               Report  on Form 10-Q for the  quarterly  period  ended  March 30,
               1996.

                                       43
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this  Report on Form 10-K to be
signed on its behalf by the undersigned, thereunto duly authorized.

   December 20, 1996

                      ASANTE TECHNOLOGIES, INC.



                      By:      /s/ JEFF YUAN-KAI LIN
                               -------------------------------------
                               Jeff Yuan-Kai Lin,
                               President and Chief Executive Officer


                      By:      /s/ ROBERT SHEFFIELD
                               -------------------------------------
                               Robert Sheffield
                               Vice President of Finance,
                               Chief Financial Officer, and Secretary


                                       44
<PAGE>

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature  appears
below constitutes and appoints Jeff Yuan-Kai Lin and Robert Sheffield,  and each
of them, jointly and severally,  his  attorneys-in-fact,  each with the power of
substitution,  for him in any and all capacities, to sign any and all amendments
to this  Report on Form 10-K and to file the same,  with  exhibits  thereto  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,   hereby   ratifying   and   confirming   all  that   each  of  said
attorneys-in-fact,  or his substitute or substitutes, may do or cause to be done
by virtue hereof.

<TABLE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
on Form 10-K has been signed by the following  persons in the  capacities and on
the dates indicated:

<CAPTION>
               Signature                                        Title                                         Dates
--------------------------------------         ------------------------------------------                  -----------------

<S>                                            <C>                                                         <C> 
/s/   JEFF YUAN-KAI LIN                        President, and Chief Executive Officer                      December 20, 1996
--------------------------------------         (Principal Executive Officer) and Director
     (Jeff Yuan-Kai Lin)                       


/s/   ROBERT SHEFFIELD                         Vice President of Finance, and                              December 20, 1996
--------------------------------------         Chief Financial Officer (Principal Financial  
     (Robert Sheffield)                        and Accounting Officer)                       
                                               

/s/   MICHAEL KAUFMAN                          (Director)                                                  December 20, 1996
--------------------------------------
     (Michael Kaufman)


/s/   SOO BOON KOH                             (Director)                                                  December 20, 1996
--------------------------------------
     (Soo Boon Koh)


/s/   EDMOND TSENG                             (Director)                                                  December 20, 1996
--------------------------------------
     (Edmond Tseng)


/s/   CYRUS TSUI                               (Director)                                                  December 20, 1996
--------------------------------------
     (Cyrus Tsui)


/s/   WILSON WONG                              (Director)                                                  December 20, 1996
--------------------------------------
     (Wilson Wong)
</TABLE>

                                       45
<PAGE>


                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE



To the Board of Directors of
Asante Technologies, Inc.

Our audits of the financial  statements  referred to in our report dated October
25, 1996,  except as to paragraph 2 of Note 9, which is as of November 18, 1996,
appearing in this Form 10-K also  included an audit of the  Financial  Statement
Schedule  listed in Item 14(a) of this Form 10-K. In our opinion,  the Financial
Statement  Schedule presents fairly, in all material  respects,  the information
set  forth  therein  when  read  in  conjunction  with  the  related   financial
statements.




PRICE WATERHOUSE LLP

San Jose, California
October 25, 1996


                                       S-1

<PAGE>
<TABLE>

                                              ASANTE TECHNOLOGIES, INC.


                            SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                                                   (in thousands)
<CAPTION>

                                                     Balance at        Charged to                         Balance at
                                                     Beginning         Costs and                            End of
               Description                           of Period         Expenses         Deductions          Period
               -----------                           ----------        ----------       ----------        ----------
<S>                                                  <C>               <C>              <C>               <C>
Year ended September 30, 1994:
   Allowance for doubtful accounts, price protection
         and distributor rebates                     $   1,270         $   2,769        $    (2,482)      $   1,557
   Allowance for sales return                              225             1,594             (  473)          1,346
                                                     ---------         ---------        ------------      ---------
                                                     $   1,495         $   4,363        $    (2,955)      $   2,903
                                                     =========         =========        ===========       =========
Year ended September 30, 1995:
   Allowance for doubtful accounts, price protection
         and distributor rebates                     $   1,557         $   3,566        $    (3,340)      $   1,783
   Allowance for sales return                            1,346             1,055             (1,493)            908
                                                     ---------         ---------        ------------      ---------
                                                     $   2,903         $   4,621        $    (4,833)      $   2,691
                                                     =========         =========        ===========       =========
Year ended September 28, 1996:
   Allowance for doubtful accounts, price protection
         and distributor rebates                     $   1,783         $   2,406        $    (2,032)      $   2,157
   Allowance for sales return                              908               242               (133)          1,017
                                                     ---------         ---------        ------------      ---------
                                                     $   2,691         $   2,648        $    (2,165)      $   3,174
                                                     =========         =========        ===========       =========
</TABLE>

                                       S-2