<PAGE>
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2003     Commission File Number 0-13071


                             INTERPHASE CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)

                      TEXAS                             75-1549797
           (State of Incorporation)          (IRS Employer Identification No.)

                                PARKWAY CENTRE I
                      2901 NORTH DALLAS PARKWAY, SUITE 200
                               PLANO, TEXAS 75093
                    (Address of Principal Executive Offices)

                                 (214)-654-5000
              (Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for a much 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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

--------------------------------------------------------------------------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                  Class                               Outstanding at May 8, 2003
                  -----                               --------------------------
         Common Stock, $.10 par value                          5,514,276

================================================================================


<PAGE>


                             INTERPHASE CORPORATION

                                      INDEX

<Table>
<S>                                                                                              <C>
PART I -FINANCIAL INFORMATION

         Item 1.           Consolidated Interim Financial Statements

                           Consolidated Balance Sheets as of March 31, 2003 (unaudited)
                           and December 31, 2002                                                    3

                           Consolidated Statements of Operations for the three months
                           ended March 31, 2003 and 2002 (unaudited)                                4

                           Consolidated Statements of Cash Flows for the three months
                           ended March 31, 2003 and 2002 (unaudited)                                5

                           Notes to Consolidated Interim Financial Statements                    6-10

         Item 2.           Management's Discussion and Analysis of
                           Financial Condition and Results of Operations                        11-14

         Item 3.           Quantitative and Qualitative Disclosures About Market Risk              15

         Item 4.           Controls and Procedures                                                 15

PART II - OTHER INFORMATION

         Item 1.           Legal Proceedings                                                       16

         Item 2.           Changes in Securities and Use of Proceeds                               16

         Item 3.           Defaults Upon Senior Securities                                         16

         Item 4.           Submission of Matters to a Vote of Security Holders                     16

         Item 5.           Other Information                                                       16

         Item 6.           Exhibits and Report on Form 8-K                                         16

                           Signature                                                               17

                           Certifications Pursuant to Rule 13a-14(b)                            18-19
</Table>



                                       2
<PAGE>
INTERPHASE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of share data)

<Table>
<Caption>
                                                                 (unaudited)
                                                                   Mar. 31,          Dec. 31,
ASSETS                                                               2003              2002
                                                                 ------------      ------------

<S>                                                              <C>               <C>
Cash and cash equivalents                                        $      8,152      $      9,857
Marketable securities                                                   5,529             5,518
Restricted cash                                                         3,500             3,500
Trade accounts receivable, less allowances for uncollectible
     accounts and returns of $233 and $230, respectively                5,751             5,683
Inventories                                                             3,226             3,121
Prepaid expenses and other current assets                                 837               674
Income taxes receivable                                                   259               247
                                                                 ------------      ------------
     Total current assets                                              27,254            28,600

Machinery and equipment                                                 5,887             5,731
Leasehold improvements                                                    384               380
Furniture and fixtures                                                    553               549
                                                                 ------------      ------------
                                                                        6,824             6,660
Less-accumulated depreciation and amortization                         (5,132)           (4,921)
                                                                 ------------      ------------
     Total property and equipment, net                                  1,692             1,739

Capitalized software, net                                                 440               199
Other assets                                                              217               211
                                                                 ------------      ------------
     Total assets                                                $     29,603      $     30,749
                                                                 ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY

     LIABILITIES

Accounts payable                                                 $      1,483      $      1,437
Deferred revenue                                                          234               595
Accrued liabilities                                                     1,366             1,291
Accrued compensation                                                      927             1,023
                                                                 ------------      ------------
     Total current liabilities                                          4,010             4,346

Deferred lease obligations                                                121                85
Long term debt                                                          3,500             3,500
                                                                 ------------      ------------
     Total liabilities                                                  7,631             7,931

     SHAREHOLDERS' EQUITY

Common stock, $.10 par value; 100,000,000 shares
    authorized; 5,514,276 and 5,514,276 shares issued and
    outstanding, respectively                                             551               551
Additional paid in capital                                             37,304            37,304
Retained deficit                                                      (15,621)          (14,795)
Cumulative other comprehensive loss                                      (262)             (242)
                                                                 ------------      ------------
     Total shareholders' equity                                        21,972            22,818
                                                                 ------------      ------------
     Total liabilities and shareholders' equity                  $     29,603      $     30,749
                                                                 ============      ============
</Table>


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



                                       3
<PAGE>


INTERPHASE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)

<Table>
<Caption>

                                                   Three Months Ended Mar. 31,
                                                --------------------------------
                                                      2003               2002
                                                -------------      -------------
<S>                                             <C>                <C>
Revenues                                        $       7,513      $       6,300
Cost of sales                                           3,722              3,808
                                                -------------      -------------
Gross margin                                            3,791              2,492
                                                -------------      -------------
Research and development                                1,959              1,649
Sales and marketing                                     1,800              1,371
General and administrative                                888                754
                                                -------------      -------------
  Total operating expenses                              4,647              3,774
                                                -------------      -------------
Operating loss                                           (856)            (1,282)
Interest income, net                                       70                193
Other income, net                                          17                 56
                                                -------------      -------------
Loss before income taxes                                 (769)            (1,033)
Income tax provision (benefit)                             57               (467)
                                                -------------      -------------
 Net loss                                       $        (826)     $        (566)
                                                =============      =============
Net loss per share
       Basic                                    $       (0.15)     $       (0.10)
                                                -------------      -------------
       Diluted                                  $       (0.15)     $       (0.10)
                                                -------------      -------------
Weighted average common shares                          5,514              5,607
                                                -------------      -------------
Weighted average common and dilutive shares             5,514              5,607
                                                -------------      -------------
</Table>



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






                                       4
<PAGE>
INTERPHASE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

<Table>
<Caption>

                                                                                                 Three Months ended Mar. 31,
                                                                                               ------------------------------
                                                                                                   2003              2002
                                                                                               ------------      ------------
<S>                                                                                            <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net loss                                                                                     $       (826)     $       (566)
  Adjustments to reconcile net loss to net cash provided by operating activities:
  Provision for uncollectible accounts and returns                                                       --               (62)
  Provision for excess and obsolete inventory                                                           200               293
  Depreciation and amortization                                                                         244               230
  Deferred income taxes                                                                                  --               528
   Change in assets and liabilities:
       Trade accounts receivable                                                                        (68)              495
       Inventories                                                                                     (305)              873
       Prepaid expenses and other current assets                                                       (161)               33
       Income taxes receivable                                                                          (12)           (1,054)
       Accounts payable, deferred revenue and accrued liabilities                                      (243)              (81)
       Accrued compensation                                                                            (114)              (41)
                                                                                               ------------      ------------
   Net adjustments                                                                                     (459)            1,214
                                                                                               ------------      ------------
       Net cash (used) provided by operating activities                                              (1,285)              648
CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment                                                                 (139)              (20)
   Additions to capitalized software                                                                   (293)              (10)
   Other assets                                                                                          (3)              (21)
   Proceeds from sale of marketable securities                                                          526               304
   Purchases of marketable securities                                                                  (556)             (385)
   Deferred lease obligations                                                                            36                --
                                                                                               ------------      ------------
       Net cash used by investing activities                                                           (429)             (132)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of redeemable common stock                                                                   --              (254)
   Purchase of common stock                                                                              --                (8)
                                                                                               ------------      ------------
       Net cash used by financing activities                                                             --              (262)
                                                                                               ------------      ------------
Effect of exchange rate changes on cash and cash equivalents                                              9               (63)
                                                                                               ------------      ------------
Net (decrease) increase in cash and cash equivalents                                                 (1,705)              191
Cash and cash equivalents at beginning of period                                                      9,857            10,415
                                                                                               ------------      ------------
Cash and cash equivalents at end of period                                                     $      8,152      $     10,606
                                                                                               ============      ============
</Table>

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




                                       5
<PAGE>
               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

Interphase Corporation and subsidiaries ("Interphase" or the "Company") enables
rapid platform design and integration for the global voice and data
communications markets through custom and off-the-shelf communications
equipment, embedded software development suites, and systems integration and
consulting services for telecom and enterprise networks. The Company's products
connect computer and telecommunication servers to Wide Area Networks (WANs),
Local Area Networks (LANs) and Storage Area Networks (SANs) using Asynchronous
Transfer Mode (ATM), Ethernet, Signaling System 7 (SS7), IP, Fibre Channel,
HDLC, Frame Relay and Integrated Services Digital Network (ISDN) technologies.
See Note 7 for information regarding the Company's revenues related to North
America and foreign countries.

The accompanying consolidated interim financial statements include the accounts
of Interphase Corporation and its wholly owned subsidiaries. Significant
intercompany accounts and transactions have been eliminated.

While the accompanying interim financial statements are unaudited, they have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of the Company, all material
adjustments and disclosures necessary to fairly present the results of such
periods have been made. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. These financial statements should be read in conjunction
with the consolidated financial statements and notes thereto for the year ended
December 31, 2002.

Certain prior period amounts within the Statements of Cash Flows have been
reclassified to conform with the current year presentation.

The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States of America, requires Company
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Areas involving estimates are the allowance for doubtful accounts and
returns, warranty and inventory reserves and deferred taxes.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," ("APB 25") and related
interpretations in accounting for its employee stock options. Under APB 25,
compensation expense is recorded when the exercise price of employee stock
options is less than the fair value of the underlying stock on the date of
grant. The Company has implemented the disclosure-



                                       6
<PAGE>

only provisions of Statement of Financial Accounting Standards Board No. ("FAS")
123, "Accounting for Stock-Based Compensation," and FAS 148, "Accounting for
Stock-Based Compensation Transition and Disclosure." Had the Company elected to
adopt the expense recognition provisions of FAS 123, the pro forma impact on net
income and earnings per share would have been as follows:

<Table>
<Caption>

                                                             Three months ended March 31,
                                                                2003              2002
                                                            ------------      ------------
<S>                                                         <C>               <C>
Net loss
    As reported                                             $       (826)     $       (566)
    Less: Total stock-based employee
    compensation expense determined
    under fair value based methods for
    all awards, net of related tax effects                          (614)             (867)
                                                            ------------      ------------
    Pro forma                                               $     (1,440)     $     (1,433)
Loss per common share
    As reported                                             $      (0.15)     $      (0.10)
    Pro forma                                               $      (0.27)     $      (0.26)
</Table>

The Company utilizes the Black-Scholes option pricing model to calculate its pro
forma stock-based compensation expense, and the assumptions used for each period
are as follows:

<Table>
<Caption>

                                                         Three months ended March 31,
                                                           2003                 2002
                                                       ------------         ------------
<S>                                                    <C>                  <C>
Weighted average risk free interest rate                       3.52%                5.00%
Volatility                                                      160%                 160%
Expected dividend yield                                           0%                   0%
Weighted average grant-date fair value per
share of options granted                               $       3.63         $       4.77
Expected term                                                  7.31 years           7.06 years
</Table>

2.       INVENTORIES

Inventories are valued at the lower of cost or market and include material,
labor and manufacturing overhead. Cost is determined on a first-in, first-out
basis (in thousands):

<Table>
<Caption>
                           Mar. 31, 2003      Dec. 31, 2002
                           --------------     --------------
<S>                        <C>                <C>
Raw materials              $        2,254     $        2,325
Work-in-process                       743                670
Finished goods                        229                126
                           --------------     --------------
Total                      $        3,226     $        3,121
                           ==============     ==============
</Table>

Valuing inventory at the lower of cost or market involves an inherent level of
risk and uncertainty due to technology trends in the industry and customer
demand for the Company's products. Future events may cause significant
fluctuations in the Company's operating results.



                                       7
<PAGE>

3.       DEFERRED TAXES

Statement of Financial Accounting Standards ("SFAS") No.109, "Accounting for
Income Taxes" ("SFAS 109") requires that a valuation allowance be established
when it is "more likely than not" that all or a portion of a deferred tax asset
will not be realized. A review of all available positive and negative evidence
needs to be considered, including a company's current and past performance, the
market environment in which the company operates, the utilization of past tax
credits, length of carry back and carry forward periods, existing contracts or
sales backlog that will result in future profits, as well as other factors.

Forming a conclusion that a valuation allowance is not needed is difficult when
there is negative evidence such as cumulative losses in recent years. Cumulative
losses weigh heavily in the overall assessment. As a result of a review
undertaken at December 31, 2002, the Company concluded that it was appropriate
to establish a full valuation allowance for its net deferred tax assets. During
the first quarter 2003 the Company continued to maintain a full valuation
allowance on the tax benefits. The Company expects to continue to record a full
valuation allowance on future tax benefits until an appropriate level of
profitability is sustained. Until an appropriate level of profitability is
reached, the Company does not expect to recognize any significant tax benefits
in future results of operations.

4.       CREDIT FACILITY

The Company has a $5 million revolving bank credit facility. The revolving
credit facility matures on June 30, 2004 and is secured throughout the term of
the credit facility by a ninety-day certificate of deposit issued by the bank in
the principal amount equal to the stated principal amount of the promissory
note. The certificate of deposit is reflected as restricted cash on the
accompanying balance sheet. The credit facility bears interest at the rate of
approximately 1% per annum above the certificate of deposit rate, which was 1%
at March 31, 2003, and includes certain restrictive covenants including, among
others, a tangible net worth restriction. As of March 31, 2003, the Company was
in compliance with all restrictive covenants included in the revolving credit
facility. At March 31, 2003, the Company had borrowings of $3.5 million
classified as long-term debt on the balance sheet and the remaining availability
under the revolving credit facility was $1.5 million.



                                       8
<PAGE>
5.       COMPREHENSIVE INCOME

The following table shows the Company's comprehensive income (in thousands):

<Table>
<Caption>
                                                             Three months ended March 31,
                                                                2003              2002
                                                            ------------      ------------
<S>                                                         <C>               <C>
Net loss                                                    $       (826)     $       (566)
Other comprehensive income:
         Unrealized holding gain arising during
         period, net of tax                                           18                65
         Foreign currency translation adjustment                     (38)             (181)
Comprehensive loss                                          $       (846)     $       (682)
                                                            ============      ============
</Table>

6.       NET INCOME PER COMMON AND COMMON DILUTIVE SHARE

Diluted earnings per share consist only of the dilutive impact of stock options,
using the treasury stock method. Due to the Company's net losses for the periods
presented, the effect of dilutive securities would have been antidilutive.
Options that would have otherwise been included in the calculation of diluted
earnings per common share were 1,629 and 51,906 stock options for the
three-month periods ended March 31, 2003 and 2002, respectively.

7.       SEGMENT INFORMATION

The Company is principally engaged in the design, development, and manufacturing
of high-performance connectivity products utilizing advanced technologies being
used in next generation telecommunication networks and enterprise data/storage
networks. Except for revenue performance, which is monitored by product line,
the chief operating decision-makers review financial information presented on a
consolidated basis, for purposes of making operating decisions and assessing
financial performance. Accordingly, the Company considers itself to be in a
single industry segment.

Geographic revenue related to North America and foreign countries for the
three-months ended March 31, 2003 and 2002 are as follows (in thousands):

<Table>
<Caption>
                            Three months ended March 31,
Revenues                       2003             2002
--------                   ------------     ------------
<S>                        <C>              <C>

North America              $      5,076     $      4,048
Europe                              988            1,440
Pacific Rim                       1,449              812
                           ------------     ------------
Total                      $      7,513     $      6,300
                           ============     ============
</Table>



                                       9
<PAGE>
Additional information regarding revenue by product-line is as follows (in
thousands):

<Table>
<Caption>
                               Three months ended March 31,
Product Revenue                   2003             2002
---------------               ------------     ------------
<S>                           <C>              <C>

Broadband telecom             $      3,419     $      2,159
Combo                                2,836            2,628
LAN                                    232              796
Storage                                360              438
WAN                                     44               88
Other                                  622              191
                              ------------     ------------
Total                         $      7,513     $      6,300
                              ============     ============
</Table>

8.        RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On November 25, 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34." FIN
45 clarifies the requirements of FASB Statement No. 5, "Accounting for
Contingencies" relating to the guarantor's accounting for, and disclosure of,
the issuance of certain types of guarantees. For guarantees that fall within the
scope of FIN 45, the Interpretation requires that guarantors recognize a
liability equal to the fair value of the guarantee upon its issuance. The
Interpretation's provisions for initial recognition and measurement should be
applied on a prospective basis to guarantees issued or modified after December
31, 2002, irrespective of the guarantor's fiscal year-end. The guarantor's
previous accounting for guarantees that were issued before the date of FIN 45's
initial application may not be revised or restated to reflect the effect of the
recognition and measurement provisions of the Interpretation. The disclosure
requirements were effective for financial statements of both interim and annual
periods that end after December 15, 2002.

EITF Issue 00-21, "Accounting for Revenue Arrangements with Multiple
Deliverables," addresses the accounting treatment for an arrangement to provide
the delivery or performance of multiple products and/or services where the
delivery of a product or system or performance of services may occur at
different points in time or over different periods of time. The arrangements are
often accompanied by initial installation, initiation, or activation services
and involve either a fixed fee or a fixed fee coupled with a continuing payment
stream, which may be fixed or variable. The EITF reached conclusions regarding,
among other issues, the applicability of the provisions regarding separation of
contract elements in EITF Issue 00-21 to contracts where one or more elements
fall within the scope of other authoritative literature, such as SOP 81-1. The
proposed EITF does not impact the use of SOP 81-1 for contracts that fall within
the scope of SOP 81-1, such as for implementation or building of an information
technology system or product to client specifications for a client under a
long-term contract. Where an implementation or development project is contracted
with a client, and the vendor will also provide services or operate the system
over a period of time, EITF Issue 00-21 provides the methodology for separating
the contract elements and earnings processes. The provisions of EITF Issue 00-21
are applicable on a prospective basis to transactions entered into in fiscal
years beginning after June 15, 2003. The Company does not believe that EITF
Issue 00-21 will have a material impact on its consolidated financial
statements.



                                       10
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

This report contains forward-looking statements about the business, financial
condition and prospects of the Company. These statements are made under the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. The actual results of the Company could differ materially from those
indicated by the forward-looking statements because of various risks and
uncertainties, including without limitation, the Company's reliance on a limited
number of customers, failure to see spending improvements in the
telecommunications and computer networking industries, significant changes in
product demand, the availability of products, changes in competition, various
inventory risks due to changes in market conditions and other risks and
uncertainties indicated in the Company's filings and reports with the Securities
and Exchange Commission. All the foregoing risks and uncertainties are beyond
the ability of the Company to control, and in many cases, the Company cannot
predict the risks and uncertainties that could cause its actual results to
differ materially from those indicated by the forward-looking statements. When
used in this report, the words "believes," "plans," "expects," "intends," and
"anticipates" and similar expressions as they relate to the Company or its
management are intended to identify forward-looking statements.

RESULTS OF OPERATIONS

REVENUES: Total revenues for the three months ended March 31, 2003 were $7.5
million. Revenues for the same period in 2002 ("comparative period") were $6.3
million. Telecom product revenues increased to $3.4 million for the three months
ended March 31, 2003, from $2.2 million in the comparative period. Telecom
product revenues continue to grow steadily as some of the Company's design wins
move into production levels. We expect to see this growth trend continue
throughout the year, however, the telecommunications equipment market continues
to struggle through a prolonged contraction and customer forecasts have
continued to be unpredictable and therefore unreliable or inconsistent. Combo
product revenues increased slightly to $2.8 million for the three months ended
March 31, 2003 compared to $2.6 million in the comparative period. In addition,
the Company recognized approximately $500,000 in professional services revenues
during the three months ended March 31, 2003 from the Company's first
significant software customization contract while there were no such revenues
during the comparative period. We expect to see these revenues, though likely
less significant, from time to time and not on a consistent basis. These
combined increases were partially offset by the continued and anticipated
decline in revenues from the Company's legacy and storage product lines. Legacy
and storage product revenues decreased from $1.3 million in the comparative
period to $0.6 million for the three months ended March 31, 2003.

Three customers individually accounted for 35%, 29% and 13% of the Company's
first quarter 2003 revenue. In the comparative period, one customer individually
accounted for 43% of the Company's revenue.

GROSS MARGIN: Gross margin as a percentage of sales was 50% for the first
quarter 2003 and 40% for the comparative period. The increase in the gross
margin percentage primarily relates to a shift in product mix wherein a greater
percentage of sales were



                                       11
<PAGE>

derived from high margin telecommunication controllers and services revenues. In
addition, the Company improved manufacturing efficiencies and achieved
reductions in material costs of certain product lines due to increased
production volumes and lower overall overhead costs.

RESEARCH AND DEVELOPMENT: The Company's investment in the development of new
products through research and development was $2.0 million and $1.6 million for
the three months ended March 31, 2003 and 2002, respectively. As a percentage of
revenue, research and development expenses were 26% in both the first quarter
2003 and the comparative period. Approximately 48% of the increase in research
and development expenses for the three months ended March 31, 2003, related to a
foreign currency swing as the dollar dropped significantly (see Item 3 - Foreign
Currency Risk) in value relative to the Euro. The remainder of the difference
was primarily due to investment in a new telecommunications product.

SALES AND MARKETING: Sales and marketing expenses were $1.8 million in the first
quarter of 2003 and $1.4 million in the comparative period. As a percentage of
revenue, sales and marketing expenses were 24% in the first quarter 2003 and 22%
in the comparative period. Approximately 81% of the increase in sales and
marketing for the three months ended March 31, 2003, is due to increased
spending on headcount, travel related and marketing communication activities
aimed at increasing our brand awareness, messaging and ability to generate and
close on sales leads. The remainder of the increase is related to an unfavorable
foreign currency swing (see Item 3 - Foreign Currency Risk) and other
miscellaneous expenses within the sales and marketing organization.

GENERAL AND ADMINISTRATIVE: General and administrative expenses were $888,000 in
the first quarter 2003 and $754,000 in the comparative period. As a percentage
of revenue, general and administrative expenses were 12% in both the first
quarter 2003 and in the comparative period. The increase in general and
administrative expenses primarily resulted from uncontrollable increases in
business insurance premiums and other accounting related expenses. However,
general and administrative expenses remained flat as percentage of revenue.

INTEREST, NET: Interest income, net of interest expense, was $70,000 in the
first quarter 2003 and $193,000 in the comparative period. The decrease
primarily relates to lower daily cash levels and lower investment rates of
return.

OTHER INCOME, NET: Other income, net, was $17,000 in the first quarter 2003 and
$56,000 in the comparative period. Other income, net during these two periods
was primarily comprised of net gains on the sale of marketable securities and
the sale of miscellaneous obsolete parts.

INCOME TAXES: The Company's effective tax provision rate was 7% for the first
quarter 2003 and a benefit rate of 45% for the first quarter 2002.

The effective tax provision rate for the first quarter 2003 was significantly
more than the U.S. statutory rate due to a non-cash charge of $356,000 to
continue to provide a full valuation allowance for the net deferred tax assets
at March 31, 2003. The effective tax



                                       12
<PAGE>

benefit rate excluding this charge would have been 39%, which approximates the
U.S. statutory rate.

The effective tax benefit rate for the comparative period differed from the
statutory rate due to foreign income, which was offset by foreign loss carry
forwards. The foreign loss carry forwards expired at December 31, 2002.

NET LOSS: The Company reported a net loss of $826,000 in the first quarter 2003
and a net loss of $566,000 in the comparative period.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated Cash Flows

OPERATING ACTIVITIES: Trends in cash flows from operating activities for the
three months ended March 31, 2003 and 2002, are generally similar to the trends
in the Company's earnings except for provision for uncollectible accounts and
returns, provision for excess and obsolete inventory, depreciation and
amortization and deferred income taxes. Cash used by operating activities
totaled $1.3 million for the three months ended March 31, 2003, compared to a
net loss of $826,000. Cash provided by operating activities was $648,000 for the
three months ended March 31, 2002, compared to a net loss of $566,000. Provision
for uncollectible accounts and returns increased in the first quarter 2003 due
to a benefit recognized in the first quarter 2002 due to an improved aging and
decline in accounts receivable balance at quarter end. Provision for excess and
obsolete inventory has decreased as the Company is in the final stages of its
migration from legacy product lines. Management continues to expect lower
provision requirements for the remainder of 2003. Depreciation and amortization
increased slightly for the first quarter 2003 compared to the first quarter
2002. Deferred income taxes decreased for the first quarter 2003, due to a full
valuation allowance for the Company's deferred tax assets (Note 3).

Changes in assets and liabilities result primarily from the timing of
production, sales and purchases. Such changes in assets and liabilities
generally tend to even out over time and result in trends in cash flows from
operating activities generally reflecting earnings trends.

INVESTING ACTIVITIES: The Company's investing activities resulted in a net cash
use of $429,000 and $132,000 for the first quarter 2003 and 2002, respectively.
Cash flows from investing activities in each of the periods related principally
to additions to property, equipment, capitalized software and leasehold
improvements and the Company's investments in marketable securities. Additions
to property, equipment, capitalized software and leasehold improvements in each
of the periods focused on the manufacturing, sales and engineering functions of
the Company. The expenditures in first quarter 2003 relate primarily to
capitalized software used in the engineering and sales functions. Expenditures
in the first quarter 2002 relate primarily to general equipment upgrades and
modernization.



                                       13
<PAGE>

FINANCING ACTIVITIES: Net cash used by financing activities totaled zero and
$262,000 for the first quarter 2003 and 2002, respectively. Cash used from
financing activities in first quarter 2002 includes the purchase of redeemable
common stock of approximately $254,000.

At March 31, 2003, the Company had no material commitments to purchase capital
assets. The Company's significant long-term obligations are its operating leases
on its facilities and future debt payments. The Company has not paid any
dividends since its inception and does not anticipate paying any dividends in
2003.

In October 2001, the Company announced that its Board of Directors had
authorized the repurchase of up to $5 million of its common stock. Purchases are
authorized to be made from time to time during a twenty-four month period in the
open market or in privately negotiated transactions depending on market
conditions. The Company will cancel all shares that it repurchases. The
repurchase plan does not obligate the Company to repurchase any specific number
of shares and may be suspended at any time.

The Company has a $5 million revolving credit facility with a financial
institution. The revolving credit facility expires in June 2004. As of March 31,
2003, the Company had borrowings of $3.5 million under the facility classified
as long-term debt on its balance sheet. These borrowings are fully
collateralized by a certificate of deposit.

Management believes that cash generated from operations and borrowing
availability under the revolving credit facility, together with cash on hand,
will be sufficient to meet the Company's liquidity needs for working capital,
capital expenditures and debt service. To the extent that the Company's actual
operating results or other developments differ from the Company's expectations,
Interphase's liquidity could be adversely affected.

The Company periodically evaluates its liquidity requirements, alternative uses
of capital, capital needs and available resources in view of, among other
things, its capital expenditure requirements, and estimated future operating
cash flows. As a result of this process, the Company has in the past and may in
the future seek to raise additional capital, refinance or restructure
indebtedness, issue additional securities, repurchase shares of its common stock
or take a combination of such steps to manage its liquidity and capital
resources. In the normal course of business, the Company may review
opportunities for acquisitions, joint ventures or other business combinations in
the component products industry. In the event of any such transaction, the
Company may consider using available cash, issuing additional equity securities
or increasing the indebtedness of the Company or its subsidiaries.



                                       14
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

Due to the fact that the Company conducts business on a global basis in various
foreign currencies, it is exposed to adverse movements in foreign currency
exchange rates. The Company's operations in France are measured in the local
currency converted to the U.S. Dollar equivalent based on published exchange
rates for the periods reported and are therefore subject to risk of exchange
rate fluctuations. Historically, foreign currency translation and transaction
gains and losses have not been significant; however, in the first quarter 2003
the U.S. Dollar to Euro translation accounted for a charge of approximately
$225,000 when compared to first quarter 2002.

Market Price Risk

The Company has no equity hedge contracts outstanding as of March 31, 2003 or
December 31, 2002.

Interest Rate Risk

The Company's investments are subject to interest rate risk. Interest rate risk
is the risk that the Company's financial condition and results of operations
could be adversely affected due to movements in interest rates. The Company
invests its cash in a variety of interest-earning financial instruments,
including bank time deposits, money market funds, and variable rate and fixed
rate obligations of corporations and national governmental entities and
agencies. Due to the demand nature of the Company's money market funds and the
short-term nature of the Company's time deposits and debt securities portfolio,
these assets are particularly sensitive to changes in interest rates. The
Company manages this risk through investments with shorter-term maturities and
varying maturity dates. If the Company's short-term assets are reinvested in a
declining interest rate environment, the Company would experience an immediate
negative impact on other income. The opposite holds true in a rising interest
rate environment.

ITEM 4.  CONTROLS AND PROCEDURES

The Company's management, under the supervision of our Chief Executive Officer
("CEO") and Chief Financial Officer ("CFO"), performed an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures within 90 days before the filing date of this quarterly report.
Based on that evaluation, the CEO and CFO concluded that the Company's
disclosure controls and procedures are effective. There have been no significant
changes in the Company's internal controls or in other factors that could
significantly affect disclosure controls subsequent to the date of this
evaluation.



                                       15
<PAGE>

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

         EXHIBITS

         2(a)     Stock Purchase Agreement, dated as of June 29, 1996, among
                  Interphase Corporation, Synaptel and Philippe Oros, Xavier
                  Sutter, Francois Lecerf, Schroder Ventures French Enterprise
                  Fund LPI (USA), Schroder ventures French Enterprise Fund UKLP
                  (UK) and Schroder Ventures Holding Limited (UK). (1)

         3(a)     Certificate of Incorporation of the registrant. (2)

         3(b)     Amendment to Articles of Incorporation of the registrant. (3)

         3(c)     Amended and Restated Bylaws of the registrant adopted on
                  December 5, 1995 and amended on January 19, 1999. (4)

         4(a)     Rights Agreement dated as of December 7, 2000 by and between
                  the Company and Computershare Investor Services, LLC as Rights
                  Agent. (5)

         99(a)    Certification Pursuant to 18 U.S.C Section 1350, As Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)

         99(b)    Certification Pursuant to 18 U.S.C Section 1350, As Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (6)

         REPORTS ON FORM 8-K

         None



                                       16
<PAGE>
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                             INTERPHASE CORPORATION
                                             (Registrant)
Date:  May 14, 2003

                                             /s/ Steven P. Kovac
                                             -----------------------------------
                                             Steven P. Kovac
                                             Chief Financial Officer, Vice
                                             President of Finance and Treasurer
                                             (Principal Financial and Accounting
                                             Officer)





                                       17
<PAGE>

                    CERTIFICATION PURSUANT TO RULE 13a-14(b)

I, Gregory B. Kalush, certify that:

         1.       I have reviewed this quarterly report on Form 10-Q of
                  Interphase Corporation (the Company);

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the Company
                  as of, and for, the periods presented in this quarterly
                  report;

         4.       The Company's other certifying officer and I are responsible
                  for establishing and maintaining disclosure controls and
                  procedures (as defined in Exchange Act Rules 13a-14) for the
                  Company and we have:

                  (a) designed such disclosure controls and procedures to ensure
                  that material information relating to the Company, including
                  its consolidated subsidiaries, is made known to us by others
                  within those entities, particularly during the period in which
                  this quarterly report is being prepared;

                  (b) evaluated the effectiveness of the Company's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the Evaluation
                  Date); and

                  (c) presented in this quarterly report our conclusions about
                  the effectiveness of the disclosure controls and procedures
                  based on our evaluation as of the Evaluation Date;

         5.       The Company's other certifying officer and I have disclosed,
                  based on our most recent evaluation, to the Company's auditors
                  and the Audit Committee of the Company's Board of Directors:

                  (a) all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the Company's
                  ability to record, process, summarize and report financial
                  data and have identified for the Company's auditors any
                  material weaknesses in internal controls; and

                  (b) any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the Company's internal controls; and

         6.       The Company's other certifying officer and I have indicated in
                  this quarterly report whether or not there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.

Date: May 14, 2003                    Signature: /s/ Gregory B. Kalush
      -----------------------                    -------------------------------
                                                     Chief Executive Officer



                                       18
<PAGE>

                    CERTIFICATION PURSUANT TO RULE 13a-14(b)

I, Steven P. Kovac, certify that:

         1.       I have reviewed this quarterly report on Form 10-Q of
                  Interphase Corporation (the Company);

         2.       Based on my knowledge, this quarterly report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

         3.       Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the Company
                  as of, and for, the periods presented in this quarterly
                  report;

         4.       The Company's other certifying officer and I are responsible
                  for establishing and maintaining disclosure controls and
                  procedures (as defined in Exchange Act Rules 13a-14) for the
                  Company and we have:

                  (a) designed such disclosure controls and procedures to ensure
                  that material information relating to the Company, including
                  its consolidated subsidiaries, is made known to us by others
                  within those entities, particularly during the period in which
                  this quarterly report is being prepared;

                  (b) evaluated the effectiveness of the Company's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the Evaluation
                  Date); and

                  (c) presented in this quarterly report our conclusions about
                  the effectiveness of the disclosure controls and procedures
                  based on our evaluation as of the Evaluation Date;

         5.       The Company's other certifying officer and I have disclosed,
                  based on our most recent evaluation, to the Company's auditors
                  and the Audit Committee of the Company's Board of Directors:

                  (a) all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the Company's
                  ability to record, process, summarize and report financial
                  data and have identified for the Company's auditors any
                  material weaknesses in internal controls; and

                  (b) any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the Company's internal controls; and

         6.       The Company's other certifying officer and I have indicated in
                  this quarterly report whether or not there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.

Date: May 14, 2003                  Signature: /s/ Steven P. Kovac
      ------------------                       ---------------------------------
                                                   Chief Financial Officer



                                       19
<PAGE>

                                INDEX TO EXHIBITS

Exhibits
--------

<Table>
<S>      <C>
2(a)     Stock Purchase Agreement, dated as of June 29, 1996, among Interphase
         Corporation, Synaptel and Philippe Oros, Xavier Sutter, Francois
         Lecerf, Schroder Ventures French Enterprise Fund LPI (USA), Schroder
         ventures French Enterprise Fund UKLP (UK) and Schroder Ventures Holding
         Limited (UK). (1)

3(a)     Certificate of Incorporation of the registrant. (2)

3(b)     Amendment to Articles of Incorporation of the registrant. (3)

3(c)     Amended and Restated Bylaws of the registrant adopted on December 5,
         1995 and amended on January 19, 1999. (4)

4(a)     Rights Agreement dated as of December 7, 2000 by and between the
         Company and Computershare Investor Services, LLC as Rights Agent. (5)

99(a)    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002 (6)

99(b)    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002 (6)
</Table>

----------

(1)      Filed as an exhibit to Report on Form 8-K on August 6, 1996, and
         incorporated herein by reference.

(2)      Filed as an exhibit to Registration Statement No. 2-86523 on Form S-1
         and incorporated herein by reference.

(3)      Filed as an exhibit to Report on Form 10-K for the year ended December
         31, 1999, and incorporated herein by reference.

(4)      Filed as an exhibit to Report on Form 10-K for the year ended December
         31, 2001, and incorporated herein by reference.

(5)      Filed as an exhibit to Form 8-K on January 9, 2001, and incorporated
         herein by reference.

(6)      Filed herein.





                                       20