U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

  X           Annual report pursuant to Section 13 or 15(d) of the Securities
-----         Exchange Act of 1934 For the fiscal year ended March 31, 2002

              Transition report under Section 13 or 15(d) of the Securities
-----         Exchange Act of 1934 For the transition period
              from _______________ to ________________

Commission File No. 0-13836

                          SILICON VALLEY RESEARCH, INC.
        (Exact name of Small Business Issuer as specified in its charter)

<TABLE>
<CAPTION>
<S>                                                               <C>
California                                                        94-2743735
(State or other jurisdiction of incorporation or organization)    (I.R.S. Employer Identification Number)

5542 Monterey Road  No. 217
San Jose, CA                                                      95138-1529
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number, including area code:                   (408) 223-3456

Securities registered under Section 12(b) of the Act:             None

Securities registered under Section 12(g) of the Act:             Common Stock, no par value
                                                                  (Title of Class)
</TABLE>

Indicate by check mark whether the issuer: (1) has filed all reports required to
be filed by  Section 13 or 15(d) of the  Exchange  Act during the past 12 months
(or for such  shorter  period  that the  registrant  was  required  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. YES _X_   NO___

Indicate by check mark if disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will 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-KSB
or any amendment to this Form 10-KSB. [X]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant,  based upon the average of bid and asked prices of the  Registrant's
common stock on July 12, 2002 in the over-the-counter  market, was approximately
$1,500,000. Shares of voting stock held by each officer and director and by each
person who on that date owned 5% or more of the  outstanding  voting  stock have
been  excluded  in that  such  persons  may be  deemed  to be  affiliates.  This
determination of affiliate status is not necessarily a conclusive  determination
for other purposes.

As of July 12, 2002, Issuer had 44,683,257 shares of common stock outstanding.

Transitional Small Business Disclosure Format:       ______yes     ___X____no

           The exhibit index appears on sequentially numbered page 41

<PAGE>

                                     Part I

This  report  includes a number of  forward-looking  statements,  which  reflect
Silicon  Valley  Research,  Inc.'s ("the  Company" or "SVR")  current views with
respect  to future  events  and  financial  performance.  These  forward-looking
statements  are  subject to certain  risks and  uncertainties,  including  those
discussed  in  Item  6 -  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations - Other Factors  Affecting  Future  Results,
and  elsewhere  in this Form  10-KSB,  as well as other risks and  uncertainties
described in the Company's  other reports filed with the Securities and Exchange
Commission that could cause actual results to differ  materially from historical
results  or  those  anticipated.   In  this  report,  the  words  "anticipates,"
"believes,"  "expects,"  "intends,"  "future,"  "may"  and  similar  expressions
regarding our intent, belief, and current expectations identify  forward-looking
statements. . Some examples of forward-looking statements in this report include
that barring a substantial  increase in sales activity,  we will run out of cash
during  the  second  quarter  of 2003  unless  we  conduct  a  financing  or are
successful in pursuing  other  alternatives  such as an  acquisition  or sale or
license of our technology,  that we will have to defer pay to service  providers
during  the  first  and  second  quarters  of  fiscal  2003 if we do not  obtain
additional  cash,  that a possible  source of cash is the potential  exercise of
outstanding  warrants  if our stock  price  increases,  that we plan to  release
product upgrades and  enhancements  and to rely on the services market.  Readers
are cautioned not to place undue reliance on these  forward-looking  statements,
which speak only as of the date hereof.  We undertake no  obligation to publicly
release the results of any revisions to these  forward-looking  statements which
may be made to  reflect  events or  circumstances  occurring  subsequent  to the
filing of this Form 10-KSB with the Securities and Exchange Commission.

Item 1.  Description of Business

General

Silicon Valley Research, Inc. (sometimes referred to as "the Company" or "SVR"),
incorporated in 1979,  develops and markets  physical design software for use by
integrated circuit ("IC") designers,  including those of its subsidiary, Quality
I.C.   Corporation.   Our  software  products  are  used  to  automatically  and
efficiently  arrange and  connect the  individual  components  that  comprise an
integrated  circuit.  While this  process,  commonly  referred  to as "place and
route", is a crucial element of most chip designs, some critical areas require a
more manual approach.  Designers at Quality I.C.  Corporation are skilled in the
production of custom chip components to satisfy  demanding  performance and area
requirements.  By  combining  both  strengths,  our design  project  support and
consulting  services  encompass  nearly all aspects of the  physical  integrated
circuit  design  process.  Our  end-user  customers  include  Hyundai,   Micron,
Motorola,   N.E.C.,  OKI  Semiconductor,   Prominent   Communications,   Samsung
Electronics, Sarnoff, Sony, Texas Instruments, and Yamaha.

Industry Background

Electronics manufacturers face constant pressure to create faster, more complex,
and more reliable IC's. To compete effectively,  electronics  manufacturers must
shorten  product  development  cycles,  or "time to  market"  for new  products.
Electronics  manufacturers  are  also  under  increasing  economic  pressure  to
increase  manufacturing  yield and reduce die size in order to maximize  revenue
from  semiconductor  fabrication  facilities.  As  a  result  of  these  trends,
electronics  manufacturers  will require  electronic design  automation  ("EDA")
software  tools that  improve the quality and  increase  the speed of the design
process to remain competitive.

The  design  cycle for IC's  consists  of a number of steps:  (i)  architectural
specification,  or the  definition of the overall  architecture  of the IC, (ii)
design  (involving  synthesis,   functional  and  timing  verification),   which
describes  the desired  functionality  of the IC,  (iii)  physical  layout,  the
placement and interconnection (routing) of physical components,  and (iv) layout
verification  which  verifies  that the  physical  layout  meets the  functional
specification and manufacturing  constraints (design rules). Recent trends in IC
design suggest that smaller feature sizes are becoming more commonplace, thereby
enabling  higher  frequency  designs.   These  designs  require  tighter  timing
constraints,  smaller die size, and lower power

                                       2
<PAGE>

requirements, while at the same time maintaining manufacturing yield.

The demands on EDA software  tools have been  compounded as companies  designing
and  manufacturing  IC's are  beginning  to address  the issues  raised by "deep
submicron"  design.  Such design work  involves  feature  sizes of 0.5 micron or
smaller.  At deep submicron  geometries,  interconnect (wire) delay, rather than
gate (transistor)  delay,  increasingly  becomes the factor which determines the
operating  frequency of the IC. Deep submicron  geometries  require designers to
produce  routing with minimal wire lengths and to achieve the smallest  possible
die size to meet high frequency  specifications.  In addition,  minimizing  vias
(interconnections between various metal layers inside the IC) and corners in the
routing of IC's improves manufacturability, thereby increasing overall yield and
reliability.  As IC technology advances further into deep submicron  geometries,
the physical layout task is becoming  increasingly  difficult to complete within
design specifications.  As a result, place and route tools such as those offered
by us are required to address these complex layout issues.

SVR Products

We offer a line of products for IC physical  design.  All of our products run on
Unix workstations from Sun  Microsystems,  Inc. and Hewlett Packard Company,  as
well as on the Linux  operating  system.  All of our products  support  industry
standards such as Motif, X-Windows,  GDSII Stream format, EDIF, Verilog, LEF and
DEF. In  addition,  we have ported two of our  products,  QIC/APR and GARDS,  to
operate on the Red Hat  version  of the Linux  operating  system  running on X86
workstations.  We offer  interfaces  to Mentor  Graphics  Falcon  Framework  and
Synopsys,  Inc.'s  synthesis  tools and Cadence's  physical  design  tools.  Our
products have a similar technology foundation and are modular in nature. Each of
the  products  offered by us is sold in a range of  configurations  based on the
size and  complexity  of the design to be  developed  with the SVR  product.  In
addition,  we offer a set of design project support services encompassing the IC
development process including complete IC design engineering services, VLSI mask
design and chip assembly  capability,  and CAD/EDA tool application  methodology
consulting services. The following summarizes our product families:

SVR QIC/APR: SVR QIC/APR is our latest product offering. QIC/APR is the combined
offering of DCP,  QICPlace and QICRoute.  QIC/APR  offers all of the features of
the combined products in one comprehensive and affordable package.

SVR DCP: SVR Design  Cockpit  Platform is a  next-generation  framework for tool
integration.  SVR DCP combines an  extensible  database  with a modular  plug-in
architecture  to provide a generic engine for VLSI design  automation.  Database
viewers,  file format support, and complete interfaces to external tools such as
QICPlace and QICRoute are specified as plug-ins.  SVR DCP is controlled  through
an elegant graphical user interface which gives it advanced editing capabilities
suitable for floorplanning,  full-custom  layout,  placement  modification,  and
route editing. Customers may use SVR DCP's standard scripting language, Perl, to
modify and customize the tool to the needs of their design flow.

SVR  QICPlace:  SVR  QICPlace is a  stand-alone  placement  engine  based on the
powerful  placement  subsystem of SVR GARDS.  It uses its  timing-driven  MinCut
algorithm  to  produce  high-density   results.  SVR  QICPlace  provides  design
flexibility by  transparently  supporting  non-rectangular  placement  areas and
cells.  For designs with  sensitive  timing  budgets,  SVR  QICPlace's  accurate
clock-tree  synthesis  minimizes the skew of critical paths.  SVR QICPlace plugs
seamlessly into SVR DCP for complete interactive control.

SVR QICRoute:  SVR QICRoute is our next-generation  routing solution,  combining
the proven speed and efficiency of SVR GARDS routing subsystem with powerful new
features for deep  submicron  design.  SVR  QICRoute's  pin-pair  routing  gives
designers precise control over timing-critical  nets. Timing violations can also
be  automatically  eliminated using SVR QICRoute's  MeetSkew routing  algorithm.
Although the line-probe  routing algorithm  consistently  delivers  high-quality
routing  results,  SVR  QICRoute  can  optionally  be guided  by  global-routing
information.  Like SVR QICPlace, SVR QICRoute is tightly integrated with SVR DCP
through a sophisticated plug-in interface.

                                       3
<PAGE>

SVR GARDS:  We believe that SVR GARDS,  using our line probe routing  algorithm,
provides the fastest  turnaround time for an area-based place and route software
tool in the EDA industry.  In addition,  SVR GARDS provides high quality routing
results with a minimum of vias, line segments,  and total  interconnecting  wire
length.  The  product  handles up to a million  gates and has been  extended  to
handle  n  layers  of  interconnect.  The  interactive  timing-driven  placement
subsystem  enables  designers to improve  their  placement  to handle  issues of
congestion,  timing or net length. The timing-driven routing capabilities of the
product allow  designers to specify  timing  constraints  on all nets and on all
critical paths without  affecting run times. SVR GARDS has a built-in  simulator
for timing  analysis  and a clock tree  synthesis  module that  minimizes  clock
delay.  SVR GARDS includes a procedural  language  interface which allows system
designers to interface  the tool to  virtually  any design flow.  The line probe
routing  algorithms  enable  the  product to perform  incremental  ECOs  rapidly
without  disturbing  the  structure of the routed  design  outside the region of
interest.

SVR SC: SVR SC is a  channel-based  router for the automatic  place and route of
standard  cell-based  IC's.  SVR SC provides two to four layer routing for fixed
and variable height and width standard  cells.  Routing over cells and blocks is
supported on all layers. SVR SC provides efficient floorplanning, placement, and
routing of standard  cells,  macro  blocks,  and mixed  block and cell  designs.
Advanced features such as row flipping and power rail sharing allow designers to
create  designs with fewer  channels  and thus  reduced die size.  Timing-driven
placement and routing  capabilities  are  integrated  into the product to assist
designers  in  the  creation  of  designs  which  function  according  to  their
specification.

SVR  FloorPlacer:  SVR  FloorPlacer  is an  interactive  floorplanning  software
product for designers of embedded  arrays,  gate arrays,  and structured  custom
blocks. By integrating our area-based routing technology,  SVR FloorPlacer helps
designers  obtain  an  accurate   assessment  of  timing   characteristics   and
routability  of their  designs  early in the  design  process.  SVR  FloorPlacer
reduces time to market by eliminating  costly  iterations  between synthesis and
layout.  The software  products provide  interfaces and links which allow direct
back  annotation  of delays from SVR  FloorPlacer  products  into  synthesis and
simulation.  The graphical user interface  provides improved usability and gives
the user  interactive  control over the floorplan while providing  comprehensive
graphical analysis and feedback.  This interface helps users improve routability
and the timing attributes of their designs.

IC Design and Consulting  Services:  We provide a set of design project  support
services  focused  mainly on the physical  design  portion of the IC development
process  including  complete  physical design  engineering  services,  VLSI mask
design and chip assembly  capability,  and CAD/EDA tool application  methodology
consulting  services.  Design capabilities  include standard cell library layout
and verification,  hierarchical chip floorplanning,  full custom  internal-block
layout,  standard-cell-block  place-and-route implementation and top-level place
and route chip  assembly.  As an integrated  EDA tool supplier and IC design and
layout  organization,  we also  provide  consulting  in the areas of  high-level
design   methodology,   EDA  tool   application  and   integration,   customized
environments and need-specific tool enhancements.

Marketing and Sales

During  the 2001  fiscal  year,  we changed  our sales  model to offer our tools
through  e*ECAD's Web service on a  pay-per-use  basis.  E*ECAD is the first Web
service to offer engineers featured EDA tools hosted on their worldwide Internet
portal that delivers the tools on a pay-per-use basis. Users can access e*ECAD's
broad variety of software and download  selected tools to their  computers.  Our
customers download,  install and run the tools they need and are charged for the
actual  usage time,  which can be billed in .01 second  increments.  The pricing
structure enables us to offer flexible pricing solutions to worldwide  customers
who demand an alternative to the high licensing fees of traditional front-loaded
licensing  models.  In  addition  to the  Internet  model,  we  continue  to use
traditional  lines of distribution for our products.  We have domestic sales and
support offices in metropolitan areas of California and Texas.

We market our products  both  domestically  and  internationally  to  integrated
circuit designers and manufacturers, large electronic systems manufacturers, and
major aerospace,  automotive,  and consumer electronics companies.  Consolidated
revenue from our major customers consists of the following:

                                       4
<PAGE>

                                     Year Ended March 31,

     Customer                      2002                2001
     --------                      ----                ----

     Motorola, Inc.                 33%                 24%
     Sarnoff Corporation            15%                 *%
     Cirrus Logic                   *%                  18%
     SigmaTel                       *%                  18%
     Cicada Semiconductor           *%                  14%
     Mediamatics                    *%                  11%

     *less than 10% of consolidated revenue

In addition to the Internet model  described  above,  we license our software to
customers  (except in Japan,  where the Company sells its software to customers)
under  agreements that provide for a fully paid up license fee or sales price to
use the  product  in  perpetuity  on a  specified  computer.  License  fees  for
individual  products range from  approximately  $25,000 for the least  expensive
software to approximately $200,000 for the most complex software product.

We provide software maintenance agreements, typically for a one year term, for a
fee,   which  includes   technical   support  and  services  such  as  telephone
consultation  regarding the use of the products,  problem resolution and product
enhancements.

Product Development

The EDA market is characterized by rapid technological advances in both computer
hardware and software. We believe that the continued development of new products
and enhanced  features is critical to our success.  In fiscal 2001 and 2002,  we
spent approximately $835,000 and $629,000, or as a percentage of revenue 71% and
59%, respectively, on engineering,  research and development.  These amounts are
net of costs  capitalized in accordance  with Statement of Financial  Accounting
Standard  No. 86,  "Accounting  for the Costs of  Computer  Software to be Sold,
Leased,  or Otherwise  Marketed" (See Note 1 of Notes to Consolidated  Financial
Statements).

Manufacturing

Our software production  operations consist of configuring the existing software
product  with the proper  customer  specifications,  producing  user manuals and
other  documentation  and  shipping  the  product to the  customer  by making it
available for download  from the Company's ftp server.  Software is delivered to
customers  electronically  over the Internet.  Many of our customers order on an
as-needed  basis and often delay  delivery of firm  purchase  orders until their
project commencement dates are determined,  and, as a result, we operate with no
significant backlog. We are not dependent on seasonal fluctuations.

Competition

The EDA software market in which we compete is intensely competitive and subject
to rapid  technological  change. We currently face competition from EDA vendors,
including Cadence, which currently holds the dominant share of the market for IC
physical  design  software,   Avant!  and  Synopsys.   These  EDA  vendors  have
significantly greater financial, technical and marketing resources, greater name
recognition and a larger installed customer base than ours. These companies also
have established  relationships with current and potential customers of ours and
can  devote  substantial   resources  aimed  at  preventing  us  from  enhancing
relationships  with  existing  customers  or  establishing   relationships  with
potential  customers.  We believe that  competitive  factors in the EDA software
market include product performance,  price, support of industry standards,  ease
of use, delivery schedule,  product enhancement,  and customer technical support
and service.

Competition from other EDA companies that choose to enter the IC physical design
market could  present  particularly  formidable  competition  due to their large
installed  customer  base and their  ability to offer a

                                       5
<PAGE>

complete  integrated  IC  design  solution,  which we do not  offer.  We  expect
additional  competition  from  other  established  and  emerging  companies.  In
addition, the EDA industry has become increasingly  concentrated in recent years
as  a  result  of   consolidations,   acquisitions   and  strategic   alliances.
Accordingly,  it is possible that new competitors or alliances among competitors
could  emerge and rapidly  acquire  significant  market  share.  There can be no
assurance  that we will be able to  compete  successfully  against  current  and
future  competitors or that  competitive  pressures  faced by us will not have a
material  adverse  effect  on its  business,  operating  results  and  financial
condition.

Proprietary Rights

We rely on contract,  trade secret and copyright law to protect our  technology.
There can be no  assurance  that others will not develop  technologies  that are
similar or superior to our technology or duplicate our technology.  We generally
enter  into   confidentiality   or  license   agreements   with  our  employees,
distributors  and  customers,  and  limit  access  to  and  distribution  of our
software,   documentation  and  other  proprietary  information.  Despite  these
precautions,  it may be possible for a third party to copy or  otherwise  obtain
and use our products or technology without authorization,  or to develop similar
technology independently.  In addition, effective copyright and trade protection
may be unavailable or limited in certain foreign countries.

There has been  substantial  industry  litigation  regarding  patents  and other
intellectual  property rights  involving  technology  companies.  In the future,
litigation  may be  necessary to protect and enforce our  intellectual  property
rights, to defend us against claimed infringement of the rights of others and to
determine the scope and validity of the proprietary  rights of others.  Any such
litigation could be costly and could divert management's attention,  which could
have a  material  adverse  effect on our  business,  results  of  operations  or
financial  condition  regardless of the outcome of the litigation.  In addition,
third parties  making claims  against us with respect to  intellectual  property
infringement  may be able to obtain  injunctive or other  equitable  relief that
could  effectively  block our ability to sell our products in the United  States
and abroad, and could result in an award of substantial damages. In the event of
a claim of  infringement,  we and our customers may be required to obtain one or
more  licenses  from third  parties.  There can be no  assurance  that we or our
customers  could obtain  necessary  licenses  from third parties at a reasonable
cost or at all.

Employees

As of March 31, 2002,  we employed  nine  full-time  employees and one part-time
employee;  six  engaged  in  engineering,  product  development,  and IC  design
services  and  the  remainder  engaged  in  administrative  activities.  The ten
employees were located in the United States.  Our success will depend,  in large
part, on our ability to attract and retain  trained and qualified  personnel who
are  in  great  demand  throughout  the  industry.  None  of  our  employees  is
represented by a labor union.

Our development, management of growth and other activities depend on the efforts
of key management  and technical  employees.  Competition  for such personnel is
intense. We use incentives,  including competitive compensation and stock option
plans,  to  attract  and  retain  well-qualified  employees.  There  can  be  no
assurance,  however,  that we will continue to attract and retain personnel with
the requisite  capabilities  and experience.  The loss of one or more of our key
management or technical personnel also could materially and adversely affect us.
We generally do not have employment agreements with our key management personnel
or technical employees.

                                       6
<PAGE>

Item 2.  Description of Property

Our principal administrative, marketing, engineering development and support and
I.C. design functions occupy two facilities. One facility occupied approximately
2,000  square  feet  in an  office  building  in San  Jose,  California  under a
four-year  lease.  Subsequent  to year end,  we vacated  the office  building in
California.  The other  occupies  approximately  2,000  square feet in an office
building in Austin, Texas under a month-to-month lease.

Management believes that our facilities will be adequate for our operations.

Item 3.  Legal Proceedings

As with other  companies in our industry,  we are subject to the risk of adverse
claims  and  litigation  on a variety  of  matters,  including  infringement  of
intellectual  property,   intentional  and/or  negligent   misrepresentation  of
material facts and breach of fiduciary duties.

Subsequent  to year end, on April 29, 2002,  a vendor  filed a judgment  against
Silicon  Valley  Research,  Inc.  in  Santa  Clara  County  Superior  Court  for
approximately $95,000.

The  Company  filed a  complaint  in the United  States  District  Court for the
Northern  District of California on August 10, 2001 against  Avant!  Corporation
and certain of its  employees  for unfair  competition,  tortious  interference,
false  advertising,  receipt and  concealing  of stolen  goods,  conspiracy  and
violations  of  federal  racketeering  laws.  This  civil  action  arises out of
Avant!'s theft of computer code and trade secrets from Cadence  Corporation  and
use of those stolen products to compete with SVR.

Avant!  Corporation  recently  was found  guilty of theft of trade  secrets  and
conspiracy to steal and use the trade secrets of Cadence  Corporation during the
period of 1991 through  1998,  and of having  engaged in fraud and deceit in the
offer and sale of a security after entering a plea of no contest  thereto on May
16,  2001.  A  restitution  award of  approximately  $195 million was awarded to
Cadence Corporation in the criminal case, and Cadence is awaiting the lifting of
a stay in its civil suit against Avant! Corporation.

The Company has  determined  it necessary  to undertake  this legal action in an
attempt  to  recoup  damages  caused  by  Avant!'s  conduct,  including  damages
resulting  from sales of SVR place and route  software  lost  directly to Avant!
Corporation.  Avant!  Corporation  sold place and route  software that contained
Cadence  Corporation's  stolen  computer  code and  trade  secrets  head to head
against SVR's software, and this unfair advantage allowed Avant!  Corporation to
acquire a significant amount of the Company's sales and market share.

SVR has retained David H. Donaldson, Jr. and Peter Kennedy of the Texas law firm
of George & Donaldson,  LLP and Craig Needham of the California firm of Needham,
Davis,  Kirwan & Young,  LLP to represent it in this matter on a contingency fee
arrangement.

Avant!  Corporation,  in addition to filing its own Motion to Dismiss,  has also
joined Defendant Stephen Wuu's Motion to Dismiss, moving to dismiss each and all
of SVR's claims against both parties.  On December 14, 2001,  Judge Ronald Whyte
heard  Avant!'s and Stephen Wuu's Motions to Dismiss,  but did not make a ruling
from the bench.  The judge  could  make a ruling in the  future  with no further
input from either parties,  or the judge could request  additional briefs and/or
additional  hearings  in the matter  before  making his ruling on the Motions to
Dismiss. Additionally, all parties have stipulated that they will participate in
the Alternative  Dispute  Resolution  process of a private  mediation,  with the
mediation provider to be determined.

Management believes that the ultimate resolution of the dispute with Avant! will
not have a  material  adverse  impact on our  financial  position  or results of
operations.

                                       7
<PAGE>

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

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

                                       8
<PAGE>

                                     Part II

Item 5.  Market for Common Equity and Related Stockholder Matters

Our common stock was traded on the Nasdaq  National  Market until  November 1998
and is currently traded on the OTC Bulletin Board (the "OTCBB") under the symbol
SVRI. The following table sets forth, for the fiscal period  indicated,  the low
and high closing sales prices for the common stock as reported by the OTCBB.  We
had approximately 399 shareholders of record and approximately  4,443 beneficial
holders as of March 31, 2002.

Common Stock Prices

Fiscal 2001 Quarter ended    June 30    Sept. 30      Dec. 31        March 31
                             -------    --------      -------        --------
         High                 $0.69       $0.65        $0.46          $0.22
         Low                  $0.19       $0.16        $0.13          $0.14

Fiscal 2002 Quarter ended    June 30    Sept. 30      Dec. 31        March 31
                             -------    --------      -------        --------
         High                 $0.20       $0.16       $0.154          $0.115
         Low                  $0.13       $0.07       $0.054          $0.052

The prices set forth above reflect inter-dealer prices,  without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions.

We have not  declared or paid  dividends  on our common stock in fiscal 2001 and
2002.  Certain  covenants  in  our  loan  agreements  restrict  the  payment  of
dividends.  We currently  anticipate that we will retain all future earnings for
use in the operation and expansion of our business and do not anticipate  paying
any cash dividends in the foreseeable future.

                                       9
<PAGE>

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (in thousands)

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations  includes a number of  forward-looking  statements  which reflect our
current  views with respect to future  events and  financial  performance.  Some
examples of  forward-looking  statements  in this report  include that barring a
substantial  increase  in sales  activity,  we will run out of cash  during  the
second  quarter  of 2003  unless we conduct a  financing  or are  successful  in
pursuing  other  alternatives  such as an  acquisition or sale or license of our
technology, that we will have to defer pay to service providers during the first
and second quarters of fiscal 2003 if we do not obtain  additional  cash, that a
possible source of cash is the potential exercise of outstanding warrants if our
stock price increases, that we plan to release product upgrades and enhancements
and to rely on the services market. These and other  forward-looking  statements
are subject to certain risks and uncertainties, including those discussed in the
Other Factors  Affecting  Future Results section of this Item 6 and elsewhere in
this Annual  Report on Form  10-KSB,  as well as other  risks and  uncertainties
described  in  our  other  reports  filed  with  the   Securities  and  Exchange
Commission, that could cause actual results to differ materially from historical
results  or  those  anticipated.   In  this  report,  the  words   "anticipates"
"believes,"  "expects,"  "intends,"  "future,"  "may"  and  similar  expressions
identify  forward-looking  statements.  Readers are cautioned not to place undue
reliance on these  forward-looking  statements,  which speak only as of the date
hereof.  We  undertake  no  obligation  to  publicly  release the results of any
revisions  to these  forward-looking  statements  which  may be made to  reflect
events or circumstances  occurring  subsequent to the filing of this Form 10-KSB
with the Securities and Exchange Commission.

The  following  discussion  should  be read in  conjunction  with the  Unaudited
Consolidated  Financial  Statements  and Notes  thereto.  Dollar  amounts are in
thousands.

Revenue

Total revenue decreased from $1,182 in fiscal 2001 to $1,064 in fiscal 2002. The
decrease in revenues in fiscal 2002 resulted primarily from a decrease in design
services revenue.  International  sales were approximately $38 and $0 for fiscal
2001 and 2002,  respectively,  representing  3% and 0% of total  revenue for the
respective  periods.  This decrease resulted primarily from closure of our Japan
and Taiwan offices.  Our plans for fiscal 2003 include an aggressive new product
plan, including new releases of significant enhancements for each of our primary
products, as well as plans to increase  international sales. However,  there can
be no assurance that these new products and  enhancements  will be released on a
timely  basis,  if at all, or will gain  market  acceptance.  We have  front-end
technology  which  improves the flow of data into our product tools and improves
the resulting performance. We intend to continue to focus on the services market
going forward in order to provide  customers  with a  service-driven  integrated
circuit  design  solution.  See  "Other  Factors  Affecting  Future  Results-New
Products and Rapid Technological Change; Risk of Product Defects".

In fiscal 2001 and 2002  maintenance  and services  revenue was $1,137 and $843,
respectively.  Services revenue as a percentage of total revenue was 96% and 79%
for fiscal  2001 and 2002,  respectively.  The  decline in  services  revenue in
fiscal  2002  was due to a  general  decline  within  the chip  design  industry
resulting in major cutbacks for design services by our customers.

If revenue levels are below  expectations,  operating results will be materially
and  adversely  affected.  In addition,  our  quarterly  and annual  results may
fluctuate as a result of many factors, including the size and timing of software
license  fees,  timing of  co-development  projects  with  customers,  timing of
operating  expenditures,  increased  competition,  new product announcements and
releases by us and our  competitors,  gain or loss of  significant  customers or
distributors,  expense levels, renewal of maintenance contracts, pricing changes
by us or our competitors, personnel changes, foreign currency exchange rates and
economic conditions generally and in the electronics industry specifically.

Our expense levels are based, in part, on its  expectations as to future revenue
levels, which are difficult to predict.

                                       10
<PAGE>

Cost of revenue

For fiscal 2001 and 2002, cost of licenses was $217 and $124, respectively. Cost
of licenses as a percentage of licenses revenue was 482% and 56% for fiscal 2001
and 2002, respectively.  Cost of licenses consists primarily of the amortization
of capitalized software development costs and is not a function of revenue.

For fiscal 2001 and 2002, cost of maintenance  and services  decreased from $730
to $382,  respectively.  Cost of  maintenance  and services as a  percentage  of
maintenance  and  services  revenue  was 64% and 45% for  fiscal  2001 and 2002,
respectively.  Cost of maintenance and services  primarily  includes the cost of
providing  design  services.  In addition,  a small  percentage of costs are for
technical support and technical documentation.

Engineering, Research and Development Expenses

Engineering,  research  and  development  expenses for fiscal 2001 and 2002 were
$835  and  $629,  respectively.  The  decrease  in  engineering,   research  and
development expenses in fiscal 2002 was due to cost-cutting  measures instituted
by management, including a reduction in personnel, while maintaining an emphasis
on new  product  research  and  development.  We believe  we have the  personnel
necessary to complete our planned product upgrades and releases during 2003.

Selling and Marketing Expenses

Selling  and  marketing  expenses  for fiscal  2001 and 2002 were $578 and $593,
respectively. The increase in fiscal 2002 resulted from an increase in the costs
of attending an annual trade show in June 2001.

General and Administrative Expenses

General and administrative expenses for fiscal 2001 and 2002 were $745 and $775,
respectively.  General and  administrative  expenses  have  increased  due to an
increase in personnel.

Other Income (Expense)

Other  income  (expense)  for  fiscal  2001  and  2002 was  $(147)  and  $(115),
respectively.  Other  expense for 2001 and 2002 includes  interest  expense on a
subordinated debt/warrant financing of $124 and $115, respectively.

Provision for Income Taxes

The  provision  for  income  taxes for  fiscal  2001 and 2002 was $15 and $(22),
respectively.

As of March 31, 2002, we had federal and state net operating loss  carryforwards
of  approximately  $36,800  and  $9,400,  respectively.  We also had federal and
California  research and development tax credit  carryforwards  of approximately
$727 and $513,  respectively.  The net operating  loss and credit  carryforwards
will expire at various  dates from 2002 through  2020, if not utilized (see Note
11 of Notes to Consolidated Financial Statements).

Liquidity and Capital Resources

Since inception,  we have financed our operations  primarily through private and
public sales of equity  securities and to a lesser  extent,  cash generated from
operations.  In  fiscal  2001 and  2002,  we  received  cash of $662  and  $290,
respectively,  from  private  placements  of common  stock and  warrants and the
exercise of warrants and options to purchase common stock.

We incurred an  operating  loss for fiscal 2002.  At March 31,  2002,  we had an
accumulated  deficit of $47,996.  The achievement of  profitability is primarily
dependent  upon the  continued  development  and  commercial  acceptance  of our
products,  the successful management of the business and management's

                                       11
<PAGE>

ability to  strategically  focus the  Company.  There can be no  assurance  that
profitable operations will occur. In addition, we are experiencing negative cash
flow from  operations  and it is expected  that we will  continue to  experience
negative cash flow for a portion of fiscal 2003 and potentially thereafter.

Our operating  activities  used cash of $1,327 and $174 in fiscal 2001 and 2002,
respectively.  We would have used  additional cash of $326 during fiscal 2002 if
we had not deferred  payments to  employees.  This amount is included in accrued
expenses on our  Unaudited  Consolidated  Balance  Sheet at March 31,  2002.  If
employees  are  unwilling  to  continue  without  pay,  we  may  need  to  cease
operations.

Investment  activities,  primarily  comprising  capitalized software development
costs and acquired fixed assets, were $(195) and $(69) for fiscal 2001 and 2002,
respectively.

Our primary unused sources of funds at March 31, 2002 consisted of cash and cash
equivalents of $2.

Our operations  have required  substantial  cash in the past; for example,  $174
during fiscal 2002 and $1,327 in 2001.

In January 2001, we entered into an Agreement  with our bank for the purchase of
our receivables.  The agreement  provides that the bank will purchase up to $250
of our domestic accounts  receivable.  The bank will advance us 80% of qualified
receivables.  In the event that our customers do not pay on the invoices  within
90 days of invoice date, we may be required to return the amount advanced to the
bank. It is also possible  that we could  require  additional  financing to fund
future operations.

On March  26,  2001,  we issued a  Warrant  Reduction  Offer  (the  "Offer")  to
investors who held warrants to purchase shares of our Common Stock  ("Warrants")
at an exercise price of $0.53 per share (the "$0.53 Warrants"). Under the Offer,
such  investors  were able to exercise the $0.53  Warrants at a reduced price of
either  $0.13 per share or $0.115  per share.  Investors  who  exercised  at the
$0.115 price were  prohibited from selling the shares acquired from the exercise
for 60 days  commencing  from the exercise date.  Investors who exercised at the
$0.13 price had no restrictions on the sale of the underlying  shares. The Offer
expired on Friday,  April 6, 2001.  During the first  quarter of fiscal 2002, 45
Warrants were exercised at $0.115 per share raising $5.

On July 31, 2001, we issued a Warrant Reduction Offer (the "Offer") to investors
who held  warrants to purchase  shares of our Common  Stock  ("Warrants")  at an
exercise price of $0.37 per share (the "$0.37 Warrants").  Under the Offer, such
investors  were able to exercise the $0.37 Warrants at a reduced price of $0.055
per share. The Offer expired on August 6, 2001. During fiscal 2002, 270 Warrants
were exercised at $0.055 per share raising $15.

In June 2001, we began a private  placement of equity  securities.  We completed
the private  placement of 1,471  shares of Common  Stock on July 13, 2001,  with
total proceeds to us of $125. One of the investors was a 5% shareholder, officer
or director at the time of the offering and participated in the offering.

In October 2001, we began a private placement of equity securities. We completed
the private  placement of 878 shares of Common  Stock on October 19, 2001,  with
total proceeds to us of $49.

We believe that cash and cash generated from  operations  will not be sufficient
to finance operations  through the second quarter of fiscal 2003.  Management is
exploring  financing  alternatives  to supplement our cash  position.  Potential
sources of additional  financing  include  private equity  financings,  mergers,
strategic   investments,   strategic  partnerships  or  various  forms  of  debt
financings.  However,  our Common Stock was delisted  from trading on the Nasdaq
National Market in November 1998 and now trades in the over-the-counter  market.
Our ability to obtain  additional  financing  through the issuance of our Common
Stock or securities  convertible into Common Stock could be adversely  affected.
See "Delisting from Nasdaq; Disclosure Relating to Low-Priced Stock".

We may issue a series of Preferred Stock with rights, preferences, or privileges
senior to those of the Common Stock.  We have no commitments or  arrangements to
obtain  any  additional  funding  and there is no  assurance  that the amount of
capital  required will be available on  acceptable  terms,  if at all.  However,
because our Common Stock was delisted from trading on the NASDAQ national market
in November, 1998, and now trades in the over-the-counter market, our ability to
sell Common Stock or securities  convertible  into Common Stock may be adversely
affected.  See "Delisting From NASDAQ;  Disclosure

                                       12
<PAGE>

Relating to Low-Priced  Stock" below for possible effect of current common stock
trading on future issuances.

The  unavailability  or  timing  of any  financing  could  prevent  or delay our
continued  development and marketing of our products and services.  In addition,
substantial  curtailment of our operations may be required which could result in
bankruptcy.

Other Factors Affecting Future Results

Unaudited Consolidated  Financial Statements.  The financial statements included
with this Form 10-KSB are not audited.  The audit on our consolidated  financial
statements has not been completed at the date of this filing.  While  management
believes that the financial  statements  are materially  correct,  they may have
material   inaccuracies  which  our  independent  certified  public  accountants
discover as part of their audit, in particular, when they are able to review the
work  papers  from the 2001  audit and from  subsequent  interim  periods.  As a
result,  upon completion of the audit, the financial  statements and disclosures
may  differ  significantly  from  those  reported  in  the  unaudited  financial
statements contained in this Form 10-KSB.

Non-compliance with SEC reporting  requirements.  We were unable to complete our
FY2002  audit  because  we do not  have  the  cash  required  to pay our  former
accountants  who have  otherwise  refused to release  their work papers.  Unless
circumstances change, we will not be able to rectify the situation until we have
enough cash to work out a successful payment plan. We cannot be certain when, if
ever, we will be able to work out an arrangement with our former  accountants to
release their work papers.  Failure to obtain such work papers will also prevent
our new accountants from reviewing our quarterly financial statements.  Until we
file an amendment to this Form 10K-SB with audited financial statements, we will
not be in  compliance  with the  reporting  requirements  under  the  Securities
Exchange  Act of 1934,  as  amended.  This  will  cause us to be  ineligible  to
register  securities with the SEC and  shareholders  will not be able to rely on
Rule 144 for resales of their unregistered or control securities.  Even after we
file such an amendment,  we will not be able register securities with the SEC on
certain,  less costly, forms until we have been in compliance with SEC reporting
requirements for one year. Our  non-compliance  with the reporting  requirements
also exposes us to liability under various securities laws.

Recent and  Expected  Losses;  Accumulated  Deficit.  We  incurred a net loss of
$1,532  for the year  ended  March 31,  2002 and had an  accumulated  deficit of
$47,996 as of March 31, 2002. We may incur future losses.  There is no assurance
that we will generate  positive cash flow from our operations to fund our growth
or that we will obtain or sustain  profitability  in any future  period.  To the
extent we incur  losses  or grow in the  future,  our  operating  and  investing
activities may use cash and, consequently, such losses or growth will require us
to obtain additional sources of financing in the future.

Need for Future Financing.  As described above, under Management  Discussion and
Analysis-Liquidity  and Capital  Resources,  we believe cash and cash  generated
from operations may not be sufficient to finance  operations  through the second
quarter of fiscal 2003 and we are exploring  financing and other alternatives to
supplement  our cash  position to service our current debt and any negative cash
flow from  operations.  There can be no assurance  that we will be able to raise
any cash from our pursuit of such  financing or other  alternatives  or that any
such cash we are able to raise will be on attractive  terms. The  unavailability
or timing of any financing could prevent or delay the continued  development and
marketing of SVR products and services. In addition,  substantial curtailment of
our operations may be required which could result in bankruptcy.

Going  Concern   Assumptions.   Our  independent   accountants'  report  on  our
consolidated  financial  statements  as of and for the year ended March 31, 2001
contained an explanatory  paragraph  indicating  that our  historical  operating
losses and limited capital  resources raise  substantial doubt about our ability
to continue as a going  concern.  If we are unable to generate  sufficient  cash
from  operations or if necessary,  raise  sufficient  funds to cover the cost of
operations,  it is likely  that any  independent  accountant's  report on future
financial statements will include a similar explanatory paragraph.

Change in Business  Model.  During the second quarter of fiscal 2001, we changed
our sales strategy to a time-based  internet  licensing  model.  We released our
Gards product on-line late in the third quarter in December 2000. Our SC product
was released after the end of the third quarter in January 2001. We released our
Linux version of Gards during fiscal year 2002.  There can be no assurance  that
this new time-based internet licensing model will be successful.

Dependence  on Certain  Customers.  A small  number of  customers  account for a
significant  percentage  of our total  revenue.  There can be no assurance  that
sales to  these  entities,  individually  or as a group,  will  reach or  exceed
historical levels in any future period. Any substantial decrease in sales to one
or more of these customers could have a material adverse effect on our business,
operating results or financial condition.

Insurance  coverage  termination.  We no longer carry  director's  and officer's
insurance coverage or property and liability insurance  coverage.  If we were to
incur losses from fire,  other  casualty or product  liability  occurrences,  it
could have a material  adverse effect on our business,  financial  condition and
operating results.

New  Products  and Rapid  Technological  Change;  Risk of Product  Defects.  The
Electronic Design Automation ("EDA") industry is characterized by the following:

                                       13
<PAGE>

o    extremely rapid technological change

o    frequent new product introductions and enhancements

o    evolving industry standards

o    rapidly changing customer requirements

The development of more complex  integrated  circuits with new technologies will
require more  sophisticated  design tools. The success of our future  operations
partly depends upon our ability to enhance  current  products and to develop and
introduce new products on a timely and  cost-effective  basis.  Our products and
services must keep pace with  technological  developments and evolving  industry
standards and methodologies,  as well as address the increasingly  sophisticated
needs of our  customers.  During  fiscal 2003,  we will have an  aggressive  new
product release and current product update program,  upon which expected revenue
increases  are  partially  based.  It is  possible  that in the  future,  we may
experience delays in new product development and product  enhancements.  We have
experienced  similar  delays in the past.  Such  delays  would  likely  decrease
expected fiscal 2003 revenues,  which could cause us to incur losses and utilize
our available cash or even run out of cash.

In fiscal  2002,  we announced  new products  offered on the e*ECAD Web service.
However, there is no guarantee that:

o    these new products will gain market acceptance

o    we will be successful in developing and marketing product enhancements

o    we will be  successful  in  developing  other new products  that respond to
     technological  change,  evolving  industry  standards and changing customer
     requirements

o    we will  not  experience  difficulties  that  could  delay or  prevent  the
     successful  development,  introduction  and marketing of these  products or
     product enhancements

o    new products and product enhancements will adequately meet the requirements
     of the marketplace and achieve any significant degree of market acceptance

All of our present products  operate in the Unix and/or Linux operating  systems
and we intend for all future products to operate in the Unix and Linux operating
systems. In the event that another operating system, such as Windows NT, were to
achieve broad  acceptance in the EDA industry,  we would be required to port our
products.  This  would be costly  and time  consuming  and could have a material
adverse effect on our business,  operating results or financial condition. If we
fail to develop and introduce new products and product  enhancements in a timely
and  cost-effective  manner,  for technological or other reasons,  it could also
have  material  and  adverse  effects on our  business,  operating  results  and
financial  condition.  Introducing or even  announcing new products by us or our
competitors,  including  new  technologies  or changes in industry  standards or
customer  requirements,  could  render  some  or all of  our  existing  products
obsolete or  unmarketable.  Furthermore,  customers might defer purchases due to
the  introduction  or  announcement,  which  would also have a material  adverse
effect on our business, operating results or financial condition.

Complex software  products,  such as those we offer, can contain defects or even
fail when introduced or released.  We have, in the past,  discovered  defects in
certain of our products.  We may experience delays or lost revenue in connection
with repairs and corrections of defects found in the future. Although to date we
have not  experienced  material  adverse effects  resulting from defects,  it is
possible in the future that despite testing,  errors will go undiscovered in new
products or releases  until after  shipment.  These errors may result in loss of
market share or failure to achieve market acceptance.  If this were to occur, it
could have a material  adverse  effect upon our business,  operating  results or
financial condition.

Delisting From NASDAQ; Disclosure Relating to Low-Priced Stock. Our common stock
was delisted from trading on the NASDAQ  National  Market November 16, 1998. Our
common stock  immediately  began trading on the OTC Bulletin Board. As a result,
our ability to obtain additional  financing through the issuance of common stock
or securities convertible into common stock may be adversely affected. Investors
might find that disposing of our common stock is more difficult than is has been
in the past.  The trading price of our common stock is currently less than $5.00
per share.  Because the common  stock falls into the  category  defined as penny
stock,  trading  in the common  stock is  currently  subject  to  certain

                                       14
<PAGE>

rules promulgated under the Exchange Act, which require additional disclosure by
broker-dealers.  These rules  require us, in advance of trading,  to provide you
with disclosure  schedules,  which explain the penny stock market and associated
risks.  The rules impose various sales practice  requirements on  broker-dealers
who  sell  penny  stock.   Broker-dealers   engaging  in  some  types  of  these
transactions  must make a special  suitability  determination  and  obtain  your
written  consent  prior  to  sale.   This   additional   burden  may  discourage
broker-dealers from actively  effectuating  common stock transactions,  which in
turn could have the adverse effect of severely limiting the marketability of our
common  stock.   Therefore,   the  ability  of  Silicon  Valley  Research,  Inc.
shareholders  to resell  their  stock  would be  limited.  In turn,  this  could
adversely effect our ability to obtain future equity financing.

Possible  Volatility  of Stock  Price.  The market price of our common stock has
been volatile.  The following  events could cause the market price of our common
stock to fluctuate substantially:

o    future announcements concerning our competitors or its quarterly variations
     in operating results

o    the introduction of technological innovations,  new products, or changes in
     product pricing policies

o    proprietary rights or other litigation, or

o    changes in earnings estimates by analysts or other factors

The stock market has from time to time experienced  significant price and volume
fluctuations  that have  particularly  affected the market prices for the common
stocks of technology  companies like ours.  These  fluctuations  have often been
unrelated to the operating performance of particular companies.

In the past,  shareholder  class action suits have been filed against  companies
following periods of volatility of stock price.  Litigation of this nature could
occur in our future. Litigation often diverts management attention and resources
and is costly to the company. If we were placed in this position,  it could have
a material  adverse  effect on our business,  financial  condition and operation
results. Significant liabilities are always possible effects of litigation.

Potential  Fluctuations in Quarterly  Operating  Results.  Numerous  factors may
materially and unpredictably affect our operating results, including:

o    uncertainties of the size and timing of software license fees

o    timing of co-development projects with customers

o    timing of operating expenditures

o    increased competition

o    new product announcements and releases by us and our competitors

o    gain or loss of significant customers or distributors

o    expense levels

o    renewal of maintenance contracts

o    pricing changes by us or our competitors

o    personnel changes

o    foreign currency exchange rates

o    economic conditions generally and in the electronics industry specifically

Any unfavorable  change in these or other factors could have a material  adverse
effect on our operating results for a particular quarter.  Many of our customers
order on an as-needed  basis and often delay  delivery of firm  purchase  orders
until their project  commencement dates are determined.  As a result, we operate
with no significant backlog. Therefore,  quarterly revenue and operating results
will  depend on the  volume and timing of orders  received  during the  quarter,
which  are  difficult  to  forecast  accurately.  Historically,  we  have  often
recognized a  substantial  portion of license  revenues in the last month of the
quarter,  with these revenues  frequently  concentrated in the last two weeks of
the  quarter.  Operating  results  would  be  disproportionately  affected  by a
reduction in revenue because only a small portion of expenses vary with revenue.
Operating  results in any  period  should not be  considered  indicative  of the
results  to be  expected  for any future  period.  Our  revenues  may or may not
increase.

                                       15
<PAGE>

Lengthy Sales Cycle. The licensing and sale of our software  products  generally
involve a significant commitment of capital from prospective  customers.  Delays
are frequently associated with large capital expenditures and lengthy acceptance
procedures.  For these and other reasons,  the sales cycle  associated  with the
licensing  of our  products  is  typically  lengthy  and  subject to a number of
significant risks over which we have little or no control. Because the timing of
customer orders is hard to predict,  we believe that quarterly operating results
are  likely to vary  significantly  in the  future.  Actual  results  could vary
materially as a result of a variety of factors, including, without limitation:

o    the high average selling price and long sales cycle for our products

o    the relatively small number of orders per quarter

o    dependence on sales to a limited number of large customers

o    timing of receipt of orders

o    successful product introduction

o    acceptance of our products and increased competition

Dependence Upon Semiconductor and Electronics  Industries;  General Economic and
Market  Conditions.   Silicon  Valley  Research,  Inc.  is  dependent  upon  the
semiconductor  and, more generally,  the electronics  industries.  Each of these
industries is characterized by rapid  technological  change,  short product life
cycles,  fluctuations  in  manufacturing  capacity  and  pricing.  Each of these
industries  is highly  volatile  and has  periodically  experienced  significant
downturns.  Often in connection with, or in anticipation of, declines in general
economic conditions,  the number of new integrated circuit design projects often
decreases. Customer purchases of new licenses from us are largely dependent upon
the commencement of new design  projects.  Factors  negatively  affecting any of
these industries could have a material adverse effect on our business, operating
results or financial  condition.  Our business,  operating results and financial
condition  may in the future  reflect  substantial  fluctuations  from period to
period  due  to  patterns  and  general   economic   conditions  in  either  the
semiconductor or electronics industry.

International  Sales.  International  sales,  primarily  in  Japan  and  Taiwan,
accounted for  approximately  3% of the total revenue in fiscal 2001. There were
no  international  sales  during  fiscal  year  2002.  Declining  revenues  from
international  sales  resulted  primarily  from  closure of our Tokyo  office in
December 1998,  and Taiwan office in March 1999 brought  about,  in part, by the
reduction in capital expenditures by semiconductor  manufacturers,  particularly
in Asia  and  increased  competition  in the EDA  software  market.  We plan for
international  sales to account for a portion of revenue  during fiscal 2003, as
had been the case prior to fiscal 2000. However,  this revenue involves a number
of inherent risks, including:

o    economic downturn in the electronics industry in Asia

o    traditionally slower adoption of our products internationally

o    general strikes or other disruptions in working conditions

o    generally longer receivables collection periods

o    unexpected   changes  in  or   impositions  of  legislative  or  regulatory
     requirements

o    reduced protection for intellectual property rights in some countries

o    potentially adverse taxes

o    delays  resulting from difficulty in obtaining  export licenses for certain
     technology

o    other trade barriers

The  factors  listed  above  may  have  a  material  adverse  effect  on  future
international sales and, consequently, on operating results.

Dependence on Key Personnel.  Our success depends to a significant extent upon a
number of key technical and management employees,  in particular,  upon James O.
Benouis,  our President and Chief  Executive  Officer.  We do not currently have
"key man" life insurance on Mr. Benouis.  The loss of services of Mr. Benouis or
any of our other key employees  could have a material  adverse effect on us. Our
success  will  depend  in  large  part on our  ability  to  attract  and  retain
highly-skilled technical, managerial, sales and marketing personnel. Competition
for  such  personnel  is  intense.  There  can be no  assurance  that we will be
successful  in retaining  our key  technical  and  management  personnel  and in
attracting and retaining the personnel we require to grow.

                                       16
<PAGE>

Effect of Certain Charter Projections; Blank Check Preferred Stock. Our Board of
Directors has the  authority to issue up to 1,000 shares of preferred  stock and
to  determine  the price,  rights,  preferences,  privileges  and  restrictions,
including voting rights, without any further vote or action by shareholders. The
rights of the  holders  of the  common  stock  will be  subject  to,  and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the  future.  The  issuance of  preferred  stock,  while  providing
desirable  flexibility  in  connection  with  possible  acquisitions  and  other
corporate  purposes,  could  have the effect of making it more  difficult  for a
third party to acquire a majority of our outstanding voting stock.

Inflation. To date, inflation has not had a significant impact on the results of
our operations.

Recent  Accounting  Pronouncements.  In  June  2001,  the  Financial  Accounting
Standards  Board issued  Statements of Financial  Accounting  Standards No. 141,
Business  Combinations,  and No.  142,  Goodwill  and Other  Intangible  Assets,
effective  for fiscal years  beginning  after  December 15, 2001.  Under the new
rules,  goodwill and intangible  assets deemed to have indefinite  lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statements.  Other intangible assets will continue to be amortized over
their  useful  lives.  The Company  will apply the new rules on  accounting  for
goodwill and other  intangible  assets  beginning in the first quarter of fiscal
2003.  The  Company  has  not yet  determined  the  effect  resulting  from  the
application of the nonamortization  provisions of the Statement on the earnings.
During 2003, the Company will perform the first of the required impairment tests
of goodwill and indefinite lived  intangible  assets as of April 1, 2002 and has
not yet  determined  what the effect of these tests will be on the  earnings and
financial position of the Company.

In August 2001, the FASB issued SFAS No. 143,  "Accounting for Asset  Retirement
Obligations."  SFAS 143  establishes  accounting  standards for  recognition and
measurement of a liability for the costs of asset retirement obligations.  Under
SFAS 143,  the costs of retiring  an asset will be recorded as a liability  when
the retirement obligation arises, and will be amortized to expense over the life
of the asset.  We do not expect any effect on our financial  position or results
of operations from the adoption of this statement.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of  Long-Lived  Assets." SFAS 144 addresses  financial  accounting  and
reporting for the impairment or disposal of long-lived  assets and  discontinued
operations.  We do not expect any effect on our financial position or results of
operations from the adoption of this statement.

In December 1999, the SEC issued Staff Accounting  Bulletin No. 101 ("SAB 101"),
Revenue Recognition in Financial  Statements." SAB 101 summarizes certain of the
SEC's views in applying  generally  accepted  accounting  principles  to revenue
recognition in financial  statements.  SAB 101 was adopted during the year ended
March 31, 2001.  The  adoption of SAB 101 did not have a material  effect on the
Company's financial position or results of operations.

                                       17
<PAGE>

Item 7.  Unaudited Financial Statements and Financial Statement Schedules

Index to Unaudited Financial Statements and Financial Statement Schedules

Our  financial  statements  included  in this  Annual  Report on Form 10K-SB are
unaudited as described  further in footnote 1. We will file an amendment to this
annual report once we have been able to complete our audit.

Financial Statements:

<TABLE>
<CAPTION>
<S>                                                                                          <C>
         Report of Management                                                                19

         Unaudited Consolidated Balance Sheet as of March 31, 2002                           20

         Unaudited Consolidated Statements of Operations for the years ended March 31,
              2002 and 2001                                                                  21

         Unaudited Consolidated Statements of Changes in Shareholders' Equity for the
              Years ended March 31, 2002 and 2001                                            22

         Unaudited Consolidated Statements of Cash Flows for the years ended March 31,
              2002 and 2001                                                                  23

         Notes to Unaudited Consolidated Financial Statements                                24-35
</TABLE>

All other financial  statement schedules have been omitted since they are either
not required,  not applicable or the  information  is otherwise  included in the
consolidated financial statements or notes thereto.

                                       18
<PAGE>

Report of Management

To Our Shareholders:

The  unaudited  consolidated  financial  statements  have been  prepared  by the
Company, and we are responsible for their content. They have NOT been audited by
our  outside  independent  accountants.  We have  attempted  as best we could to
prepare them in conformity with generally accepted accounting principles, and in
this regard we have undertaken to make informed  judgments and estimates,  where
necessary, of the expected effects of events and transactions. As such, they are
subject to  adjustment  as a result of their  audit by our  outside  independent
accountants.


                                          James O. Benouis
                                          President and
                                          Chief Executive Officer


San Jose, California
July 15, 2002

                                       19
<PAGE>

                  SILICON VALLEY RESEARCH, INC. and subsidiarY
                      Unaudited Consolidated Balance Sheet
                                 (in thousands)

                                                                March 31, 2002
                                                                --------------
Assets

Current Assets
Cash and cash equivalents                                         $      2
Accounts receivable, net of allowances of $50                            8
Prepaid expenses and other current assets                               19
                                                                  --------
                                                                        29

Fixed assets, net                                                      103
Other assets, net                                                      144
                                                                  --------
                                                                  $    276
                                                                  ========

Liabilities and Shareholders' Equity

Current Liabilities
Notes payable                                                     $     25
Accounts payable                                                       353
Accrued expenses                                                       620
Deferred revenue                                                        25
                                                                  --------
                                                                     1,023
                                                                  --------

Long-term debt, less current portion                                   926
                                                                  --------

Deferred tax liability                                                  13
                                                                  --------

Commitments  and contingencies (Note 7)

Shareholders' Equity
Preferred stock, no par value;
      authorized:  1,000 shares;
      issued and outstanding: none                                    --
Common stock,  no par value;
      authorized:  60,000 shares;
      issued and outstanding: 44,683 shares                         46,310
Accumulated deficit                                                (47,996)
                                                                  --------
                                                                    (1,686)
                                                                  --------

                                                                  $    276
                                                                  ========

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       20
<PAGE>
                          SILICON VALLEY RESEARCH, INC.
                 Unaudited Consolidated Statements of Operations
                      (in thousands, except per share data)

                                                       Years Ended March 31,

                                                           2002       2001
                                                           ----       ----

Revenue
License fees and other                                 $    221   $     45
Maintenance and services                                    843      1,137
                                                       --------   --------
         Total revenue                                    1,064      1,182
                                                       --------   --------

Cost of revenue
License fees and other                                      124        217
Maintenance and services                                    382        730
                                                       --------   --------
         Total cost of revenue                              506        947
                                                       --------   --------

Gross margin                                                558        235
                                                       --------   --------

Operating expenses
Engineering, research and development                       629        835
Selling and marketing                                       593        578
General and administrative                                  775        745
                                                       --------   --------
         Total operating expenses                         1,997      2,158
                                                       --------   --------

Operating loss                                           (1,439)    (1,923)
                                                       --------   --------

Other income (expense)
Interest income                                            --            9
Interest expense                                           (115)      (124)
Other, net                                                 --          (32)
                                                       --------   --------
         Total other income (expense)                      (115)      (147)
                                                       --------   --------

Loss before provision for income taxes                   (1,554)    (2,070)

Provision for income taxes                                  (22)        15
                                                       --------   --------

Net loss                                               $ (1,532)  $ (2,085)
                                                       ========   ========

Net loss per basic and diluted share                   $  (0.04)  $  (0.06)
                                                       ========   ========

Weighted-average common shares
outstanding (basic and diluted)                          42,759     36,616
                                                       ========   ========

              The accompanying notes are an integral part of these
                       consolidated financial statements

                                       21
<PAGE>


                          SILICON VALLEY RESEARCH, INC.
            Unaudited Consolidated Statement of Shareholders' Equity
<TABLE>
<CAPTION>

                                                                       Accumulated      Other
                                      Common Stock      Accumulated    Comprehensive Comprehensive
(In thousands)                      Shares   Amount       Deficit      Income(Loss)   Income(Loss)    Total
                                    ------   ------       -------      ------------   -----------     -----
<S>                                 <C>      <C>          <C>            <C>            <C>          <C>
Balances, March 31, 2000            35,184   $ 45,284     $ (44,379)     $       --                  $    905
                                    ======    =======      ========       =========                   =======

Net loss                                --         --        (2,085)             --       (2,085)      (2,085)
                                                                                        --------
Comprehensive income(loss)              --         --            --              --    $  (2,085)          --
                                                                                        ========
Common stock issued under
    stock option and stock
    purchase plans                     197         32            --              --                        32
Proceeds from issuance
    of common stock                  5,238        704            --              --                       704
                                   -------    -------      --------        --------                   -------

Balances, March 31, 2001            40,619   $ 46,020     $ (46,464)     $       --                  $   (444)
                                    ======    =======      ========       =========                   =======

Net loss                                --         --        (1,532)             --       (1,532)      (1,532)
                                                                                        --------
Comprehensive income(loss)              --         --            --              --    $  (1,532)          --
                                                                                        ========
Common stock issued under
    stock option and stock
    purchase plans                   1,022         63            --              --                        63
Proceeds from issuance
    of common stock                  3,042        227            --              --                       227
                                   -------    -------      --------        --------                   -------

Balances, March 31, 2002            44,683   $ 46,310     $ (47,996)     $       --                  $ (1,686)
                                    ======    =======      ========       =========                   =======
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       22
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
                 Unaudited Consolidated Statement of Cash Flows
                                 (in thousands)

                                                           Years Ended March 31,

                                                              2002      2001
                                                              ----      ----
Cash Flows from Operating Activities:

Net loss                                                   $(1,532)  $(2,085)
Adjustments to reconcile net loss to net cash
     used in operating activities:
         Depreciation and amortization:
              Fixed assets                                      70       102
              Software licenses and development costs          143       237
         Loss on sale of fixed assets                         --           7
         Write-off of bad debts                                240       255
         Adjustment to bad debt reserve                        (35)     --
         Changes in assets and liabilities:
              Accounts receivable                              264       161
              Other receivable                                 151      --
              Prepaid expenses and other current assets        171      (221)
              Accounts payable                                  20        67
              Accrued expenses                                 368       (38)
              Deferred revenue                                 (66)       82
              Other, net                                        32       106
                                                           -------   -------
Net cash used in operating activities                         (174)   (1,327)
                                                           -------   -------

Cash Flows from Investing Activities:

Acquisition of fixed assets                                     (9)     (150)
Capitalization of software development costs and
     purchase of software licenses                             (60)      (45)
                                                           -------   -------
Net cash used in investing activities                          (69)     (195)
                                                           -------   -------

Cash Flows from Financing Activities:

Short-term borrowings                                         (148)      148
Proceeds from issuance of common stock and warrants            290       662
                                                           -------   -------
Net cash provided by financing activities                      142       810
                                                           -------   -------

Net increase (decrease) in cash and cash equivalents          (101)     (712)
Cash and cash equivalents at beginning of year                 103       815
                                                           -------   -------

Cash and cash equivalents at end of year                   $     2   $   103
                                                           =======   =======

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       23
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                     (in thousands, except share price data)

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Financial Statements

THESE FINANCIAL  STATEMENTS  HAVE NOT BEEN AUDITED.  Management has attempted to
prepare them in accordance with generally accepted accounting principles. In the
opinion  of  management,  the  consolidated  financial  statements  include  all
adjustments  necessary to present fairly the  consolidated  financial  position,
results of  operations  and cash  flows for the  interim  period  since our last
audit.  These financial  statements may not include all disclosures  required by
generally  accepted  accounting  principles and  accordingly,  should be read in
conjunction  with the  consolidated  financial  statements and notes included as
part of the  Company's  latest  annual report on Form 10-KSB for the fiscal year
ended March 31, 2001.

We were  unable to  complete  our FY2002  audit  because we do not have the cash
required to pay our former  accountants  who have  otherwise  refused to release
their work papers.  Unless circumstances  change, we will not be able to rectify
the situation  until we have enough cash to work out a successful  payment plan.
We cannot be certain when,  if ever,  this will be.  Reviewing  work papers from
prior audits is an important component of an audit as it enables verification of
opening  balances in various  accounts,  a review of account analyses from prior
periods in part to ensure  consistency,  and a review of internal  controls  and
procedures  then in effect to determine  whether  there have been changes in the
current period.


Business

The Company designs,  develops, and markets a series of advanced  computer-aided
design  software  products  for use by  electronic  engineers  in the design and
engineering  of integrated  circuits and operates in one industry  segment.  The
Company  also  provides  the IC design  industry a  comprehensive  set of design
project support services  encompassing  nearly all aspects of the IC development
process, including cell-based APR, FPGA to Gate Array conversion,  custom analog
and digital layout and chip assembly  capability,  and CAD/EDA tool  application
methodology consulting services.

The Company has incurred  significant  losses for the last two fiscal years from
operations  and does not believe that cash and cash  generated  from  operations
will be sufficient to finance  operations through fiscal 2003 without additional
working capital.  The Company is exploring financing  alternatives to supplement
its cash position.  Potential  sources of additional  financing  include private
equity financings,  mergers,  strategic  investments,  strategic partnerships or
various forms of debt financings.  The Company has recently  introduced  updated
versions of its existing products and has plans to continue  developing enhanced
software  products.  There can be no assurance  that the Company will be able to
execute  additional  forms of  financing  or that  the  Company  will not  incur
additional  losses until its recently  introduced and existing products generate
significant  revenue.  These events raise  substantial doubt about the Company's
ability to continue as a going concern.  The  accompanying  unaudited  financial
statements  have been  prepared  assuming the Company  will  continue as a going
concern.  The  accompanying  unaudited  financial  statements do not include any
adjustments that might result from the outcome of these uncertainties.

Basis of Presentation

The  unaudited  consolidated  financial  statements  include the accounts of the
Company  and  its  subsidiary:   Quality  I.C.   Corporation.   All  significant
intercompany  accounts and transactions have been eliminated.  Minority interest
in net assets and income (loss) for the years then ended are not significant.

Revenue Recognition

Revenues  comprise license fees for the Company's  software  products (except in
Japan where revenues comprise sales of the Company's software products) and fees
for services  complementing  its  products,  including  annual  maintenance  and
support, training and consulting. Revenue also includes design services.

Revenue is recognized when earned.  The Company's revenue  recognition  policies
are in  compliance  with  American  Institute  of Certified  Public  Accountants
Statements of Position 97-2 and 98-4, Software Revenue Recognition and SEC Staff
Accounting  Bulletin  101.  Revenue  from  licenses is  recorded  when a license
agreement has been executed,  the software has been delivered or shipped and the
customer  is  invoiced.  Software  maintenance  revenue,  including  maintenance
revenue bundled with the initial product license revenue,  is recognized ratably
over the  contract  period.  The  maintenance  revenue  bundled with the initial
product license  revenue is unbundled  based on prices for which  maintenance is
sold separately to customers. The maintenance component has not been significant
in the past.  Training,  consulting and design  revenues are recognized as these
services are performed.

                                       24
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)
Use of Estimates

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
reported  amounts of revenues and expenses  during the reported  period.  Actual
results could differ materially from those estimates. Significant estimates used
in these  financial  statements  relate to realization  of capitalized  software
development costs and software licenses. It is at least reasonably possible that
management's estimate of revenue from software licenses could change in the near
term,  which could have a material  adverse  effect on the  Company's  financial
condition and results of operations.

Cash and Cash Equivalents

Cash and cash  equivalents  in the  statement  of cash flows and  balance  sheet
include cash on hand and  investments  with original or remaining  maturities at
the date of purchase of 90 days or less.

Concentration of Credit Risk

Financial  instruments  that  potentially  subject  the  Company to  significant
concentration of credit risk consists  principally of accounts  receivable.  The
composition  of  the  Company's   accounts   receivable   with  respect  to  the
semiconductor industry is characterized by generally short collection terms. The
Company's  accounts  receivable are derived from revenues  earned from customers
located primarily in the United States and Asia. Generally, the Company performs
ongoing  evaluation of its customer's  financial  condition and does not require
collateral,  allowances  for  potential  credit losses are  maintained  and such
losses  have been  within  management's  expectations.  At March 31,  2002,  two
customers accounted for 97% of the Company's total receivables.

Engineering, Research and Development Costs

Engineering,  research and development costs consist principally of research and
development  expenditures  in  connection  with new  products,  improvements  to
existing products,  maintenance, and documentation,  all of which are charged to
expense as incurred.

The Company capitalizes  software  development costs incurred after establishing
technological  feasibility  of the  product  (using the  working  model  concept
method) until the product is available for general release.

Capitalized  software  development  costs are  amortized and included in cost of
license fees and other revenues  using the greater of the amount  computed using
the ratio that current gross revenues for a product bear to the total of current
and  anticipated  future gross  revenues for that product or on a  straight-line
basis over the expected economic life of the product,  generally estimated to be
30 months.

Fixed Assets

Fixed  assets are  recorded at cost.  Equipment  acquired  under  capital  lease
obligations  is recorded at the lower of fair market value or the present  value
of the future minimum lease payments at the inception of the lease. Depreciation
of fixed assets is computed on the  straight-line  basis over  estimated  useful
lives of three to five years.  Leasehold  improvements  are  amortized  over the
shorter of their estimated useful lives or the remaining lease term. Capitalized
leases are generally  amortized over the shorter of the life of the lease or the
life  of  the  asset.   Software   licenses  are  generally   amortized  on  the
straight-line basis over 30 months.

                                       25
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)
Earnings Per Share

The Company has adopted  Statement of  Financial  Accounting  Standards  No. 128
"Earnings  per Share" (FAS 128).  Under FAS 128,  the Company  presents  two EPS
amounts.  Basic EPS is calculated based on income or loss to common shareholders
and the  weighted-average  number  of shares  outstanding  during  the  reported
period.  Diluted EPS includes additional dilution from common stock equivalents,
such as stock  issuable  pursuant to the exercise of stock options and warrants.
Common  stock  equivalents  were not  included  in the  computation  of  diluted
earnings per share when the Company  reported a loss because to do so would have
been antidilutive for the periods presented.

The following is a reconciliation of the computation for basic and diluted EPS:

                                                           Year ended March 31,
                                                           -------------------

(in thousands)                                              2002         2001
                                                            ----         ----

Net loss                                                 $ (1,532)     $ (2,085)
                                                         ========      ========

Weighted-average common shares
     outstanding (basic)                                   42,759        36,616
Weighted-average common stock equivalents:
     Stock options                                           --            --
     Warrants                                                --            --
                                                         --------      --------
Weighted-average common shares
     outstanding (diluted)                                 42,759        36,616
                                                         ========      ========

Options to purchase  5,076 shares of common stock at prices  ranging from $0.054
to $1.43 per share were  outstanding at March 31, 2002, but were not included in
the computation of diluted EPS because inclusion of such options would have been
antidilutive.

Income Taxes

Income taxes are computed using the asset and liability method.  Under the asset
and liability method,  deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax basis of assets
and liabilities and are measured using the currently enacted tax rates and laws.

                                       26
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

Stock-Based Compensation Plans

The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance  with the provisions of Accounting  Principles  Board Opinion No. 25,
"Accounting  for Stock Issued to  Employees,"  ("APB 25") and complies  with the
disclosure  provisions of Statement of Financial  Accounting  Standards No. 123,
"Accounting  for  Stock  Based   Compensation"   ("FAS  123").   Under  APB  25,
compensation cost is recognized over the vesting period based on the difference,
if any,  on the date of grant  between the fair  market  value of the  Company's
stock and the amount an employee  must pay to acquire the stock.  The  Company's
policy is to grant  options  with an exercise  price equal to the closing  trade
price of the Company's stock on the grant date. Accordingly, no compensation has
been recognized for its stock option plans.

Recent Accounting Pronouncements

In June 2001,  the Financial  Accounting  Standards  Board issued  Statements of
Financial  Accounting  Standards No. 141,  Business  Combinations,  and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill and intangible assets deemed to
have indefinite  lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the Statements. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
rules on accounting for goodwill and other  intangible  assets  beginning in the
first  quarter of fiscal  2003.  The Company has not yet  determined  the effect
resulting  from  the  application  of  the  nonamortization  provisions  of  the
Statement on the  earnings.  During 2003,  the Company will perform the first of
the required impairment tests of goodwill and indefinite lived intangible assets
as of April 1, 2002 and has not yet  determined  what the effect of these  tests
will be on the earnings and financial position of the Company.

In August 2001, the FASB issued SFAS No. 143,  "Accounting for Asset  Retirement
Obligations."  SFAS 143  establishes  accounting  standards for  recognition and
measurement of a liability for the costs of asset retirement obligations.  Under
SFAS 143,  the costs of retiring  an asset will be recorded as a liability  when
the retirement obligation arises, and will be amortized to expense over the life
of the asset.  We do not expect any effect on our financial  position or results
of operations from the adoption of this statement.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of  Long-Lived  Assets." SFAS 144 addresses  financial  accounting  and
reporting for the impairment or disposal of long-lived  assets and  discontinued
operations.  We do not expect any effect on our financial position or results of
operations from the adoption of this statement.

In December 1999, the SEC issued Staff Accounting  Bulletin No. 101 ("SAB 101"),
Revenue Recognition in Financial  Statements." SAB 101 summarizes certain of the
SEC's views in applying  generally  accepted  accounting  principles  to revenue
recognition in financial  statements.  SAB 101 was adopted during the year ended
March 31, 2001.  The  adoption of SAB 101 did not have a material  effect on the
Company's financial position or results of operations.

NOTE 2   FIXED ASSETS

Fixed assets comprise:                                            March 31, 2002
                                                                  --------------

Computer equipment                                                   $  995
Office equipment and furniture                                          364
                                                                     ------
                                                                      1,359
Less accumulated depreciation and amortization                       (1,256)
                                                                     ------
                                                                     $  103
                                                                     ======

There  are no  fixed  assets  acquired  under  capital  leases  included  above.
Depreciation  expense  for the years  ended March 31, 2001 and 2002 was $102 and
$70, respectively.

                                       27
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

NOTE 3   OTHER ASSETS

Other assets comprise:                                          March 31, 2002
                                                                --------------
Software development costs                                         $ 1,047
Software licenses                                                      979
                                                                   -------
                                                                     2,026
Less accumulated  amortization                                      (1,957)
                                                                   -------
                                                                        69
Goodwill                                                                49
Other                                                                   26
                                                                   -------
                                                                   $   144
                                                                   =======

Software  development costs  capitalized  during 2001 and 2002 were $45 and $60,
respectively. The related amortization during the years ended March 31, 2001 and
2002 was $217 and $123,  respectively.  Other consists  primarily of deposits on
facilities and deferred taxes.

Note 4   COMPREHENSIVE INCOME (LOSS)

The Company has adopted  Statement of Financial  Accounting  Standards  No. 130,
"Reporting  Comprehensive  Income."  This  Statement  requires  that  all  items
recognized under accounting standards as components of comprehensive earnings be
reported  in an  annual  financial  statement  that is  displayed  with the same
prominence as other annual  financial  statements.  This Statement also requires
that an entity classify items of other comprehensive earnings by their nature in
an annual financial statement.  Other comprehensive  earnings in these financial
statements include foreign currency translation adjustments. The Company's total
comprehensive earnings were as follows:

                                                               March 31,
                                                           2002            2001
                                                           ----            ----
Net loss                                                $(1,532)        $(2,085)
Other comprehensive gain(loss)                                0               0
                                                        -------         -------
Total comprehensive income (loss)                       $(1,532)        $(2,085)
                                                        =======         =======

NOTE 5   ACCRUED EXPENSES

Accrued expenses comprise:                                   March 31, 2002
                                                             --------------
Accrued payroll and related costs                                $  405
Accrued interest                                                    170
Other                                                                45
                                                                 ------
                                                                 $  620
                                                                 ======

Other consists of accruals related to expenses  incurred in the normal course of
business, such as interest and sales expenses.

NOTE 6   BANK BORROWINGS AND LONG-TERM DEBT

Long-term debt comprise:                                        March 31, 2002
                                                                --------------
Notes payable                                                        $926
Less current portion                                                  --
                                                                     ----
                                                                     $926
                                                                     ====

In June 1999,  the Company  began a  subordinated  debt/warrant  financing.  The
financing  included  approximately  $1,000 of  three-year  notes and the sale of
approximately  8,000  Warrants  at $0.01  per  Warrant.  The debt  bears  simple
interest of 10% and the Warrants  have a five-year  term with an exercise  price
per share of $0.125. This financing  transaction  consists of two closings.  The
first  closing  took  place on June 7,  1999.  The  Company  received  $768 cash
proceeds from this closing.  This included $711 of three-year notes and the sale
of approximately 5,700 Warrants at $0.01 per Warrant. The second closing

                                       28
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

was to have  taken  place on July 15,  1999.  The  closing  was  extended  until
September  24,  1999  pending  negotiation  of a  workout  with  the  Creditors'
Committee  through the Credit Managers'  Association to resolve accounts payable
issues that was satisfactory to the majority of the investors.  An agreement was
reached and the  Company  received  approximately  $312 cash  proceeds  from the
second closing.  The Company has used part of the proceeds from the financing to
complete  the  Settlement  Agreement  with its lender and to pay other  accounts
payable and used the balance of the  proceeds to help fund its  operations.  The
Company's  CEO, the Company's  Chairman of the Board,  an affiliate of a Company
director and two Company 10%  shareholders  participated  in the financing.  The
maturity  date on these notes has been extended and the notes will mature during
the fiscal year ending March 31, 2005.

In January  2001,  the Company  entered into an Agreement  with its bank for the
purchase of the Company's receivables. The agreement provides that the bank will
purchase up to $250 of the Company's domestic accounts receivable. The bank will
advance  the  Company  80% of  qualified  receivables.  In the  event  that  the
Company's  customers do not pay on the invoices  within 90 days of invoice date,
the Company may be  required to return the amounts  advanced to the bank.  There
were no amounts outstanding under the agreement at March 31, 2002.

NOTE 7   COMMITMENTS AND CONTINGENCIES

The  Company  leases its  corporate  headquarters  and IC design  offices in the
United States under  operating  leases  expiring March 31, 2005.  Non-cancelable
rental payments over the term of leases exceeding one year are as follows:

                         2003              $       66
                         2004                      12
                         2005                       2
                         2006                     ---
                                           ----------

                                           $       80
                                           ==========

The  Company  is  generally  responsible  for  its  pro  rata  share  of  taxes,
maintenance and insurance on the facilities.  Rental expense aggregated $191 and
$158 in 2001 and 2002, respectively.

As with other companies in industries similar to Silicon Valley Research,  Inc.,
the Company is subject to the risk of adverse claims and litigation on a variety
of matters, including infringement of intellectual property,  intentional and/or
negligent misrepresentation of material facts and breach of fiduciary duties.

NOTE 8   LEGAL ACTION

The  Company  filed a  complaint  in the United  States  District  Court for the
Northern  District of California on August 10, 2001 against  Avant!  Corporation
and certain of its  employees  for unfair  competition,  tortious  interference,
false  advertising,  receipt and  concealing  of stolen  goods,  conspiracy  and
violations  of  federal  racketeering  laws.  This  civil  action  arises out of
Avant!'s theft of computer code and trade secrets from Cadence  Corporation  and
use of those stolen products to compete with SVR.

Avant!  Corporation  recently  was found  guilty of theft of trade  secrets  and
conspiracy to steal and use the trade secrets of Cadence  Corporation during the
period of 1991 through  1998,  and of having  engaged in fraud and deceit in the
offer and sale of a security after entering a plea of no contest  thereto on May
16,  2001.  A  restitution  award of  approximately  $195 million was awarded to
Cadence Corporation in the criminal case, and Cadence is awaiting the lifting of
a stay in its civil suit against Avant! Corporation.

The Company has  determined  it necessary  to undertake  this legal action in an
attempt  to  recoup  damages  caused  by  Avant!'s  conduct,  including  damages
resulting  from sales of SVR place and route  software  lost  directly to Avant!
Corporation. Avant! Corporation sold place and route software that

                                       29
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

contained Cadence  Corporation's  stolen computer code and trade secrets head to
head  against  SVR's  software,   and  this  unfair  advantage   allowed  Avant!
Corporation  to acquire a significant  amount of the Company's  sales and market
share.

SVR has retained David H. Donaldson, Jr. and Peter Kennedy of the Texas law firm
of George & Donaldson,  LLP and Craig Needham of the California firm of Needham,
Davis,  Kirwan & Young,  LLP to represent it in this matter on a contingency fee
arrangement.

Avant!  Corporation,  in addition to filing its own Motion to Dismiss,  has also
joined Defendant Stephen Wuu's Motion to Dismiss, moving to dismiss each and all
of SVR's claims against both parties.  On December 14, 2001,  Judge Ronald Whyte
heard  Avant!'s and Stephen Wuu's Motions to Dismiss,  but did not make a ruling
from the bench.  The judge  could  make a ruling in the  future  with no further
input from either parties,  or the judge could request  additional briefs and/or
additional  hearings  in the matter  before  making his ruling on the Motions to
Dismiss. Additionally, all parties have stipulated that they will participate in
the Alternative  Dispute  Resolution  process of a private  mediation,  with the
mediation provider to be determined.

Management  believes that the ultimate resolution of the disputes and litigation
matters discussed above will not have a material adverse impact on the Company's
financial position or results of operations.

NOTE 9   SAVINGS AND INVESTMENT PLAN

The Company has the Silicon Valley  Research,  Inc.  Savings and Investment Plan
and Trust  ("the  Plan"),  qualified  under  Sections  401(k)  and 401(a) of the
Internal  Revenue Code.  The Plan  provides for  tax-deferred  automatic  salary
deductions  and  alternative  investment  options.  Employees  are  eligible  to
participate after completion of two months of employment. Participants may apply
for loans from their accounts.

The Plan  permits  Company  contributions  determined  annually  by the Board of
Directors.  Contributions authorized, if any, will not exceed amounts allowed by
Internal  Revenue Code  Section 404.  Allocation  of employer  contributions  to
participant's  accounts is  determined  by the Board of Directors at the time of
contribution.  The Company made no  contributions to the Plan during fiscal 2001
and 2002.  Administrative  costs paid by the Company were  insignificant  during
fiscal 2001 and 2002.

NOTE 10  CAPITAL STOCK

Preferred Stock

The  Company's  Board of Directors has the authority to issue up to 1,000 shares
of preferred stock and to determine the price, rights,  preferences,  privileges
and restrictions, including voting rights, without any further vote or action by
the Company's shareholders.

Stock Options

At March 31,  2002,  the Company has  reserved  5,971 shares of common stock for
issuance under its Employee Stock Option Plan and Directors'  Stock Option Plan.
Options  are  granted  under  the  Employee  Stock  Option  Plan by the Board of
Directors at an exercise  price equal to the fair market value as  determined by
the closing trading price on the grant date.  Generally,  the shares pursuant to
the options vest in equal monthly  installments  over four years  commencing one
month from date of grant.

Under the Directors' Stock Option Plan, options are granted automatically on the
effective date of the Plan to existing Board of Director members or upon initial
election or  appointment  of a member of the Board of Directors for 45 shares of
the  Company's  common  stock,  and  thereafter  annually  for 9  shares  of the
Company's  common  stock at an exercise  price equal to the fair market value as
determined by the

                                       30
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

closing trading price on the grant date.  Generally,  25% of the shares pursuant
to the options vests one year from the date of grant with the  remaining  shares
vesting in equal monthly installments over the next three years.

At March 31, 2002, options to purchase 1,132 shares of common stock were vested,
and 448 shares of common stock were available for future grant.

In November  2001,  the Board of Directors  approved a proposition to reduce the
exercise price of all employees' and consultants'  stock options  outstanding to
$0.054 per share,  the fair market  value of the  Company's  common  stock as of
November 19, 2001. As a result of such modification, all options eligible to the
offer are subject to variable  plan  accounting  until the option is  exercised,
cancelled or expired.  Any future  increase in stock market price will result in
additional  compensation  expense. For fiscal year 2002, the Company recorded $1
compensation expense related to repricing of stock options.

The following table summarizes stock option activity under the Company's Plans:

<TABLE>
<CAPTION>
                                                 For the year ended              For the year ended
                                                    March 31, 2002                 March 31, 2001
                                                    --------------                 --------------

                                                          Weighted-Average                 Weighted-Average
                                              Shares      Exercise Price      Shares       Exercise Price
                                              ------      --------------      ------       --------------
<S>                                             <C>        <C>                   <C>         <C>
Outstanding at beginning of year                4,805      $     0.26            3,568       $      0.29
Granted                                         4,189            0.06            1,701              0.19
Exercised                                      (1,003)           0.05             (197)             0.16
Forfeited                                      (2,915)           0.24             (267)             0.41
                                            ---------                        ---------
Outstanding at end of year                      5,076      $     0.06            4,805       $      0.26
                                            =========                        =========

Options exercisable at year-end                 1,369                            1,846
</TABLE>

The following table summarizes  information about stock options  outstanding and
exercisable at March 31, 2002:

<TABLE>
<CAPTION>
                             Options Outstanding                                    Options Exercisable
                             -------------------                                    -------------------
                                           Weighted-
                          Shares            Average             Weighted-           Shares          Weighted-
Range of              Outstanding          Remaining            Average          Exercisable         Average
Exercise Prices         at 3/31/02      Contractual Life      Exercise Price      at 3/31/02     Exercise Price
---------------         ----------      ----------------      --------------      ----------     --------------
<S>      <C>              <C>                   <C>               <C>                <C>               <C>
$ 0.05 - $ 0.05           4,983                 8.58              $ 0.05             1,304            $ 0.05
$ 0.18 - $ 0.19              54                 7.66                0.19                31              0.19
$ 0.68 - $ 0.68               9                 7.26                0.68                 4              0.68
$ 1.43 - $ 1.43              30                 4.87                1.44                30              1.44
                          -----                 ----              ------             -----            ------
                          5,076                 8.55              $ 0.06             1,369            $ 0.09
                          =====                 ====              ======             =====            ======
</TABLE>

The Company  applies the  provisions  of APB 25 and related  interpretations  in
accounting  for  compensation  expense under the Employee Stock Option Plan, the
Directors'  Stock  Option  Plan  and  the  Employee  Stock  Purchase  Plan.  Had
compensation  expense under these plans been determined pursuant to FAS 123, the
Company's  net income  (loss) per share for the years  ended  March 31, 2001 and
2002 would have been as follows:

                                                  2001                  2002
                                                  ----                  ----

Net loss           As reported                 $(2,085)              $(1,532)
                   Pro forma                   $(2,308)              $(1,649)

                                       31
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

Net loss per share (basic)                  As reported       $(0.06)   $(0.04)
                                            Pro forma         $(0.06)   $(0.04)

Net loss per share (diluted)                As reported       $(0.06)   $(0.04)
                                            Pro forma         $(0.06)   $(0.04)

The fair value of each option  grant is estimated on the date of the grant using
the Black-Scholes  multiple  option-pricing model with the following assumptions
used for grants in 2001 and 2002, respectively;  expected volatility of 152% and
139%; weighted-average risk-free interest rates of 5.37% and 3.719%


and weighted-average  expected lives of 2.23 and 2.56. The weighted-average fair
value of options granted in 2001 and 2002 was $0.134 and $0.0461, respectively.

Warrants

The  following  warrants to purchase  shares of the  Company's  common stock are
outstanding and fully vested at March 31, 2002:

         Expiring During
         the Fiscal                                       Number of Common
         Year Ending              Exercise Price         Shares Under Warrants
         -----------              --------------         ---------------------

         3/31/03                           $0.53                  781


During the fiscal year ended March 31, 2002, 315 warrants were exercised.

Employee Stock Purchase Plan

The 1993 Employee Stock  Purchase  Plan,  under which 650 shares of common stock
have been reserved for issuance, allows substantially all employees to subscribe
to shares of  common  stock  during  participation  periods  set by the Board of
Directors at a purchase price which is the lower of 85% of the fair market value
at the beginning or the end of each period. There were 0 and 19 shares of common
stock issued under the plan in 2001 and 2002, respectively, leaving a balance of
312 shares available for issuance at March 31, 2002.

                                       32
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

NOTE 11  INCOME TAXES

The provision for income taxes consists of the following:

Years ended March 31,                                         2002          2001
                                                              ----          ----

Current:
Federal                                                      $ --           $ --
State                                                          --             --
Deferred                                                      (22)            15
Foreign                                                        --             --
                                                             ----           ----
         Total provision                                     $(22)          $ 15
                                                             ====           ====

Deferred  income taxes result from temporary  differences in the  recognition of
certain  expenses for financial and income tax  reporting.  The net deferred tax
assets at March 31 consists of the following:

                                                                          2002
                                                                          ----
Allowances and accruals not currently deductible                       $     53
Net operating losses and other credits                                   13,346
                                                                       --------
         Total deferred tax assets                                       13,399
Less: valuation allowance                                               (13,399)
                                                                       --------
         Net deferred tax asset                                        $      0
                                                                       ========

The Company has provided for a valuation  allowance  when it is more likely than
not that some  portion or all of the net  deferred  asset will not be  realized.
Based upon a number of  factors,  including  the lack of a history  of  profits,
management  believes  that  there  is  sufficient   uncertainty   regarding  the
realization  of deferred  assets such that a full  valuation  allowance has been
provided.

At March 31, 2002, the Company had available federal and state tax net operating
loss  carryforwards  of  approximately  $36,800  and $9,400,  respectively.  The
federal and state tax net operating loss carryforwards  expire from 2002 to 2021
and 2002 to 2011,  respectively.  The Company has federal and state research and
development credit  carryforwards of approximately $727 and $513,  respectively,
expiring from 2007 through 2018. These credits may be available to offset future
taxes.

A  reconciliation  between  the  provision  for  income  taxes  computed  at the
statutory rate and the effective rate reflected in the Consolidated Statement of
Operations is as follows:

Years ended March 31,                                        2002          2001
                                                             ----          ----
Provision (benefit) at U.S. statutory rate                  $(575)        $(840)
Tax losses not currently benefited                            554           275
Change in valuation allowance                                               580
                                                            -----         -----
         Tax provision                                     $ (21)        $   15
                                                            =====         =====

NOTE 12  SUPPLEMENTAL CASH FLOW INFORMATION

Years ended March 31,                                        2002          2001
                                                             ----          ----
Cash paid during the period for:
Interest                                                   $   --        $   --
Income taxes                                               $   --        $   --

Noncash investing and financing activities:
         Common stock issued in exchange for
            note payable                                   $   13        $   74


                                       33
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

NOTE 13  BUSINESS SEGMENTS

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
131 ("FAS  131"),  "Disclosures  About  Segments  of an  Enterprise  and Related
Information." This statement  establishes standards for the way companies report
information  about operating  segments in annual financial  statements.  It also
establishes  standards  for related  disclosures  about  products and  services,
geographic areas and major customers. The disclosures prescribed by FAS 131 were
effective  for the  Company's  consolidated  financial  statements  for the year
ending March 31, 2000.

The Company has provided segment  information based on geographic  regions.  All
segments  derive the  majority of their  revenues  from  software  licenses  and
services.  Transactions  between segments are accounted for on the same basis as
those with outside parties,  except that they are eliminated when presented on a
consolidated basis.

The following table summarizes the United States operations of the Company:

<TABLE>
<CAPTION>
                                          United States       Adjustments
                                                  Quality          and
                                         SVR     I.C. Corp    Eliminations   Consolidated
                                         ---     ---------    ------------   ------------
<S>                                   <C>        <C>           <C>             <C>
Year ended March 31, 2001

Sales to unaffiliated customers       $     249  $     933      $     --       $  1,182
Transfer between geographic
 regions                                     --         --            --             --
                                      ---------  ---------      --------        -------
Total sales                           $     249  $     933      $     --       $  1,182
                                      =========  =========      ========       ========

Operating income (loss)               $  (2,100) $      15      $     --       $ (2,085)
                                      =========  =========      ========       ========

Identifiable assets                   $   1,169  $     181      $     --       $  1,350
                                      =========  =========      ========       ========

Year ended March 31, 2002

Sales to unaffiliated customers       $     758  $     306      $     --       $  1,064
Transfer between geographic
 regions                                     --         --            --
                                      ---------  ---------      --------        -------
Total sales                           $     758  $     306      $     --       $  1,064
                                      =========  =========      ========       ========

Operating income (loss)               $  (1,500) $    (32)      $     --       $ (1,532)
                                      =========  =========      ========       ========

Identifiable assets                   $     241  $      35      $     --       $    276
                                      ========   =========      ========       ========
</TABLE>

Included in total United States  revenue are export sales of $38 and $0 for 2001
and 2002, respectively,  principally to the Far East. Total consolidated revenue
outside of the United States was $38 and $0 in 2001 and 2002, respectively.

                                       34
<PAGE>

                          SILICON VALLEY RESEARCH, INC.
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     (in thousands, except share price data)

A  small  number  of  customers  account  for a  significant  percentage  of the
Company's total revenue as follows:

                        Year ended March 31,
                        -------------------

            Customer             2002                2001
            --------             ----                ----

             A                    33%                 24%
             B                    15%                 *%
             C                    *%                  18%
             D                    *%*                 18%
             E                    *%                  14%
             F                    *%                  11%

         * less than 10% of consolidated revenue

NOTE 14  RELATED PARTY TRANSACTIONS

On March  26,  2001,  we issued a  Warrant  Reduction  Offer  (the  "Offer")  to
investors who held warrants to purchase shares of our Common Stock  ("Warrants")
at an exercise price of $0.53 per share (the "$0.53 Warrants"). Under the Offer,
such  investors  were able to exercise the $0.53  Warrants at a reduced price of
either  $0.13 per share or $0.115  per share.  Investors  who  exercised  at the
$0.115 price were  prohibited from selling the shares acquired from the exercise
for 60 days  commencing  from the exercise date.  Investors who exercised at the
$0.13 price had no restrictions on the sale of the underlying  shares. The Offer
expired on Friday,  April 6, 2001.  During the first  quarter of fiscal 2002, 45
Warrants were exercised at $0.115 per share raising $5.

On July 31, 2001, we issued a Warrant Reduction Offer (the "Offer") to investors
who held  warrants to purchase  shares of our Common  Stock  ("Warrants")  at an
exercise price of $0.37 per share (the "$0.37 Warrants").  Under the Offer, such
investors  were able to exercise the $0.37 Warrants at a reduced price of $0.055
per share. The Offer expired on August 6, 2001. During fiscal 2002, 270 Warrants
were exercised at $0.055 per share raising $15.

In June 2001, we began a private  placement of equity  securities.  We completed
the private  placement of 1,471  shares of Common  Stock on July 13, 2001,  with
total proceeds to us of $125. One of the investors was a 5% shareholder, officer
or director at the time of the offering and  participated  in the  offering,  as
follows:

                  David  G.  Arscott,  a  director  and 5%  shareholder  of SVR,
                  purchased 176 shares through Compass Chicago  Partners,  LP at
                  $.085 per share for a total purchase price of $15. Mr. Arscott
                  also purchased 176 shares through Compass Technology Partners,
                  LP at $.085 per share for a total  purchase  price of $15. Mr.
                  Arscott also  purchased 59 shares through  Compass  Management
                  Partners,  LP at $.085 per share for a total purchase price of
                  $5.  Mr.  Arscott is a General  Partner of Compass  Technology
                  Partners, LP and Compass Chicago Partners LP.

In October 2001, we began a private placement of equity securities. We completed
the private  placement of 878 shares of Common  Stock on October 19, 2001,  with
total proceeds to us of $49.

                                       35
<PAGE>

Item  8.  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

On June 10, 2002,  Moss Adams LLP  resigned as the  independent  accountants  of
Silicon  Valley  Research,  Inc. as described in a Form 8-K which was filed with
the Securities and Exchange Commission on June 14, 2002.

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
Section 16(a) of the Exchange Act

The following sets forth certain  information  regarding the executive  officers
and directors of the Registrant:

Executive  officers  serve at the  discretion  of the Board of  Directors of the
Registrant.

James O. Benouis (age 34) became  President and Chief  Operating  Officer of the
Company in March 1998 and was appointed Chief Executive  Officer in August 1998.
Mr.  Benouis came to us from Quality I.C.  Corporation  ("QIC"),  an  integrated
circuit design services company based in Austin, Texas, which was acquired by us
in March 1998, where he was President from 1995 to 1998. While at QIC, his roles
included project  leadership for all IC design projects,  software  enhancements
and  daily  business  operation  management.  He  holds a degree  in  Electrical
Engineering from the University of Texas.

David  G.  Arscott  (age  57) is  General  Partner  and  Co-Founder  of  Compass
Technology Partners which invests in public and private technology companies. He
began his career with Citicorp  Venture  Capital  Limited and in 1973 opened its
West Coast office. In 1978, Mr. Arscott  co-founded  Arscott Norton & Associates
which formed three venture  capital funds. He is a director and past Chairman of
Lam  Research  Corporation  and a  director  of  Cyberstate  University.  He has
formerly served as President and Director of the Western  Association of Venture
Capitalists.  Mr.  Arscott  earned his B.A.  degree  from the College of Wooster
(1966) and his MBA from the University of Michigan.

Kemal Ian  Benouis  (age 37) joined us as Director  of Sales and  Marketing  and
General  Counsel in February  2001 and became a member of our Board of Directors
in March 2001. On June 1, 2002,  Mr.  Benouis became Vice President of Sales and
Marketing.  Mr. Benouis has over six years of sales experience holding positions
including  National  Sales  Manager for  eLaw.com  and  Corporate  Market  Sales
Representative and Information Technology Consultant for West Group, the largest
legal publisher in the United States.  Prior to that, Mr. Benouis was a District
Hospital  Representative for Pfizer,  Inc. As an Officer in the US Army, he held
positions such as Company Executive Officer,  Battalion Intelligence Officer and
UH-60 Blackhawk  Helicopter  Pilot and participated in Operation Just Cause. Mr.
Benouis  holds a  Bachelor  of  Science in  Engineering  Management  from the US
Military  Academy,  West  Point.  He also  received a Juris  Doctorate  from the
University  of  Houston  Law Center  ("UHLC")  in May 1997.  While at UHLC,  Mr.
Benouis  won the  1997  State  Bar of  Texas  Computer  Section  Annual  Writing
Competition and was a member of the Intellectual Property Law Review.

Section 16(a) of the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"),  requires our directors and executive officers,  and persons who own more
than ten percent of a registered  class of our equity  securities,  to file with
the SEC initial  reports of  ownership  and reports of changes in  ownership  of
Common Stock and other equity securities of the Company. Officers, directors and
greater than ten percent  beneficial  owners are required by SEC  regulations to
furnish us with copies of all reports they file under Section 16(a).

To our  knowledge,  based  solely on our  review of the  copies of such  reports
furnished to us and written  representation that no other reports were required,
all Section 16(a) filing requirements applicable to our officers,  directors and
greater than ten-percent  beneficial owners were complied with during the fiscal
year ended March 31, 2002.

                                       36
<PAGE>

Item 10.  Executive Compensation

The following table sets forth  information  concerning the compensation paid to
the persons who served as our Chief Executive Officer during fiscal 2002 and our
three most highly  compensated  executive officers who were serving as executive
officers at the end of fiscal 2002 whose salary and bonus for fiscal 2002 was at
least $100,000 for all services in all capacities to us during fiscal 2002, 2001
and 2000.

                           Summary Compensation Table
<TABLE>
<CAPTION>

                                                          Annual                               Long-Term
                                                        Compensation                          Compensation
                                                        ------------                          ------------
                                                                     Other Annual                     All Other
Name and                            Fiscal     Salary       Bonus    Compensation       Options      Compensation
Principal Position                   Year       ($)          ($)       ($)   (1)          (#) ($)        (2)
------------------                  ------     ------      -------    ----------        -------      -----------
<S>                                   <C>       <C>            <C>         <C>          <C>              <C>
James O. Benouis                      2002      73,953         0           --           1,000,000        11,300
     President and                    2001     175,000         0           --                   0         7,800
     Chief Executive Officer          2000     182,292         0           --           1,500,000         8,125
</TABLE>

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

(1)  Such Other Annual  Compensation did not exceed the lesser of (i) $50,000 or
     (ii) 10% of such executive officer's salary and bonus combined.

(2)  All Other  Compensation  paid to the executive officer is comprised of auto
     allowances  of $4,225 and  compensation  for the  exercise of  nonqualified
     stock options of $7,075.

                          Option Grants in Fiscal 2002

                                        Percent of
                        Options        Total Options
                        Granted          Granted to    Exercise
                        (shares)        Employees in     Price       Expiration
                          (#)            Fiscal 2002   ($/Sh)(1)        Date
                       ---------         -----------   ---------     -----------

James O. Benouis     1,000,000 (2)          49%          0.054        11/18/11

(1)  All options  have an exercise  price equal to the fair market  value of the
     Company's Common Stock on the date of grant.

(2)  Incentive  Stock Option granted under the Company's 1988 Stock Option Plan.
     Options become  exercisable as the  underlying  shares vest.  20,830 shares
     vest  monthly  for 48  months  commencing  one  month  from  date of grant,
     11/19/01. See also the Change-in-Control Arrangements as described below.

                                       37
<PAGE>

                        Fiscal Year End Option Values (1)

                        Number of Securities        Value of Unexercised In-the-
                      Underlying Unexercised              Money Options at
                   Options at Fiscal Year End(#)      Fiscal Year End ($)(2)
                   -----------------------------      ----------------------
Name                Exercisable   Unexercisable    Exercisable    Unexercisable
---                 -----------   -------------    -----------    -------------

James O. Benouis     306,618      1,580,420           307           1,580

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

(1)  During fiscal 2002,  options were  exercised to purchase  962,962 shares of
     our  Common  Stock at $.054 per share by the  person  named in the  Summary
     Compensation Table.

(2)  Based on the  difference  between  the  exercise  price and the fair market
     value of the  options  on March  30,  2002.  The fair  market  value is the
     closing price of a share of our common stock, which was $0.055.

Directors  received no fee for serving as directors in fiscal 2002.  Each of our
non-employee  directors  received  options under the Company's  1990  Directors'
Stock  Option  Plan  (the  "Directors'   Plan").   Under  the  Directors'  Plan,
non-employee  directors are granted an annual option to purchase 9,000 shares of
our Common Stock.  They are also granted an option to purchase  45,000 shares of
our  Common  Stock  upon  appointment  to the Board of  Directors.  The  options
typically vest over four years, with 25% vesting one year from date of grant and
the remaining vesting monthly at a rate of 1/48 thereafter.

Under our 1988 Stock Option Plan, in the event of a dissolution  or  liquidation
of the  Company,  a  merger  in which we are not the  surviving  corporation,  a
transaction  or  series  of  transactions  in  which  50% or  more  of the  then
outstanding voting stock is sold or otherwise transferred to a single transferee
or group of related transferees,  or the sale of all or substantially all of the
assets of the Company, any or all outstanding options may be assumed or replaced
by the successor  corporation,  which assumption or replacement shall be binding
on all optionees.  In the alternative,  the successor corporation may substitute
equivalent options or provide  substantially  similar consideration to optionees
as was  provided  to  shareholders  (after  taking  into  account  the  existing
provisions of the options).  The successor  corporation may also issue, in place
of outstanding shares of the Company held by the optionee, substantially similar
shares or other property subject to repurchase restrictions no less favorable to
the optionee.

Under our Directors'  Plan, in the event of a Transfer of Control (as defined in
the Directors'  Plan) of the Company,  any  unexercisable or unvested portion of
outstanding options will be immediately exercisable and vested in full as of the
date 10 days prior to the date of the  Transfer of  Control.  In  addition,  the
Board of Directors of the Company,  in its sole discretion,  may arrange for the
acquiring  corporation  to either  assume the Company's  rights and  obligations
under outstanding options or substitute substantially equivalent options for the
acquiring  corporation's  stock for outstanding  options.  Any options which are
neither  assumed or substituted by the acquiring  corporation in connection with
the Transfer of Control nor  exercised as of the date of the Transfer of Control
will  terminate  and cease to be  outstanding  as of the date of the Transfer of
Control.

                                       38
<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management

The following  table sets forth certain  information  as of June 28, 2002,  with
respect to the beneficial ownership of our Common Stock by (i) all persons known
by us to be the  beneficial  owners  of more than 5% of the  outstanding  Common
Stock of SVR, (ii) each director of SVR,  (iii) the persons named in the Summary
Compensation Table below and (iv) all executive officers and directors of SVR as
a group.

<TABLE>
<CAPTION>
Name and Address of Beneficial                         Amount and Nature of              Percent
   Owner or Identity of Group                         Beneficial Ownership(1)          of Class(2)
--------------------------------                      -----------------------          -----------
<S>                 <C>                                       <C>                          <C>
J.F. Shea Co., Inc. (3),..............................        7,380,115                    16.5
       655 Brea Canyon Road
       Walnut, CA  91789

James O. Benouis (4),.................................        2,966,918                     6.6
       3001 Bee Caves Road, Suite 220
       Austin, TX  78746

David G. Arscott (5),.................................        3,014,716                     6.7
       1550 El Camino Real, Suite 275
       Menlo Park, CA  94025


Kemal Ian Benouis (6),................................           56,248                     0.1
       3001 Bee Caves Road, Suite 220
       Austin, TX  78746

All executive officers and directors as a group (7)
(3 persons) ..........................................        6,037,882                    13.3
</TABLE>
----------
  *  Less than 1%

(1)  Unless otherwise  indicated below, each person or entity named in the table
     has sole voting and sole investment  power with respect to all shares shown
     as beneficially owned, subject to community property laws where applicable.

(2)  Percentage  of  ownership  is based on  44,683,257  shares of Common  Stock
     outstanding on June 28, 2002.

(3)  Includes 7,380,115 shares held directly by J.F. Shea Co., Inc. ("JFSCI").

(4)  Includes  596,201 shares subject to options  exercisable  within 60 days of
     June 28, 2002.

(5)  Includes  1,055,313 shares held by Compass Chicago Partners,  L.P., 160,480
     shares held by Compass Management Partners,  L.P. and 1,730,949 shares held
     by Compass  Technology  Partners,  L.P. Mr. Arscott is a General Partner of
     Compass Chicago  Partners,  L.P.,  Compass  Management  Partners,  L.P. and
     Compass  Technology   Partners,   L.P.  Mr.  Arscott  disclaims  beneficial
     ownership  of the  portion of the  shares and  warrants  that  exceeds  his
     proportionate  interest in the limited  partnerships.  Also includes 24,098
     shares and 43,875 shares subject to options  exercisable  within 60 days of
     June 29, 2002 held directly by Mr. Arscott.

(6)  Includes  56,248 shares  subject to options  exercisable  within 60 days of
     June 28, 2002.

(7)  Includes  696,324 shares subject to options  exercisable  within 60 days of
     June 28, 2002.

                                       39
<PAGE>

Item 12.  Certain Relationships and Related Transactions

On March  26,  2001,  we issued a  Warrant  Reduction  Offer  (the  "Offer")  to
investors who held warrants to purchase shares of our Common Stock  ("Warrants")
at an exercise price of $0.53 per share (the "$0.53 Warrants"). Under the Offer,
such  investors  were able to exercise the $0.53  Warrants at a reduced price of
either  $0.13 per share or $0.115  per share.  Investors  who  exercised  at the
$0.115 price were  prohibited from selling the shares acquired from the exercise
for 60 days  commencing  from the exercise date.  Investors who exercised at the
$0.13 price had no restrictions on the sale of the underlying  shares. The Offer
expired on  Friday,  April 6, 2001.  During  the first  quarter of fiscal  2002,
45,000 Warrants were exercised at $0.115 per share raising $5,175.

On July 31, 2001, we issued a Warrant Reduction Offer (the "Offer") to investors
who held  warrants to purchase  shares of our Common  Stock  ("Warrants")  at an
exercise price of $0.37 per share (the "$0.37 Warrants").  Under the Offer, such
investors  were able to exercise the $0.37 Warrants at a reduced price of $0.055
per share.  The Offer  expired on August 6, 2001.  During  fiscal 2002,  270,000
Warrants were exercised at $0.055 per share raising $14,850.

In June 2001, we began a private  placement of equity  securities.  We completed
the private placement of 1,470,590 shares of Common Stock on July 13, 2001, with
total  proceeds to us of $125,000.  One of the investors  was a 5%  shareholder,
officer  or  director  at the  time  of the  offering  and  participated  in the
offering, as follows:

                  David  G.  Arscott,  a  director  and 5%  shareholder  of SVR,
                  purchased 176,471 shares through Compass Chicago Partners,  LP
                  at $.085 per share for a total purchase price of $15,000.  Mr.
                  Arscott  also  purchased   176,471   shares  through   Compass
                  Technology  Partners,  LP at  $.085  per  share  for  a  total
                  purchase price of $15,000.  Mr. Arscott also purchased  58,824
                  shares through Compass  Management  Partners,  LP at $.085 per
                  share for a total purchase  price of $5,000.  Mr. Arscott is a
                  General Partner of Compass Technology Partners, LP and Compass
                  Chicago Partners LP.

In October 2001, we began a private placement of equity securities. We completed
the private  placement  of 878,006  shares of Common  Stock on October 19, 2001,
with total proceeds to us of $49,168.

                                       40
<PAGE>
                                     PART IV

Item 13. Exhibits and Reports on Form 8-K

(A) EXHIBITS

(a)(1)      The financial  statements filed as part of this Report at Item 7 are
            listed in the Index to Financial  Statements and Financial Statement
            Schedules on page 17 of this Report.

(a)(2)      The  financial  statement  schedule  filed as part of this Report at
            Item 7 is listed in the Index to Financial  Statements and Financial
            Statement Schedules on page 17 of this Report.

(a)(3)      The  following  exhibits  are filed with this Annual  Report on Form
            10-KSB:

Exhibit
Number      Description of Exhibit
------      ----------------------

3.01        Registrant's   Articles   of   Incorporation   as  amended  to  date
            (incorporated   by  reference   to  Exhibit  3.01  of   Registrant's
            Registration  Statement on Form S-1 ( File No.  2-89943) filed March
            14, 1984, as amended (the "1984 Registration Statement")).

3.02        Registrant's   amendment  to  Amended  and   Restated   Articles  of
            Incorporation  filed October 16, 1998  (incorporated by reference to
            Exhibit 3.02 of Registrant's  Quarterly  Report on Form 10-Q for the
            quarter ended September 30, 1998).

3.03        Registrant's  bylaws, as amended to date  (incorporated by reference
            to Exhibit 4.01 of the 1984 Registration Statement).

3.05        Amendment  to  Bylaws  dated  November  12,  1996  (incorporated  by
            reference to Exhibit 3.04 of Registrant's  Quarterly  Report on Form
            10-Q for the quarter ended December 31, 1996).

10.01       Form of Stock  Purchase  Agreement  among the  Company  and  several
            investors  dated as of June 27, 2001  (incorporated  by reference to
            Exhibit 10.01 of the  Registrant's  Quarterly  Report on Form 10-QSB
            for the quarter ended June 30, 2001).

10.02       Form of Stock Purchase  Agreement  among the Company and an investor
            dated as of October 1, 2001  (incorporated  by  reference to Exhibit
            10.02 of the  Registrant's  Quarterly  Report on Form 10-QSB for the
            quarter ended December 31, 2001).

21.01       Subsidiary of the Registrant

27.00       Financial Data Schedule


(B) REPORTS ON FORM 8-K

No Reports on Form 8-K were filed during the fourth quarter of 2002.

                                       41
<PAGE>
                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                  SILICON VALLEY RESEARCH, INC.
                                  (Registrant)
                                  Officer
Date:     July 15, 2002           By:  /s/ James O. Benouis
         --------------                -----------------------------------------
                                  James O. Benouis, President, Chief Executive
                                  Officer and Chief Accounting Officer


                                POWER OF ATTORNEY

Each of the  officers and  directors  of Silicon  Valley  Research,  Inc.  whose
signature appears below hereby constitutes and appoints James O. Benouis,  their
true and lawful attorneys and agents, with full power of substitution, each with
power to act  alone,  to sign and  execute  on  behalf  of the  undersigned  any
amendment or  amendments  to the annual report on Form 10-KSB and to perform any
acts  necessary in order to file such  amendments,  and each of the  undersigned
does hereby  ratify and confirm all that said  attorneys  and agents or their or
his substitutes, shall do or cause to be done by virtue hereof.

In  accordance  with the  Exchange  Act,  this  report  has been  signed  by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.

NAME/TITLE                                                         DATE


         /s/ James O. Benouis                                  July 15, 2002
-----------------------------------------------------      --------------------
James O. Benouis, President, Chief Executive
Officer and Director (Principal Executive and
Financial Officer)


         /s/  David G. Arscott                                 July 15, 2002
-----------------------------------------------------      --------------------
David G. Arscott, Director


         /s/ Kemal Ian Benouis                                 July 15, 2002
-----------------------------------------------------      --------------------
Kemal Ian Benouis, Vice President of Sales and
Marketing and Director

                                       42