<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

              |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

              |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        FOR THE TRANSITION PERIOD FROM TO

                         COMMISSION FILE NUMBER 0-26747

                      AIRONET WIRELESS COMMUNICATIONS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 DELAWARE                               34-1758180
   (STATE OR OTHER JURISDICTION OF          (I.R.S. EMPLOYER IDENTIFICATION NO.)
    INCORPORATION OR ORGANIZATION)

     3875 EMBASSY PARKWAY, AKRON, OHIO                   44333
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)            (ZIP CODE)

                                 (330) 664-7900
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                                 NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) Yes [X] No [ ], and (2) has been
subject to such filing requirements for the past 90 days Yes |X| No |_|.

         At November 12, 1999 there were 14,202,910 shares of Registrant's
Common Stock outstanding.



<PAGE>   2



                      AIRONET WIRELESS COMMUNICATIONS, INC.
                                      INDEX

<TABLE>
<CAPTION>



                                                                                                                    PAGE

PART I. FINANCIAL INFORMATION
<S>              <C>                                                                                                 <C>

                 Item 1. Financial Statements:
                          Consolidated Balance Sheets as of September 30, 1999
                              and March 31, 1999..................................................................     3
                          Consolidated Statements of Operations for the
                              Three-Month and Six-Month Periods Ended September 30, 1999 and 1998.................     4
                          Consolidated Statements of Cash Flows for the
                              Three-Month Periods Ended September 30, 1999 and 1998...............................     5
                          Notes to the Consolidated Financial Statements..........................................     6
                 Item 2. Management's Discussions and Analysis of Financial Condition
                              and Results of Operation............................................................    10
                 Item 3. Quantitative and Qualitative Disclosures about Market Risk...............................    26

PART II. OTHER INFORMATION

                 Item 2. Changes in Securities and Use of Proceeds................................................    28
                 Item 6. Exhibits and Reports on Form 8-K.........................................................    29
                 Signatures   ....................................................................................    32
                 Exhibit Index....................................................................................    33

</TABLE>


                                       2

<PAGE>   3



PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                AIRONET WIRELESS COMMUNICATIONS, INC.
                                                     CONSOLIDATED BALANCE SHEETS
                                                  (IN THOUSANDS, EXCEPT SHARE DATA)

                                                                                  SEPTEMBER 30,             MARCH 31,
                                                                                      1999                    1999
                                                                                   (UNAUDITED)
                                                                                ----------------          ------------
ASSETS
<S>                                                                                  <C>                    <C>

Current assets:
     Cash and cash equivalents                                                       $ 48,008               $  6,137
     Accounts receivable, trade, net                                                    5,375                  4,242
     Accounts receivable, other                                                           680                    243
     Receivable from affiliate                                                          4,051                  3,609
     Inventories                                                                        5,039                  4,625
     Deferred tax asset                                                                   802                    733
     Prepaid expenses and other                                                           678                    404
     Income taxes receivable                                                              282                    620
                                                                                     --------               --------
          Total current assets                                                         64,915                 20,613
Property and equipment, net                                                             2,717                  2,381
Deferred tax asset                                                                        932                    882
Intangible assets, net                                                                  2,725                  3,191
Other long-term assets                                                                      5                    131
                                                                                     --------               --------
          Total assets                                                               $ 71,294               $ 27,198
                                                                                     ========               ========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                                $  4,838               $  4,618
     Payable to affiliate                                                               1,015                  2,085
     Income taxes payable                                                                 239                     30
     Deferred tax liability                                                              --                       10
     Accrued liabilities                                                                4,599                  3,358
                                                                                     --------               --------
          Total current liabilities                                                    10,691                 10,101
 Line of credit                                                                          --                    2,500
                                                                                     --------               --------
          Total liabilities                                                            10,691                 12,601

Stockholders' equity:
     Common stock, $.01 par value per share; 60,500,000
        shares authorized; 14,203,544 shares issued and                                   142                     96
        outstanding
     Additional paid-in capital                                                        63,638                 19,101
     Accumulated deficit                                                               (3,177)                (4,600)
                                                                                     --------               --------
          Total stockholders' equity                                                   60,603                 14,597
                                                                                     --------               --------
          Total liabilities and stockholders' equity                                 $ 71,294               $ 27,198
                                                                                     ========               ========
</TABLE>

       See accompanying notes to the consolidated financial statements.





                                       3
<PAGE>   4

<TABLE>
<CAPTION>

                                                AIRONET WIRELESS COMMUNICATIONS, INC.
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                             (UNAUDITED)


                                                           THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                              SEPTEMBER  30,                      SEPTEMBER 30,

                                                         1999               1998             1999               1998
                                                         ----               ----             ----               ----

<S>                                                    <C>               <C>               <C>               <C>
Revenues:
   Non-affiliate                                       $ 10,298          $  5,049          $ 19,763          $ 11,211
   Affiliate product                                      3,231             2,470             4,724             3,904
   Affiliate royalty                                      1,445             2,460             2,890             4,341
                                                       --------          --------          --------          --------
       Total revenues                                    14,974             9,979            27,377            19,456
                                                       --------          --------          --------          --------
Cost of revenues:
   Non-affiliate                                          5,800             3,541            11,097             7,449
   Affiliate                                              2,420             2,072             3,570             3,286
                                                       --------          --------          --------          --------
       Total cost of revenues                             8,220             5,613            14,667            10,735
                                                       --------          --------          --------          --------
Gross profit:
   Non-affiliate                                          4,498             1,508             8,666             3,762
   Affiliate product                                        811               398             1,154               618
   Affiliate royalty                                      1,445             2,460             2,890             4,341
                                                       --------          --------          --------          --------
       Total gross profit                                 6,754             4,366            12,710             8,721
                                                       --------          --------          --------          --------
Operating expenses:
   Sales and marketing                                    2,432             1,274             4,791             2,756
   Research and development                               1,758             1,527             3,516             3,151
   General and administrative                             1,067               898             1,848             1,998
   Goodwill amortization                                    216               216               432               432
                                                       --------          --------          --------          --------
       Total operating expenses                           5,473             3,915            10,587             8,337
                                                       --------          --------          --------          --------
Income from operations                                    1,281               451             2,123               384
Interest (income), net                                     (372)             --                (389)              (10)
                                                       --------          --------          --------          --------
Income before income taxes                                1,653               451             2,512               394
Provision for income taxes                                  675               618             1,089               540
                                                       --------          --------          --------          --------
Net income (loss)                                      $    978          ($   167)         $  1,423          ($   146)
                                                       ========          ========          ========          ========
Net income (loss) per common share:
   Basic                                               $   0.08          ($  0.02)         $   0.13          ($  0.02)
                                                       --------          --------          --------          --------
   Diluted                                             $   0.07          ($  0.02)         $   0.12          ($  0.02)
                                                       --------          --------          --------          --------
Weighted average shares used in calculating
   net income (loss) per common share:
   Basic                                                 12,303             9,339            10,838             9,277
                                                       --------          --------          --------          --------
   Diluted                                               13,480             9,339            12,051             9,277
                                                       --------          --------          --------          --------
</TABLE>




     See accompanying notes to the consolidated financial statements.



                                       4
<PAGE>   5
<TABLE>
<CAPTION>


                                       AIRONET WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (IN THOUSANDS)
                                                             (UNAUDITED)

                                                                                                SIX  MONTHS ENDED SEPTEMBER 30,
                                                                                                1999                      1998
                                                                                                ----                      ----

<S>                                                                                         <C>                     <C>
Cash flows from operating activities:
   Net income ......................................................................        $  1,423                $   (146)
   Adjustments to reconcile net income to net
   cash provided by operating activities:
      Depreciation .................................................................             606                     653
      Amortization .................................................................             561                     577
      Provision for doubtful accounts ..............................................             163                     156
      Provision for inventory obsolescence .........................................             655                      96
      Deferred income taxes ........................................................            (129)                   (109)
      Stock compensation expense ...................................................             224                     780
      Changes in other assets and liabilities:
         Accounts receivable, trade ................................................          (1,296)                    882
         Accounts receivable, other ................................................            (437)                 (2,259)
           Receivable from affiliate ...............................................            (442)                 (1,534)
           Inventories .............................................................          (1,069)                   (633)
           Prepaid expenses and other assets .......................................            (274)                    (89)
           Income taxes receivable .................................................             338                    --
           Other long-term assets ..................................................             (12)                    (46)
           Accounts payable ........................................................             220                     575
           Payable to affiliate ....................................................          (1,260)                    121
           Income taxes payable ....................................................             209                     650
           Accrued liabilities .....................................................           1,241                     680
                                                                                            --------                --------
             Total adjustments .....................................................            (702)                    500
                                                                                            --------                --------
             Net cash provided by operating activities .............................             721                     354
Cash flows from investing activities:
   Capital expenditures ............................................................            (942)                   (563)
   Purchases of intangible assets ..................................................             (95)                   --
                                                                                            --------                --------
             Net cash used in investing activities .................................          (1,037)                   (563)
                                                                                            --------                --------
Cash flows from financing activities:
   Payable to affiliate ............................................................            --                    (3,648)
   Net proceeds from sales of stock ................................................          45,664                   1,918
   Line of credit ..................................................................          (2,500)                  2,500
   Options exercised ...............................................................             202                    --
   Deferred offering costs .........................................................          (1,179)                   --
                                                                                            --------                --------
             Net cash provided by financing activities .............................          42,187                     770
                                                                                            --------                --------
Net (decrease) increase in cash and cash equivalents ...............................          41,871                     561
Cash and cash equivalents at beginning of period ...................................           6,137                   2,864
                                                                                            --------                --------
Cash and cash equivalents at end of period .........................................        $ 48,008                $  3,425
                                                                                            ========                ========
</TABLE>

        See accompanying notes to the consolidated financial statements.




                                         5
<PAGE>   6



             AIRONET WIRELESS COMMUNICATIONS, INC. AND SUBSIDIARIES
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

         The financial information herein includes the accounts of Aironet
Wireless Communications, Inc. and its subsidiaries (the "Company"). The
accompanying unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all financial information and disclosures
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, these unaudited consolidated financial
statements reflect all adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation of the consolidated statement of
financial position as of September 30, 1999 and the related statements of
operations and cash flows for the three-month and six-month periods ended
September 30, 1999 and 1998. The results of operations for interim periods are
not necessarily indicative of the results to be expected for the full year. For
further information refer to the Consolidated Financial Statements and the Notes
thereto included in the Company's Registration Statement on Form S-1, as amended
(Registration No. 333-78507), filed with the Securities and Exchange Commission
on May 14, 1999 and which became effective on July 29, 1999 (the "Registration
Statement") and Form 10-Q filed September 10, 1999.

The Company has no items of other comprehensive income.

NOTE 2 -- INVENTORIES

Inventories consisted of the following:
<TABLE>
<CAPTION>

                                                                                           SEPTEMBER 30,     MARCH 31,
                                                                                               1999            1999
                                                                                               ----            ----
                                                                                                  (IN THOUSANDS)

<S>                                                                                         <C>            <C>
Purchased components...........................................................             $    3,915     $    3,723
Work-in-process................................................................                    401            290
Finished goods.................................................................                    723            612
                                                                                            ----------     ----------
                                                                                            $    5,039     $    4,625
                                                                                            ==========     ==========
</TABLE>

NOTE 3 -- NET INCOME PER COMMON SHARE

         Basic net income per common share is based on the weighted average
number of common shares outstanding during the period. Diluted net income per
common share is based on the weighted average number of common shares
outstanding during the period plus, if dilutive, the incremental number of
common shares issuable on a pro forma basis upon the exercise of employee and
non-employee stock options and stock purchase warrants, assuming the proceeds
are used to repurchase outstanding shares at the average market price during the
quarter. A reconciliation of the denominators of the basic and diluted per share
computations is provided below:
<TABLE>
<CAPTION>

                                                                         THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                         ------------------             ----------------
                                                                           SEPTEMBER  30,                SEPTEMBER 30,
                                                                           --------------                -------------

                                                                        1999           1998           1999            1998
                                                                        ----           ----           ----            ----



<S>                                                                    <C>             <C>           <C>             <C>
Weighted average common shares outstanding - basic ................    12,303          9,339         10,838          9,277
Additional shares potentially issuable for
   stock options and stock purchase warrants ......................     1,177           --            1,213           --
                                                                       ------         ------         ------         ------
Weighted average common shares outstanding - diluted ..............    13,480          9,339         12,051          9,277
                                                                       ======         ======         ======         ======
</TABLE>




                                       6

<PAGE>   7



         For the three months ended September 30, 1999 and 1998, 0 and 1,032,737
respectively, of stock options and stock purchase warrants were not included in
the diluted per share computations due to not being "in the money." For the six
months ended September 30, 1999 and 1998, 0 and 1,032,737 respectively, of stock
options and stock purchase warrants were not included in the diluted per share
computations due to not being "in the money." The computations of net income per
common share for all periods presented do not include the effects of any
dilutive incremental common shares related to stock options granted or common
stock warrants issued with exercise rights that are contingent, so long as the
contingency is not resolved.


NOTE 4 -- STOCKHOLDERS' EQUITY AND STOCK WARRANTS AND OPTIONS


STOCKHOLDER RIGHTS AGREEMENT

         On April 12, 1999, the Board of Directors adopted and approved a
stockholder "Rights Plan" and the Board declared a dividend of one common stock
purchase right on each share of common stock outstanding prior to the
effectiveness of the plan; thereafter, shares are issued pursuant to the plan
with a purchase right. The Company's Stockholders approved the Rights Plan on
May 7, 1999. The Rights Plan is designed to deter abusive market manipulation or
unfair takeover tactics and to prevent an acquirer from gaining control of the
Company without offering a fair price to all stockholders. Each purchase right,
when exercisable, entitles the registered holder to purchase one share of common
stock at a price of $125 per share, subject to adjustment. The purchase rights
become exercisable in the event the Company is a party to certain merger or
business combination transactions, as defined, or in the event an "acquiring
person," as defined, becomes a beneficial owner of 15% or more of the Company's
outstanding common stock. In these circumstances, each holder of a share right
(other than the acquiring person) will have the right to receive shares of the
acquiring company or the Company, as appropriate, having a market value of two
times the exercise price of the purchase right. The rights expire ten years from
the effective date of the plan unless earlier redeemed by the Company. The
rights can be redeemed at a price of $.001 per right.


CAPITAL STOCK

         On August 27, 1999, the Company's underwriters exercised their option
to purchase an additional 846,800 shares to cover over-allotments sold by the
underwriters in our Initial Public Offering ("Offering"), of which 564,562
shares were sold by the Company and 282,238 shares were sold by Telxon, as a
selling stockholder. The closing of this transaction took place on September 1,
1999 with proceeds to the Company of $5,775,469.26.


NOTE 5 -- SUBSEQUENT EVENTS

         Effective October 19, 1999, Aironet's Board of Directors entered into
Change of Control agreements with five of its executives. Pursuant to these
agreements, should an executive be terminated without cause or resigns with good
cause within two years of a change of control, that executive will receive
severance pay equivalent to one or two times the executive's prior years' annual
compensation and receive benefit plan coverage for a period of up to two years
from change in control.

         Effective October 29, 1999, the Compensation Committee of Aironet's
Board of Directors adopted the First Amendment to the Aironet Wireless
Communications, Inc, 1999 Employee Stock Purchase Plan. The amendment changes
the commencement of the initial payment period from the first day of the first
month following our initial public offering to the first pay day in November
1999 and makes a technical change relating to foreign subsidiaries.

         Pursuant to an Agreement and Plan of Merger and Reorganization dated as
of November 8, 1999 (the "Merger Agreement") by and among Cisco Systems, Inc.
("Cisco"), Aironet and Osprey Acquisition Corporation, a wholly-owned subsidiary
of Cisco ("Merger Sub"), Merger Sub will merge (the "Merger") with and into
Aironet, with the separate corporate existence of Merger Sub ceasing and Aironet
continuing as the surviving corporation and a wholly-owned subsidiary of Cisco.
At the effective time of the Merger (the "Effective Time"), each share of
Aironet's common stock issued and outstanding immediately prior to the Effective
Time will be converted automatically into the right to receive 0.63734 shares of
Cisco's common stock, and the Aironet stock will be deregistered and delisted.
The value of the



                                       7
<PAGE>   8

transaction based on the trading price of Cisco's common stock on the date of
the Merger Agreement is approximately $799 million.

         The consummation of the Merger is subject to various conditions
precedent, including (i) approval of the Merger Agreement by the stockholders of
Aironet and (ii) expiration or early termination of the waiting period required
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

         Aironet has granted Cisco an option to acquire 2,826,375 shares of its
common stock, at an exercise price of $48 per share, exercisable upon the
occurrence of certain events and has agreed to pay Cisco a fee of $25 million if
the Merger is not consummated and certain events have occurred. In addition,
certain stockholders of Aironet have agreed to vote in favor of the approval of
the Merger Agreement.

         In connection with the Merger Agreement, Aironet's Board of Directors
adopted Amendment No. 1 to the Stockholder Rights Agreement dated November 8,
1999. The amendment assures that the purchase rights associated with Aironet's
common stock do not become exercisable as a result of Aironet entering into the
Merger Agreement, consummating the Merger or in the event that Telxon
Corporation transfers its shares of Aironet to a wholly owned subsidiary of
Telxon prior to the Merger. In addition, the Company entered into an Agreement
with Telxon and Cisco dated as of November 8, 1999, pursuant to which certain of
Telxon's agreements with Aironet terminate at the Effective Time of the Merger
and certain other agreements will come into force.

         Also in connection with the Merger, Aironet's Board of Directors took
action not to accelerate outstanding options other than those granted under the
1999 Stock Option Plan for Non-Employee Directors and not to cash out any
outstanding options which will be assumed by Cisco. Aironet's employee benefit
plans will not be assumed by Cisco, rather after the Merger eligible employees
will be able to participate in Cisco's benefit plans.

         On October 18, 1999, Aironet's Board of Directors granted options under
the 1999 Omnibus Stock Incentive Plan to purchase 105,000 shares of the
Company's common stock.


ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING
OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES
ACT OF 1934, AS AMENDED. SUCH STATEMENTS ARE BASED UPON MANAGEMENTS' CURRENT
EXPECTATIONS THAT INVOLVE RISKS AND UNCERTAINTIES. ANY STATEMENTS CONTAINED
HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE
FORWARD-LOOKING STATEMENTS. FOR EXAMPLE, THE WORDS "BELIEVES," "ANTICIPATES,"
"PLANS," "EXPECTS," "INTENDS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. AIRONET'S ACTUAL RESULTS AND THE TIMING OF CERTAIN
EVENTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DISCREPANCY INCLUDE,
BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "OTHER FACTORS AFFECTING OPERATING
RESULTS, LIQUIDITY AND CAPITAL RESOURCES" BELOW, AS WELL AS RISK FACTORS
INCLUDED IN THE REGISTRATION STATEMENT. ALL FORWARD-LOOKING STATEMENTS IN THIS
DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO AIRONET AS OF THE DATE HEREOF AND
AIRONET ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS.

OVERVIEW

         Aironet designs, develops and markets high speed, standards-based
wireless local area networking solutions. Our products utilize advanced radio
frequency and data communication technologies to connect users to computer
networks ranging in size and complexity from enterprise-wide LANs to home
networks. Each of our product families is designed around our Microcellular
Architecture, a distributed wireless network designed to support the unique
requirements of mobile computing. Our wireless LAN solutions are used as
extensions of existing enterprise networks, enabling personal computer users to
maintain a wireless network connection anywhere throughout a building or around
a campus. In addition, our LAN adapters are configurable as peer-to-peer
wireless networks for providing shared access to files, peripherals and the
Internet in small office/home office environments.

         We sell indirectly through a network of distributors, resellers and
OEMs. We have a dedicated OEM sales organization. The typical OEM sales cycle
involves six months during which evaluations and negotiations over price and
sometimes volume levels take place. Our distributors sell product to our
resellers. Our distributors generally maintain inventory to fulfill orders from




                                       8
<PAGE>   9

our resellers. We have a dedicated sales organization to support our resellers
in their efforts to sell to end users. Resellers have a choice of directly
purchasing through us or through our distributors.

         We recognize revenues from sales to resellers and OEMs at the time we
ship the products. We are a party to contracts with our major distributors,
wherein we either reserve against revenues from our sales to distributors or
defer revenue recognition, depending on the nature and scope of the
distributor's return right. Distributors under contract are afforded price
protection. We reserve against revenue for those price protections, provided to
the distributors under contract. We believe that these rights of return and
price protections are standard negotiated terms provided by manufacturers to
large distributors of high tech products.







                                       9
<PAGE>   10



RESULTS OF OPERATIONS

         The following table presents, for the periods indicated, our operating
results expressed as a percentage of our total revenues.
<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                        ------------------             ----------------
                                                                           SEPTEMBER  30,               SEPTEMBER 30,
                                                                           --------------               -------------

                                                                       1999            1998         1999           1998
                                                                       ----            ----         ----           ----

<S>                                                                     <C>             <C>           <C>            <C>
Revenues:
   Non-affiliate.........................................................69%            51%           72%            58%
   Affiliate product.....................................................22             25            17             20
   Affiliate royalty......................................................9             24            11             22
                                                                      -----          -----         -----          -----
       Total revenues...................................................100            100           100            100
                                                                      -----          -----         -----          -----
Cost of revenues.........................................................55             56            54             55
                                                                      -----          -----         -----          -----
Gross profit.............................................................45             44            46             45
Operating expenses:
   Selling and marketing.................................................16             13            17             14
   Research and development..............................................12             15            13             16
   General and administrative.............................................7              9             7             11
Goodwill amortization.....................................................2              2             1              2
         .............................................................-----          -----         -----          -----
Total operating expenses.................................................37             39            38             43
                                                                      -----          -----         -----          -----
Income (loss) from operations.............................................8              5             8              2
Interest expense (income), net...........................................(3)             0            (1)             0
                                                                      -----          -----         -----          -----
Income (loss) before income taxes........................................11              5             9              2
                                                                      -----          -----         -----          -----
Provision (benefit) for income taxes......................................4              6             4              3
                                                                      -----          -----         -----          -----
Net income................................................................7             (1)            5             (1)
</TABLE>

         The following table presents, for the periods indicated, costs of
revenues and gross profits specifically as a percentage of non-affiliate,
affiliate product and affiliate royalty revenues.
<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                          SEPTEMBER  30,                 SEPTEMBER 30,
                                                                          --------------                 -------------

                                                                        1999           1998           1999         1998
                                                                        ----           ----           ----         ----

<S>                                                                     <C>             <C>            <C>          <C>
Cost of revenues:
   Non-affiliate.........................................................56%            70%            56%          66%
   Affiliate product.....................................................75             84             76           84
   Affiliate royalty....................................................---            ---            ---          ---

Gross profit:
   Non-affiliate.........................................................44%            30%            44%          34%
   Affiliate product.....................................................25             16             24           16
   Affiliate royalty....................................................100            100            100          100
</TABLE>



                                       10
<PAGE>   11


THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS
AND SIX MONTHS ENDED SEPTEMBER 30, 1998

         Revenues

         Total Revenues. Total revenues increased 50% from $10.0 million in the
three months ended September 30, 1998 to $15.0 million in the three months ended
September 30, 1999, and increased 41% from $19.5 million in the six months ended
September 30, 1998 to $27.4 in the six months ended September 30, 1999. These
increases resulted primarily from increased sales of our high speed (11 Mbps)
and IEEE 802.11 products to our non-affiliate customers.

         During the three months ended September 30, 1999, we derived 21% of our
total revenues from sales to customers outside the United States, compared to
23% of our total revenues in the three months ended September 30, 1998.
International revenues grew 33% from $2.3 million in the three months ended
September 30, 1998 to $3.1 million in the three months ended September 30, 1999.

         During the six months ended September 30, 1999, we derived 24% of our
total revenues from sales to customers outside the United States, compared to
22% of our total revenues in the six months ended September 30, 1998.
International revenues grew 54% from $4.3 million in the six months ended
September 30, 1998 to $6.7 million in the six months ended September 30, 1999.

         These increases were due primarily to increased sales of our high
speed and IEEE 802.11 based products. Our foreign sales are made in U.S.
dollars, and therefore the adoption of the Euro as an European currency should
not have a direct impact on our foreign exchange.

         Non-affiliate. Non-affiliate revenues grew 104% from $5.0 million in
the three months ended September 30, 1998 to $10.3 million in the three months
ended September 30, 1999, and 76% from $11.2 million in the six months ended
September 30, 1999 to $19.8 million for the six months ended September 30, 1999.
Increased non-affiliate revenues resulted from the continued success of our new
high speed (11Mbps) 4800 Turbo DS in-building wireless LAN product line and the
BR500 building-to-building product line.

         As a percentage of total revenues, non-affiliate revenues increased
from 51% in the three months ended September 30, 1998 to 69% in the three months
ended September 30, 1999 and from 58% to 72% in the comparable six month
periods. This increase was as the result of higher non-affiliate sales and lower
revenues from our affiliate.

         Affiliate. Affiliate revenues are derived from Telxon Corporation and
consist of product and royalty revenues. As a percentage of total revenues,
affiliate revenues decreased from 76% in fiscal year 1997 to 55% in fiscal year
1998 and 37% in fiscal year 1999. Affiliate revenues as a percentage of total
revenues were 31% during the three months ended September 30, 1999 compared to
49% for the three months ended September 30, 1998 and 24% for the three months
ended June 30, 1999. For the comparable six-month periods, the percentage
declined from 42% to 28%.

         This continued decrease is due in large part to a significant increase
in product sales to non-affiliate customers and reflects the market acceptance
of our newer, high speed and standards-compliant products and growth of our
customer base. This decrease is also due in part to a decrease in affiliate
royalty revenue, offset in part by an increase in affiliate product revenue.

         Affiliate Product. Product revenues from Telxon increased 31% from $2.5
million in the three months ended September 30, 1998 to $3.2 million in the
three months ended September 30, 1999 and increased 21% from $11.2 million to
$19.8 million for the comparable six month periods. This increase was primarily
due to increased sales to Telxon of our IEEE 802.11-based product lines: 4800
Turbo DS series, 4500 series and 3500 series.

         Affiliate Royalty. Royalty revenues from Telxon decreased 41% from $2.5
million in the three months ended September 30, 1998 to $1.4 million in the
three months ended September 30, 1999 and decreased 33% from $4.3 million to
$2.9 million for the comparable six month period. In the fiscal quarter ended
March 31, 1999, the License, Rights and Supply agreement with Telxon was amended
to provide for a decreasing fixed royalty, instead of a per unit royalty. The
fixed royalty permits us to





                                       11
<PAGE>   12

recognize affiliate royalty income on a straight-line basis and resulted in
lower royalty revenue in the three month and six-month periods ended September
30, 1999 compared to the three months and six months ended September 30, 1998.

         Gross Profit

         Total Gross Profit. Our total gross profit increased 55% from $4.4
million in the three months ended September 30, 1998 to $6.8 million in the
three months ended September 30, 1999, and increased 46% from $8.7 million for
the six month period ended September 30, 1998 to $12.7 million for the six month
period ended September 30, 1999.

         Non-affiliate. Non-affiliate gross profit as a percentage of revenue
increased to 44% in the three months ended September 30, 1999 from 30% in the 3
months ended September 30, 1998. For the six month's ended September 30, 1999,
non-affiliate gross profit percentage was 44% as compared to 34% for the six
month's ended September 30, 1998. These increases resulted primarily from the
success of our new high speed BR500 building-to-building product lines and the
4800 Turbo DS in-building wireless LAN product line as well as cost reductions
on our other 802.11 compliant products.


         Affiliate Product. Affiliate gross profit as a percentage of revenue
increased to 25% in the three months ended September 30, 1999 from 16% in the 3
months ended September 30, 1998. For the six month's ended September 30, 1999,
non-affiliate gross profit percentage was 24% as compared to 16% for the six
month's ended September 30, 1998. This is primarily due to changes in product
mix.

         Affiliate Royalty. Each dollar of royalty revenues results in an
equivalent gross profit because there is a de minimus cost of revenues
associated with royalties. Royalty gross profit decreased 41% from $2.5 million
in the three months ended September 30, 1998 to $1.4 million in the three months
ended September 30, 1999 and decreased 33% from $4.3 million in the six months
ended September 30, 1998 to $2.9 million for the six months ended September 30,
1999. In the fiscal quarter ended March 31, 1999, the License, Rights and Supply
agreement with Telxon was amended to recognize royalty income on a straight-line
basis instead of a per unit basis. This resulted in lower royalty gross profit
in the three-month and six-month periods ended September 30, 1999 compared to
the three-month and six-month periods ended September 30, 1998.

         Operating Expenses

         Sales and Marketing. Our sales and marketing expenses increased 91%
from $1.3 million in the three months ended September 30, 1998 to $2.4 million
in the three months ended September 30, 1999, and increased 74% from $2.8
million in the six months ended September 30, 1998 to $4.8 million in the six
months ended September 30, 1999. This increase is primarily due to increases in
headcount and associated expenses along with increased emphasis on our
value-added reseller program.

         As a percentage of total revenues, sales and marketing expenses
increased from 13% in the three months ended September 30, 1998 to 16% in the
three months ended September 30, 1999 and increased from 14% in the six months
ended September 30, 1998 to 18% for the six months ended September 30, 1999. We
expect that sales and marketing expenses will increase in absolute dollars as we
expand our branding program and further develop our sales channels, but will
vary from quarter to quarter due to timing of trade shows, advertising programs,
and product launches during the year.

         Research and Development. Research and development expenses increased
15% from $1.5 million in the three months ended September 30, 1998 to $1.8
million in the three months ended September 30, 1999 and increased 12% from $3.2
million in the six months ended September 30, 1998 to $3.5 million for the six
months ended September 30, 1999. This increase resulted primarily from increases
in engineering headcount.

         As a percentage of total revenues, research and development expenses
decreased from 15% in the three months ended September 30, 1998 to 12% in the
three months ended September 30, 1999 and from 16% for the six months ended
September 30, 1998 to 13% for the six months ended September 30, 1999. We expect
that research and development expenses will increase in absolute dollars as we
expand our offering of high speed networking solutions.

         General and Administrative. Our general and administrative expenses
increased 19% from $0.9 million in the three months ended September 30, 1998 to
$1.1 million in the three months ended September 30, 1999. Approximately half of
the






                                       12
<PAGE>   13

increase over prior year related to incremental expenses related to being a
public company in the current year along with increases in headcount.

         Our general and administrative expenses decreased 8% from $2.0 million
for the six month period ended September 30, 1998 to $1.8 million for the six
month period ended September 30, 1999. Included in the six month period ended
September 30, 1998 is $0.8 million of non-cash compensation expense while there
is only $0.2 million of non-cash compensation expense included in the six month
period ending September 30, 1999. After consideration of this impact, general
and administrative expenses increased $0.4 million. Approximately half of this
increase is due to new hires while the rest is due to required insurance expense
and other expenses related to being a public company in the current year.


         Provision for Income Taxes

         Our effective income tax rate of 137% exceeded the statutory rate for
the three months ended September 30, 1998 primarily due to various permanent
items such as goodwill, state taxes, foreign rate differential, and
non-deductible compensation expense resulting from the exercise of specific
stock options paid for by a note to us in February 1998. Our effective income
tax rate for the three months ended September 30, 1999 was 41% which exceeded
the statutory rate primarily due to various permanent items such as goodwill,
state taxes, and the foreign rate differential.


LIQUIDITY AND CAPITAL RESOURCES

         On July 30, 1999, we concluded the Offering of 6,000,000 shares of
common stock, in which we sold 4 million shares of common stock and received
approximately $40.9 million in cash after underwriter discounts and commissions
but prior to deduction of unpaid offering expenses. A portion of the proceeds
from the Offering was used to repay approximately $2.5 in outstanding debt
under our line of credit, with the balance remaining for general corporate
purposes. We believe that the proceeds of the Offering, cash and cash
equivalents balances generated from operations and our existing line of credit
will be sufficient to meet our operating and capital expenditure requirements
for at least the next twelve months. To the extent necessary, we may also
satisfy capital needs through bank borrowings and capital leases if these
sources are available on satisfactory terms. We may also from time to time
consider the acquisition of complementary technologies, although we have no
present commitments or agreements with respect to any specific acquisitions.
Any specific acquisitions could be of a size that would require us to raise
additional funds through the issuance of additional equity or debt securities.
There can be no assurance that these funds, if required, would be available on
terms acceptable to us, if at all.

         As of September 30, 1999 we have no outstanding debt.





                                       13




<PAGE>   14




YEAR 2000 READINESS DISCLOSURE

         Year 2000 issues result from the fact that many computer programs were
written with date-sensitive codes that utilize only the last two digits of a
date rather than all four digits to refer to a particular year. As the year 2000
approaches, these computer programs may be unable to process accurately date-
dependent information, as a program might interpret the year 2000 as 1900.

         The potential for Year 2000 issues arise primarily in three areas:

-        the products we sell, which might be date dependent and, as a result,
         improperly operate;

-        our dependence on vendors and contract manufacturers for components and
         subassemblies that might be impacted by the Year 2000 issues, and their
         inability to provide us with goods on a timely basis and within
         specifications due to their unresolved Year 2000 issues; and

-        our internal use of hardware or software computing resources which
         improperly recognize the true date and which could cause us to, among
         other things, improperly process customer orders or business
         information, and could result in failure of our internal systems.

         In the fiscal quarter ended March 31, 1999, we hired an independent
Year 2000 consultant to augment our internal efforts to complete a plan for
systematically assessing our Year 2000 exposure. Our assessment plan has been
completed, and we are now taking actions consistent with that plan.

         How Far Along Are We?

         We have completed testing of 100% of our critical systems and a
majority of our non-critical systems, with the following results.

         Our Products. We have evaluated our product line for year 2000 issues
and found that our products are not date-dependent, and we will be making no
Year 2000 product revisions.

         Vendors. We have obtained a Year 2000 compliance response from 72% of
our vendors. We continue to request vendor certifications from our remaining
vendors.

         Internal Systems. Consistent with the results of our readiness
assessment, we have performed a live Year 2000 test of our payables, receivables
and financial reporting systems, and our manufacturing, purchasing and sales
systems. Of these systems, two add-on software packages which perform non-
critical functions had Year 2000 deficiencies. These deficiencies have been
corrected. We have completed testing of our desktop PCs. Of these PCs, only one
PC was not Year 2000 compliant. This PC has been upgraded and is currently Year
2000 compliant. Laboratory PCs will not be tested as they are known not to be
Year 2000 compliant and they perform only non date sensitive tasks. Our computer
servers have been fully tested. One unit was not Year 2000 compliant and was
replaced in July 1999.

         Year 2000 Problems Experienced to Date

         We have experienced no Year 2000 problems to date. No information
technology projects have been deferred due to our Year 2000 efforts.





                                       14
<PAGE>   15



         Timetable

         Our Year 2000 readiness plan is task oriented by department. We use no
independent verification or validation process to assure reliability, risks or
costs estimates. The following table illustrates our Year 2000 readiness.
<TABLE>
<CAPTION>

CATEGORY                      TESTING                    PROBLEMS DETECTED                         REMEDIATION
--------                      -------                    -----------------                         -----------

<S>                     <C>                        <C>                                       <C>
Internal Systems        100% completed             Two add-on software packages,             Software packages and the PC
                                                   one PC and one computer server            have been upgraded and the
                                                                                             server was replaced in July 1999

Products                100% completed             None to date                              None required to date

Vendors                 Response received from     None to date                              None required to date
                        72% of vendors
</TABLE>

         Cost of Remediation. We currently estimate that our Year 2000
assessment efforts and correction of any internal Year 2000 issues identified
during our assessment, will total less than $100,000; however, in the event we
discover a Year 2000 issue which was previously unanticipated, we could incur
costs far in excess of this amount which would have a material adverse effect on
our business and financial results.

         Will We Be Ready?

         Most Likely Consequences of Year 2000 Problems. We expect to identify
and resolve all Year 2000 problems that could materially adversely affect our
business operations. However, we believe that it is not possible to determine
with complete certainty that all Year 2000 problems affecting us have been
identified or corrected. The number of devices and systems that could be
affected and the interactions among these devices and systems are too numerous
to address. In addition, no one can accurately predict which Year 2000
problem-related failures will occur or the severity, timing, duration or
financial consequences of these potential failures. We believe that a
significant number of operational inconveniences and inefficiencies for us, our
contract manufacturers and our customers will divert management's time and
attention, financial and human resources from ordinary business activity if any
of these Year 2000 problem related failures occur. Contingency Plans. We
continue to discus contingency plans to be implemented if our efforts to
identify and correct Year 2000 problems are not effective. We have begun to
formalize our contingency plan and will test the plan when complete. Depending
on the systems affected, these plans could include:

-        accelerated replacement of affected equipment or software;

-        short to medium-term use of backup equipment and software or other
         redundant systems;

-        increased work hours for our personnel or the hiring of additional
         information technology staff; and

-        the use of contract personnel to correct, on an accelerated basis, any
         Year 2000 problems that arise or to provide interim alternate solutions
         for information system deficiencies.

         Our implementation of any of these contingency plans could have a
material adverse effect on our business, financial condition and results of
operations.






                                       15
<PAGE>   16



OTHER FACTORS AFFECTING OPERATING RESULTS, LIQUIDITY AND CAPITAL RESOURCES

WE MAY NOT COMPLETE OUR MERGER WITH CISCO

         If our Merger with Cisco is not completed for any reason, we may be
subject to a number of material risks, including the following: (i) Aironet may
be required to pay Cisco a termination fee of $25 million, (ii) the option
granted to Cisco by Aironet may become exercisable, under certain
circumstances, (iii) the price of Aironet common stock may decline to the
extent that the current market price of Aironet common stock reflects a market
assumption that the merger will be completed and (iv) costs related to the
merger, such as legal, accounting and financial advisor fees, must be paid even
if the merger is not completed. In addition, Aironet's customers may, in
response to the announcement of the merger, delay or defer purchasing
decisions. Any delay or deferral in purchasing decisions by Aironet customers
could have a material adverse effect on Aironet's business, regardless of
whether or not the merger is ultimately completed. Similarly, current and
prospective Aironet employees may experience uncertainty about their future
role with Cisco until Cisco's strategies with regard to Aironet are announced
and executed. This may adversely affect Aironet's ability to attract and retain
key management, sales, marketing and technical personnel. Further, if the
merger is terminated and Aironet's board of directors determines to seek
another merger or business combination, there can be no assurance that it will
be able to find a partner willing to pay an equivalent or more attractive price
than that which would be paid in the merger. In addition, while the merger
agreement is in effect and subject to certain limited exceptions, Aironet is
prohibited from soliciting, initiating or encouraging or entering into certain
extraordinary transactions, such as merger, sale of assets or other business
combination, with any party other than Cisco.

OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO EVALUATE OUR BUSINESS AND
PROSPECTS

         We were incorporated in 1993 and therefore have only a short operating
history for you to evaluate. Your evaluation of our business and results of
operations must take into account this short operating history, which may not be
indicative of future results. Our business and prospects should also be
considered in light of the risks frequently encountered by companies in their
early stages of development in new and rapidly evolving markets. Because of our
short existence, our limited operating history as an independent company,
fluctuations in our past results, past operating deficits and the early stage of
development of our market, we cannot assure you that we will sustain
profitability.

         Only since March 1998 has our business operated without the financial
support of Telxon. A significant portion of the revenues reflected in our
financial statements are still earned from Telxon based on agreed upon prices
determined when Telxon was our majority stockholder. For the periods presented,
our financial statements do not represent our performance as an independent
company. In the future, loss of this revenue for any reason could adversely
affect our results of operations. We lease two facilities from Telxon and are
parties to various agreements with Telxon, including our license and sales
agreement. Arrangements with Telxon cannot be considered to be arm's length, and
therefore they do not necessarily reflect terms which could have been negotiated
with unrelated third parties. As a large stockholder and customer, Telxon may be
able to assert influence over us, which could impact our business or prevent us
from realizing benefits in some situations.

FLUCTUATIONS IN OUR OPERATING RESULTS MAY ADVERSELY AFFECT THE TRADING PRICE OF
OUR COMMON STOCK

         Our quarterly and annual operating revenues, expenses and operating
results may fluctuate due to a number of factors including:

-        the timing and cancellation of customer orders;

-        our ability to introduce new products and technologies on a timely
         basis;

-        market acceptance of our and our customers' products;

-        introduction of products by our competitors;

-        the level of orders received which can be shipped in a quarter;






                                       16
<PAGE>   17

-        the timing of our investments in research and development;

-        the timing and provision of pricing protection and returns from our
         distributors;

-        whether our customers buy from a distributor, an OEM or directly from
         us;

-        cost and availability of components and subassemblies;

-        competitive pressures on selling prices;

-        finished product availability and quality;

-        general economic conditions; and

-        changes in product mix.

         Our business is characterized by short-term orders and shipment
schedules. We have experienced difficulties efficiently managing our production
and inventory levels because, among other reasons, customers can typically
cancel or reschedule orders without significant penalty. Since we do not have a
substantial, noncancellable backlog, we typically plan our production and
inventory levels based on internal forecasts of customer demand, which are
highly unpredictable and can fluctuate substantially. Significant customer
cancellations or unforeseen fluctuations in customer demand could cause us to
over or under produce products, which could lead to overstocking or to
frustrating customer expectations, either of which could negatively affect
operating results or cause significant variations in our operating results from
quarter to quarter.

DECLINING SELLING PRICES OF NETWORKING EQUIPMENT MAY ADVERSELY AFFECT OUR
REVENUES

         Historically, average selling prices of networking equipment have
decreased over the life of a product. As a result, the average selling prices of
our products should be expected to decrease in the future, which may adversely
affect our operating results if we do not correspondingly decrease our costs.

OUR OPERATING RESULTS WILL SUFFER IF SALES DO NOT INCREASE AS ANTICIPATED TO
SUPPORT THE EXPENSES OF EXPANDING OUR BUSINESS

         Because our operating expenses for personnel, new product development
and inventory continue to increase, we must continue to generate increased sales
to offset these increased expenses. We have limited ability to reduce expenses
quickly in response to any revenue shortfalls. In response to anticipated long
lead times to obtain inventory and materials from our contract manufacturers and
suppliers, we have in the past and may continue to need to order in advance of
anticipated customer demand. This advance ordering has and may continue to
result in higher inventory levels, and we have and will continue to depend on an
increase in customer demand. Any significant shortfall in customer demand would
adversely impact our quarterly and annual operating results.

IF THE WIRELESS NETWORKING MARKET DOES NOT CONTINUE TO EVOLVE, OR IF OUR PRODUCT
DEVELOPMENT DOES NOT KEEP PACE WITH ITS EVOLUTION, DEMAND FOR OUR PRODUCTS MAY
DECLINE SIGNIFICANTLY

         The wireless networking market is at an early stage of development, is
rapidly evolving and its future is uncertain. Demand and market acceptance for
recently introduced wireless networking products and services like ours are
subject to a high level of uncertainty. It is likely that new wireless LAN
products will not be generally accepted unless they operate at higher speeds and
are sold at competitive prices. We cannot predict whether the wireless
networking market will continue to develop in a way that sufficient demand for
our products will emerge and become sustainable. Our prospects must be evaluated
in light of the uncertainties relating to the new and evolving market in which
we operate. If the wireless networking market does not develop sufficiently, or
if our products are not sufficiently accepted, our business, financial condition
and operating results will suffer.







                                       17
<PAGE>   18

WE MAY NOT SUCCEED OR MAY LOSE SIGNIFICANT MARKET SHARE AS A RESULT OF THE
INTENSE COMPETITION IN THE WIRELESS LAN MARKET

         The market for our products is very competitive, and we expect that
competition will increase in the future. Increased competition could adversely
affect our revenues and profitability through pricing pressure, loss of market
share and other factors. This market has historically been dominated by
relatively few companies, including Lucent, Proxim and BreezeCom. We believe we
will encounter competition from a number of other companies that develop, or
have announced plans to develop, wireless networking products. We believe that
our success will depend in part on our ability to compete favorably in the
following areas:

-        expertise and familiarity with 2.4 GHz spread spectrum technology,
         wireless data communication protocols and LAN technology;

-        product performance, features, functionality and reliability;

-        price/performance characteristics;

-        timeliness of new product introductions;

-        adoption of emerging industry standards;

-        customer service and support;

-        size and scope of distribution network; and

-        brand name.

         We have also historically faced competitive pressure from companies
that have increased their brand awareness by dedicating significant resources to
marketing and advertising.

         We face the risk that our competitors may introduce faster, more
competitively priced products. Many of our current and potential competitors
have significantly greater financial, marketing, research, technical and other
resources. If we are unable to compete successfully, we could experience price
reductions, reduced operating margins and loss of market share, any of which
could have a material adverse effect on our business and operating results.

OUR SUCCESS DEPENDS ON THE TIMELY DEVELOPMENT OF NEW PRODUCTS

         We derive substantially all of our product revenues from sales of
products for wireless networking solutions. This market is characterized by:

-        intense competition;

-        rapid technological change;

-        short product life cycles; and

-        emerging industry standards.

         We have in the past experienced delays in product development which
resulted in delayed commercial introduction of new products. These kinds of
delays could be repeated and could have an adverse effect on our business. The
development of new wireless LAN products is highly complex. Our success in
developing and introducing new products depends on a number of factors,
including:

-        accurate new product definition;

-        timely completion and introduction of new product designs;

-        achievement of cost efficiencies in design and manufacturing; and

-        market acceptance of the new products.

         We cannot guarantee that we will be successful in these efforts or that
our competitors will not be more successful, which, in either case, would have a
material adverse effect on our business and results of operations.





                                       18
<PAGE>   19



WE RELY ON LIMITED SOURCES OF KEY COMPONENTS AND IF WE ARE UNABLE TO OBTAIN
THESE COMPONENTS WHEN NEEDED, WE WILL NOT BE ABLE TO DELIVER OUR PRODUCTS TO OUR
CUSTOMERS ON TIME

         We rely on Atmel Corporation, M/A-COM, Raytheon Company,
Hewlett-Packard Company, Harris Semiconductor and Sawtek, Inc. as our critical
sole source suppliers. Although we have been informed by some of these suppliers
that they have redundant manufacturing facilities, there is no assurance that
they will be able to manufacture or provide these components in a timely way.
Should any supply disruption occur, we may not be able to develop an alternative
source for these components.

         We have experienced limited delays and shortages in the supply of other
less critical components which have slowed the manufacturing schedule of our
products or caused us to revise or adjust these schedules. We could experience
delays and shortages in the future. We generally do not maintain a significant
inventory of components and do not have long-term supply contracts with our
suppliers. Our reliance on sole or limited source suppliers involves several
risks, including:

-        suppliers could increase component prices significantly, without notice
         and with immediate effect;

-        suppliers could discontinue the manufacture or supply of components or
         delay delivery of components used in our products for reasons such as
         inventory shortages, new product offerings, increased cost of
         materials, destruction of manufacturing facilities, labor disputes and
         bankruptcy; and

-        in order to compensate for potential component shortages or
         discontinuance, we may in the future decide to hold more inventory than
         is immediately required, resulting in increased inventory costs.

         Though we have not in the past experienced any significant delays in
shipping or sales of product due to delays or shortages of components, if our
suppliers were unable to deliver or ration components to us, we could experience
interruptions and delays in product manufacturing, shipping and sales. This
could result in our inability to fulfill customer orders, the cancellation of
orders for our products, substantial delays in our product shipments, increased
manufacturing costs and increased product prices. Further, we might not be able
to develop alternative sources for these components in a timely way, if at all,
and might not be able to modify our products to accommodate alternative
components.

         These factors could damage our relationships with current and
prospective customers lasting longer than any underlying shortage or
discontinuance. Any of these risks, if realized, could materially and adversely
affect our business operating results and financial condition.

A LIMITED NUMBER OF CUSTOMERS ACCOUNT FOR A SIGNIFICANT PORTION OF OUR REVENUES
AND DECREASED DEMAND BY THESE CUSTOMERS WOULD ADVERSELY AFFECT OUR REVENUES

         Historically, a relatively small number of customers, especially
Telxon, have accounted for a significant portion of our total revenues in any
particular period. Two of our customers, Telxon, and Business Partner Solutions,
Inc. each accounted for over 10% of our total revenues for the three months
ended September 30, 1999 and for the six months ended September 30, 1999. For
the three months and six months ended September 30, 1999, Telxon accounted for
31% and 28% of our total revenues respectively. Our four largest customers
accounted for 59% and 54% of our non-affiliate revenues or 41% and 39% of our
total revenues for the same periods. We have no long-term volume purchase
commitments from any of our customers. We anticipate that sales of our products
to relatively few customers will continue to account for a significant portion
of our total revenues, because our customers generally resell our products to
end users. Due to these factors, some of the following may reduce our operating
results:

-        reduction, delay or cancellation of orders from one or more of our
         significant customers;

-        development by one or more of our significant customers of other,
         competitive sources of supply;

-        selection by one or more of our significant customers of equipment
         manufactured by one of our competitors as a preferred solution;


                                     19

<PAGE>   20

-        loss of one or more of our significant customers or a disruption in our
         sales and distribution channels to these customers; or

-        failure of one of our significant customers to make timely payment of
         our invoices.

         We cannot be certain that these significant customers will continue
purchasing levels of previous periods and a decline in these levels for any
reason would negatively affect our revenues.

WE MUST EXPAND OUR DISTRIBUTION CHANNELS IN ORDER TO INCREASE SALES OF OUR
PRODUCTS

         To increase revenues, we believe we must increase the number of our
distribution partners. Our strategy includes an effort to reach a greater number
of end users through indirect channels. We are currently investing, and plan to
continue to invest, significant resources to develop these indirect channels.
This could adversely affect our operating results if we do not generate the
revenues necessary to offset these investments. We will be dependent upon the
acceptance of our products by distributors and their active marketing and sales
efforts relating to our products. The distributors to whom we sell our products
are independent and are not obligated to deal with us exclusively or to purchase
any specified amount of our products. Because we do not generally fulfill orders
by end users of our products sold through distributors, we will be dependent
upon the ability of distributors to accurately forecast demand and maintain
appropriate levels of inventory. If we are unable to expand our distribution
channels, we may not be able to increase sales of our product.

OUR DISTRIBUTORS MAY NOT GIVE PRIORITY TO OUR PRODUCTS WHICH MIGHT RESULT IN
LOWER PRODUCT SALES

         We expect that our distributors will also sell competing products.
These distributors may not continue, or may not give a high priority to,
marketing and supporting our products. This and other channel conflicts could
result in diminished sales through the indirect channel and adversely affect our
operating results. Additionally, because lower prices are typically charged on
sales made through indirect channels, increased indirect sales could adversely
affect our average selling prices and result in lower gross margins.

COMPLIANCE WITH EXISTING AND POTENTIAL INDUSTRY STANDARDS MAY BE DIFFICULT AND
COSTLY

         We have developed and continue to develop our products to comply with
existing industry standards and anticipated future standards. We may not
introduce products that comply with future industry standards on a timely basis.
In particular, we expend, and intend to continue to expend, substantial
resources in developing products and product features that are designed to
conform to the IEEE 802.11 wireless LAN standard, as well as to other industry
standards that have not yet been formally adopted. Further, our high speed 4800
Turbo DS series of products is designed to conform with the proposed high speed
addition to the IEEE 802.11 standard. Our products may fail to meet future
industry standards or the standards ultimately adopted by the industry may vary
from those anticipated by us.

         We participated in the promulgation of the IEEE 802.11 standard through
two of our senior officers who are members of the IEEE 802.11 Standards
Committee. Companies participating in the promulgation of the IEEE 802.11
standard have represented to the IEEE that they will grant licenses to their
patents on a fair and equitable basis if those patents are required to implement
products that comply with the standard. Our ability to market IEEE 802.11
compliant products may depend upon our ability to obtain these licenses from the
other participating companies. Our failure to obtain any required license at a
commercially reasonable cost could have a material adverse effect on our
competitive position and results of operations.





                                       20
<PAGE>   21



EXISTING AND POTENTIAL WIRELESS LAN STANDARDS MAY NOT ACHIEVE MARKET ACCEPTANCE
AND MAY LOWER BARRIERS TO MARKET ENTRY, EITHER OF WHICH WOULD HAVE A NEGATIVE
IMPACT ON OUR BUSINESS

         Because we develop our products to comply with industry standards,
sales of our products could decline if these standards do not gain market
acceptance or if consumers ultimately prefer to purchase products which do not
comply with these standards, or which comply with new or competing standards, or
which are based on proprietary designs. Also, product standardization may have
the effect of lowering barriers to entry in the markets in which we seek to sell
our products, by diminishing product differentiation. This would increase
competition based upon criteria such as the relative size and marketing skills
of competitors and we may not compete favorably.

COMPLIANCE WITH VARYING GOVERNMENT REGULATIONS IN MULTIPLE JURISDICTIONS WHERE
WE SELL PRODUCTS MAY BE DIFFICULT AND COSTLY

         In the United States, our products are subject to various Federal
Communications Commission rules and regulations. Current FCC regulations permit
license-free operation in certain FCC-certified bands in the radio frequency
spectrum. FCC rules require compliance with administrative and technical
requirements as a condition to the operation or marketing of devices that emit
radio frequency energy, such as our products. Our products comply with Part 15
of the current FCC regulations permitting license-free operation of radio
devices in the 902-928 MHz and 2.4-2.4835 GHz radio frequency bands.

The Part 15 regulations are designed to minimize the probability of interference
to the other users of those frequency bands and accord Part 15 systems secondary
status. In order of priority, the primary users of those band widths are the
following:

-        devices which use radio waves to produce heat rather than to
         communicate;

-        governmental uses;

-        vehicle monitoring systems; and

-        amateur radio.

         In the event of interference between a primary user in those band
widths and a Part 15 user, the primary user can require the Part 15 user to
curtail transmissions that create interference. Our products are also subject to
regulatory requirements in markets outside the United States, where we have
limited experience in gaining regulatory approval. The regulatory environment in
which we operate subjects us to several risks, including:

-        if users must cease use of our products because their operation causes
         interference to authorized users of the radio frequency spectrum, or
         authorized users cause interference which must be accepted by users of
         our products, market acceptance of our products and our results of
         operations could be adversely affected;

-        regulatory changes, including changes in the allocation of available
         radio frequency spectrum or requirements for licensed operation, may
         significantly impact our operations by rendering current products
         non-compliant or restricting the applications and markets served by our
         products; and

-        we may not be able to comply with all applicable regulations in each of
         the countries where our products are sold or proposed to be sold, and
         we may need to modify our products to meet local regulations.






                                       21
<PAGE>   22



OUR SUCCESS DEPENDS ON OBTAINING AND PROTECTING INTELLECTUAL PROPERTY

         Our success depends in part on our ability to obtain and preserve
patent and other intellectual property rights covering our products and
development and testing tools. The process of seeking patent protection can be
time consuming and expensive. We cannot assure you that:

-        patents will issue from currently pending or future applications;

-        our existing patents or any new patents will be sufficient in scope to
         provide meaningful protection or any commercial advantage to us;

-        foreign intellectual property laws will protect our intellectual
         property rights; or

-        others will not independently develop similar products, duplicate our
         products or design around any patents issued to us.

         Intellectual property rights are uncertain and involve complex legal
and factual questions. Though we are not aware of any third party intellectual
property rights that would prevent our use and sale of our products, we may
unknowingly infringe the proprietary rights of others. Any infringement could
result in significant liability to us. If we do infringe the proprietary rights
of others, we could be forced to either seek a license to those intellectual
property rights or alter our products so that they no longer infringe those
proprietary rights. A license could be very expensive to obtain or may not be
available at all. Similarly, changing our products or processes to avoid
infringing the rights of others may be costly or impractical.

         We also rely on trade secrets, proprietary know-how and confidentiality
provisions in agreements with employees and consultants to protect our
intellectual property. Other parties may not comply with the terms of their
agreements with us, and we may not be able to adequately enforce our rights
against these parties.

WE COULD BECOME SUBJECT TO LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS
WHICH COULD SERIOUSLY HARM OUR BUSINESS

         Any dispute regarding intellectual property, whether ours or that of
another company, may result in legal proceedings. These types of proceedings may
be costly and time consuming for us, even if we eventually prevail. If we do not
prevail, we might be forced to pay significant damages, the prevailing party's
litigation expenses and obtain a license or stop making the subject product.

IF WE FAIL TO MANAGE OUR GROWTH, OUR BUSINESS, FINANCIAL CONDITION AND PROSPECTS
COULD BE SERIOUSLY HARMED

         We have expanded our operations in recent years, and we anticipate that
further expansion will be required to address potential growth in our customer
base and market opportunities, as well as to provide corporate services
previously provided to us by Telxon. This expansion has placed, and future
expansion is expected to place, a significant strain on our management,
technical, operational, administrative and financial resources. We have recently
hired new employees, including a number of key managerial and operations
personnel, who have not yet been fully integrated into our operations.

         Our current and planned expansion of personnel, systems, procedures and
controls may be inadequate to support our future operations. We may be unable to
attract, retain, motivate and manage required personnel, including finance,
administrative and operations staff, or to successfully identify, manage and
exploit existing and potential market opportunities because of inadequate
staffing. We may also be unable to manage further growth in our multiple
relationships with our OEMs, distributors and other third parties. If we are
unable to manage growth effectively, our business, financial condition and
results of operations could be adversely affected.






                                       22
<PAGE>   23



OUR INTERNATIONAL OPERATIONS MAY BE ADVERSELY AFFECTED BY ADDITIONAL RISKS
UNIQUE TO THOSE MARKETS

         Revenues from customers outside of the United States accounted for
approximately 21% and 24% of our total revenues for the three months ended
September 30, 1999 and six months ended September 30,1999 respectively. We
anticipate that revenues from customers outside of the United States will
continue to account for a significant portion of our total revenues for the
foreseeable future. Expansion of our international operations has required, and
will continue to require, significant management attention and resources. In
addition, we remain heavily dependent on distributors to market, sell and
support our products internationally. Our international operations are subject
to additional risks, including the following:

-        difficulties of staffing and managing foreign operations;

-        longer customer payment cycles and greater difficulties in collecting
         accounts receivable;

-        unexpected changes in regulatory requirements, exchange rates, trading
         policies, tariffs and other barriers;

-        uncertainties of laws and enforcement relating to the protection of
         intellectual property;

-        language barriers;

-        potential adverse tax consequences; and

-        political and economic instability.

         We currently sell products in countries that have recently experienced
significant problems with their economies, the value of their currency,
availability of credit and their ability to engage in foreign trade in general,
including in Russia and Japan. We are unable to determine whether economic
downturns in any particular country will adversely effect our business or
results of operations. We cannot predict the impact that any future fluctuations
in foreign currency exchange rates or the adoption of the Euro, the single
European currency introduced in January 1999, may have on our operating results
and financial condition.

RISKS RELATING TO YEAR 2000 ISSUES MAY ADVERSELY AFFECT OUR BUSINESS

         Many existing computer systems and software products do not properly
recognize dates after December 31, 1999. This "Year 2000" problem could result
in miscalculations, data corruption, system failures or disruptions of
operations. We reasonably expect that at worst these disruptions could result in
our inability to process transactions, manufacture and ship products, send
invoices or engage in similar normal business activities for an indefinite
period of time, which could impair our viability.

         The Year 2000 problem could also affect embedded systems, such as
building security systems, machine controllers, telephone switches and other
equipment. Our systems may suffer from date related problems, and if so, we may
need to upgrade or replace our computer systems, software and other equipment,
which could result in significant expenditures.

         Neither our current products nor our prior products utilize internal
calendars that are dependent upon the input of, or reference to, a specific
date, and we do not anticipate designing any products that are date dependent.
Furthermore, the purchasing patterns of our customers or potential customers may
be affected by Year 2000 issues as companies expend significant resources to
correct their current systems for Year 2000 compliance. These expenditures may
result in reduced funds available for network equipment and other purchases,
which could have a material adverse effect on our business, operating results
and financial condition.

         We rely on numerous third parties who may not be Year 2000 compliant.
This includes our contract manufacturers, our sole and limited source component
suppliers and other vendors, and our distributors, resellers and OEMs. Failure
of any of these third parties to be Year 2000 compliant could require us to
incur significant unanticipated expenses to remedy any resulting problems or to
replace the affected third party. This could reduce our revenues and could have
a material adverse effect on our business, operating results and financial
condition. To date, we have not developed contingency plans for those
eventualities.




                                       23

<PAGE>   24

WE ARE DEPENDENT ON KEY PERSONNEL AND IF WE ARE UNABLE TO HIRE OR RETAIN
NEEDED PERSONNEL, OUR ABILITY TO DO BUSINESS PROFITABLY COULD BE HARMED

         There are a limited number of skilled design, process and testing
engineers and marketing professionals involved in the wireless data
communication industry. The competition for these employees is intense. Skilled
professionals often move among the various competitors in this industry. Our
future growth depends in large part on retaining our current employees and
attracting new technical, marketing and management personnel. The loss of key
employees or failure to attract new key employees could materially affect our
business.

RECENTLY HIRED KEY EMPLOYEES MAY NOT SUCCESSFULLY INTEGRATE INTO OUR MANAGEMENT
TEAM

         We have recently hired a number of our officers, including our Senior
Vice President and Chief Financial Officer in January 1999, and Senior Vice
President, Sales and Marketing in August 1998. These individuals have not
previously worked together and are in the process of integrating as a
management team, together and with existing management. There can be no
assurances that they will be able to effectively work together or successfully
manage any growth we experience.

THERE MAY BE POTENTIAL HEALTH AND SAFETY RISKS RELATED TO OUR PRODUCTS WHICH
COULD NEGATIVELY AFFECT PRODUCT SALES

         There has been public concern regarding the potential health and safety
risks of electromagnetic emissions. Our wireless networking products emit
electromagnetic radiation, but we do not believe that our products pose a safety
concern. If safety or health issues do arise, product sales could decline or
cease. These issues could have a material adverse effect on our business and
results of operations. Even if safety concerns ultimately prove to be without
merit, negative publicity could have a material adverse effect on our ability to
market products.

OUR COMMON STOCK PRICE MAY BE VOLATILE

         The stock market has experienced significant price and volume
fluctuations, and the market prices of technology companies have been highly
volatile. Our stock price may also be volatile.

DELAWARE LAW AND OUR CORPORATE DOCUMENTS INCLUDE ANTI-TAKEOVER PROVISIONS WHICH
MAY LIMIT THE VALUE STOCKHOLDERS CAN REALIZE FROM OUR STOCK

         Our corporate documents and applicable provisions of the Delaware
General Corporation Law could discourage, delay or prevent a third party or
significant stockholder from acquiring or gaining control of us. These
provisions:

-        authorize the issuance of preferred stock with rights senior to those
         of common stock, which our Board of Directors can create and issue
         without prior stockholder approval;

-        prohibit stockholder action by written consent;

-        establish advance notice requirements for submitting nominations for
         election to the Board of Directors and for proposing matters that can
         be acted upon by stockholders at a meeting; and

-        establish staggered terms for members of the Board of Directors.

         In addition, we are a party to a Rights Agreement, pursuant to which
each share of our common stock includes a companion purchase right. Under
circumstances controlled by our Board of Directors, the purchase rights may
impose severe impediments to any person seeking to acquire us or gain control
over us. Any of these anti-takeover provisions could lower the market price of
the common stock and could deprive our stockholders of the opportunity to
receive a premium for their shares in the event that we are sold.



                                       24
<PAGE>   25
THE NUMBER OF OUR SHARES WHICH ARE PUBLICALLY TRADED MAY INCREASE IN THE NEAR
FUTURE

         Over six million of our total outstanding shares are restricted from
immediate resale but may be sold into the market in the near future, which could
cause the market price of our common stock to drop significantly, even if our
business is doing well All of our officers, directors, stockholders, warrant
holders and each holder of more than 5,000 options have executed lock up
agreements in which they agreed not to sell any shares of common stock during
the period ending 180 days after the date of the prospectus in the Registration
Statement. This restriction can be waived by the underwriters at any time
without notice to us, our stockholders or the public in general.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

         We are exposed to the impact of interest rate changes and, to a lesser
extent, foreign currency fluctuations. We are experiencing increases in our
sales into foreign markets of products manufactured in the United States.
Foreign currency fluctuations could effect the price competitiveness and margins
of foreign sales. We have not entered into interest rate or foreign currency
transactions for speculative purposes or otherwise. Our foreign currency
exposures were immaterial at September 30, 1999.

         Our exposure to interest rate changes also results from investment of
funds in excess of current operating requirements. We invest our funds in
short-term, interest-bearing, investment grade securities. Our interest income
is sensitive to changes in the general level of U.S. interest rates. Due to the
nature of our short-term investments, we have concluded that there is no
material market risk exposure. Therefore, no quantitative tabular disclosures
are required.






                                       25
<PAGE>   26



PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         (c) We are furnishing the following information with regard to all
securities sold by us during the period covered by this report that were not
registered under the Securities Act of 1933. We granted options to purchase an
aggregate of 105,000 shares of common stock, at exercise prices ranging from $25
to $30 per share. The sales of these securities were deemed to be exempt from
registration under the Securities Act of 1933 in reliance on Section 4(2) or
Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b)
of the Securities Act of 1933, as transactions by an issuer not involving a
public offering or transactions pursuant to compensatory benefit plans and
contracts relating to compensation as provided under such Rule 701. The
recipients of securities in each such transaction represented their intention to
acquire the securities for investment only and not with a view to, or for sale
in connection with, any distribution thereof, and appropriate legends were
affixed to share certificates and instruments issued in such transactions. All
recipients had adequate access, through their relationships with us, to
information about us.

         (d) We are furnishing the following information with respect to the use
of proceeds from our initial public offering. A Registration Statement on Form
S-1, as amended (Registration No. 333- 78507), was initially filed with the
Securities and Exchange Commission on May 14, 1999, was declared effective on
July 29, 1999 and the offering commenced on July 30, 1999. The managing
underwriters for the offering were Dain Rauscher Wessels, a division of Dain
Rauscher Incorporated, Prudential Securities and CIBC World Markets.

         Of the 6,000,000 shares of common stock, $0.01 par value, offered, we
sold 4,000,000 shares and a selling stockholder sold 2,000,000 shares. In
addition, our underwriters exercised their option to purchase an additional
846,800 shares to cover over-allotments sold by the underwriters in the
Offering, of which we sold 564,562 shares and a selling stockholder sold
282,238. We received no proceeds from the shares sold by the selling
stockholder. Payment of expenses from the proceeds were to persons other than
our directors, officers, general partners or their associates, persons owning
10% or more of our equity securities or affiliates of the Company. The following
table sets forth approximate proceeds and expenses.
<TABLE>
<CAPTION>

<S>                                                                         <C>
Our aggregate public offering price.....................................    $     50,210,182
Selling stockholder's aggregate public offering price...................    $     25,104,618
Our underwriting discounts and commissions..............................    $      3,514,713
Selling stockholder's underwriting discounts and commissions............    $      1,757,323
Our offering expenses...................................................    $      2,336,591
Our aggregate net proceeds..............................................    $     44,358,878
</TABLE>

During the period covered by this report we used approximately $320,000 of the
Offering proceeds for working capital.





                                       26



<PAGE>   27
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                           DESCRIPTION
-------                          -----------
<S>        <C>
2.1***     Agreement and Plan of Merger and Reorganization dated as of November
           8, 1999 by and among Cisco Systems, Inc., a California corporation,
           Osprey Acquisition Corporation, a Delaware corporation, and Aironet
           Wireless Communications, Inc., a Delaware corporation

3.1**      Amended and Restated Certificate of Incorporation of Aironet Wireless
           Communications, Inc.

3.2*       Second Amended and Restated Bylaws of Aironet Wireless
           Communications, Inc.

4.1*       Specimen of certificate for shares of Aironet's common stock

4.2**      Rights Agreement between Aironet Wireless Communications, Inc. and
           Harris Trust and Savings Bank, as Rights Agent, dated as of June 25,
           1999, including form of rights certificate

4.2.1***   Amendment No. 1 to Rights Agreement dated November 8, 1999

4.3*       Warrant certificate issued to Furneaux & Company, LLC

4.4        Registration Rights Agreement by and among Aironet and certain of its
           security holders, dated as of March 31, 1998 included as Exhibit
           10.4.3 to Aironet's Registration Statement on Form S-1, as amended
           (Registration No. 333-78507)

4.5        Stock Option Agreement dated as of November 8, 1999 by and between
           Cisco Systems, Inc. and Aironet Wireless Communications, Inc.
           incorporated by reference to Exhibit 99.1 to Aironet's Current Report
           on Form 8-K filed on November 12, 1999

4.6        Form of Stockholder Agreement dated as of November 8, 1999 by and
           among Cisco Systems, Inc., Osprey Acquisition Corporation and certain
           stockholders of Aironet Wireless Communications, Inc. incorporated by
           reference to Exhibit 99.2 to Aironet's Current Report on Form 8-K
           filed on November 12, 1999

10.1       Aironet's Compensation and Benefits Plans

10.1.1*    Aironet Wireless Communications, Inc. 1996 Stock Option Plan

10.1.2*    Amended and Restated Aironet Wireless Communications, Inc. 1996 Stock
           Option Plan

10.1.3*    First Amendment to Amended and Restated Aironet Wireless
           Communications, Inc. 1996 Stock Option Plan

10.1.4*    Aironet Wireless Communications, Inc. 1999 Employee Stock Purchase
           Plan

10.1.4.1+  First Amendment to the Aironet Wireless Communications, Inc. 1999
           Employee Stock Purchase Plan

10.1.5*    Aironet Wireless Communications, Inc. 1999 Omnibus Stock Incentive
           Plan

10.1.6*    Aironet Wireless Communications, Inc. 1999 Stock Option Plan for
           Non-Employee Directors

10.1.7*    Employment Agreement between Aironet and Roger J. Murphy, Jr.

10.1.8*    Employment Letter Agreement between Aironet and Richard G. Holmes
</TABLE>

                                      27
<PAGE>   28

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>        <C>
10.1.9*    Employment Letter Agreement between Aironet and Ronald B. Willis

10.1.10*   Employment Letter Agreement between Aironet and Harvey A. Ikeman

10.1.11*   Promissory Note made by Roger J. Murphy, Jr. to the order of Aironet
           in the principal amount of $372,000

10.1.11.1* Amendment to Promissory Note, included as Exhibit 10.1.11

10.1.12*   Telxon's Retirement & Uniform Matching Profit Sharing Plan, as
           amended (in which Aironet's employees participate pursuant to the
           Services Agreement included as Exhibit 10.7)

10.1.12.1* Supplemental Participation Agreement and Certificate of Resolution to
           Telxon's Retirement & Uniform Matching Profit Sharing Plan, as
           amended

10.1.13*   Telxon 1995 Employee Stock Purchase Plan

10.1.14+   Change in Control Agreement between Aironet and Roger J. Murphy, Jr.
           dated October 19, 1999

10.1.15+   Change in Control Agreement between Aironet and Richard G. Holmes
           dated October 19, 1999

10.1.16+   Change in Control Agreement between Aironet and Ronald B. Willis
           dated October 19, 1999

10.1.17+   Change in Control Agreement between Aironet and Harvey A. Ikeman
           dated October 19, 1999

10.1.18+   Change in Control Agreement between Aironet and Donald I. Sloan dated
           October 19, 1999

10.2       Material Leases

10.2.1*    Lease between Aironet and Telxon Corporation for 91 Springside Drive,
           Akron, Ohio, dated as of April 1, 1998

10.2.2*    Sublease Agreement between Aironet and Telxon Corporation for 3875
           Embassy Parkway, Bath, Ohio dated as of September 1, 1998

10.2.3*    Lease renewal between Telxon Corporation and Aironet, dated June 16,
           1999, for Lease included as Exhibit 10.2.1 and Sublease included as
           10.2.2

10.3*      Loan Agreement between Aironet and The Huntington National Bank,
           dated as of July 24, 1998

10.3.1**   First Amendment to Loan Agreement dated April 30, 1999 amending the
           Loan Agreement included as Exhibit 10.3

10.4*      Subscription Agreement by and among Aironet and the investors who
           executed the same, dated as of March 31, 1998

10.4.1*    Form of warrant issued pursuant to the Subscription Agreement
           included as Exhibit 10.4

10.4.2*    Stockholders Agreement by and among Aironet and its stockholders
           party thereto, dated as of March 31, 1998, in connection with the
           transactions under the Subscription Agreement included as Exhibit
           10.4

10.4.2.1*  Form of Addendum to Stockholders Agreement included as Exhibit 10.4.2
</TABLE>

                                      28
<PAGE>   29

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>        <C>
10.4.3*    Registration Rights Agreement by and among Aironet and certain of its
           security holders, dated as of March 31, 1998

10.4.3.1*  Form of Addendum to Registration Rights Agreement included as Exhibit
           10.4.3

10.4.3.2*  Addendum by Telantis Venture Partners IV, Inc. to Registration Rights
           Agreement included as Exhibit 10.4.3

10.5*      License, Rights and Supply Agreement between Aironet and Telxon
           Corporation, dated as of March 31, 1998

10.5.1*    First Amendment to License, Rights and Supply Agreement dated as of
           March 31, 1999

10.6*      Tax Benefit and Indemnification Agreement between Aironet and Telxon
           Corporation, dated as of March 31, 1998

10.6.1*    Promissory Note made by Aironet to the order of Telxon Corporation
           with the Tax Benefit and Indemnification Agreement included as
           Exhibit 10.6

10.7*      Services Agreement between Aironet and Telxon Corporation, dated as
           of March 31, 1998

10.8*      Assignment of Patent Applications made by Telxon Corporation in favor
           of Aironet, dated as of March 30, 1998

10.9*      Assignment of Patent Applications made by Aironet in favor of Telxon
           Corporation, dated as of March 30, 1998

10.10*     Cross Covenant Not to Sue between Aironet and Telxon Corporation,
           dated as of March 31, 1998

10.11*     AirAware Acknowledgment between Aironet and Telxon Corporation, dated
           as of March 30, 1998

10.12*     LM3000 Software Agreement between Aironet and Telxon Corporation,
           dated as of March 30, 1998

10.13*     Patent Continuation in Part Agreement between Aironet and Telxon
           Corporation, dated as of March 30, 1998

10.14*     Patent License Agreement between Aironet and Telxon Corporation,
           dated as of March 30, 1998

10.15*     Nondisclosure Agreement between Aironet and Telxon Corporation, dated
           as of March 31, 1998

10.16+     Assignment of Patent Application made by Telxon Corporation in favor
           of Aironet, dated as of August 4, 1999

10.17+     Patent License Agreement between Aironet and Telxon Corporation,
           dated as of August 4, 1999

10.18+     Assignment of Canadian patent made by Telxon Corporation in favor of
           Aironet, dated as of August 4, 1999

10.19+     Assignment of European patent made by Telxon Corporation in favor of
           Aironet, dated as of August 4, 1999
</TABLE>

                                      29
<PAGE>   30
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>       <C>
10.20+     Deed of Assignment of Australian patent made by Telxon Corporation in
           favor of Aironet, dated as of August 4, 1999

10.21+     Deed of Assignment of Israel patent made by Telxon Corporation in
           favor of Aironet, dated as of August 4, 1999

10.22+     Agreement dated as of November 8, 1999 by and among Telxon
           Corporation, Cisco Systems, Inc. and Aironet Wireless Communications,
           Inc.

27+        Financial Data Schedule
</TABLE>



+Filed herewith.

*Incorporated by reference to this exhibit number to Aironet's Registration
Statement on Form S-1, as amended (Registration No. 333-78507) filed on May 14,
1999 and declared effective on July 29, 1999.

**Incorporated by reference to this exhibit number to Aironet's periodic report
on Form 10-Q for the fiscal quarter ended June 30, 1999.

***Incorporated by reference to this exhibit number to Aironet's current report
on Form 8-K filed on November 12, 1999.

(b) We filed no reports on Form 8-K during the quarter ended June 30, 1999.

                                      30


<PAGE>   31

                                   SIGNATURES

         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.

Dated: November 15, 1999       Aironet Wireless Communications, Inc.

                               By  /s/ Richard G. Holmes

                               Richard G. Holmes
                               Senior Vice President and Chief Financial
                               Officer
                               (Principal Financial and Accounting Officer)


                                      31

<PAGE>   32

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>      <C>
2.1***     Agreement and Plan of Merger and Reorganization dated as of November
           8, 1999 by and among Cisco Systems, Inc., a California corporation,
           Osprey Acquisition Corporation, a Delaware corporation, and Aironet
           Wireless Communications, Inc., a Delaware corporation

3.1**      Amended and Restated Certificate of Incorporation of Aironet Wireless
           Communications, Inc.

3.2*       Second Amended and Restated Bylaws of Aironet Wireless
           Communications, Inc.

4.1*       Specimen of certificate for shares of Aironet's common stock

4.2**      Rights Agreement between Aironet Wireless Communications, Inc. and
           Harris Trust and Savings Bank, as Rights Agent, dated as of June 25,
           1999, including form of rights certificate

4.2.1***   Amendment No. 1 to Rights Agreement dated November 8, 1999

4.3*       Warrant certificate issued to Furneaux & Company, LLC

4.4        Registration Rights Agreement by and among Aironet and certain of its
           security holders, dated as of March 31, 1998 included as Exhibit
           10.4.3 to Aironet's Registration Statement on Form S-1, as amended
           (Registration No. 333-78507)

4.5        Stock Option Agreement dated as of November 8, 1999 by and between
           Cisco Systems, Inc. and Aironet Wireless Communications, Inc.
           incorporated by reference to Exhibit 99.1 to Aironet's Current Report
           on Form 8-K filed on November 12, 1999

4.6        Form of Stockholder Agreement dated as of November 8, 1999 by and
           among Cisco Systems, Inc., Osprey Acquisition Corporation and certain
           stockholders of Aironet Wireless Communications, Inc. incorporated by
           reference to Exhibit 99.2 to Aironet's Current Report on Form 8-K
           filed on November 12, 1999

10.1       Aironet's Compensation and Benefits Plans

10.1.1*    Aironet Wireless Communications, Inc. 1996 Stock Option Plan

10.1.2*    Amended and Restated Aironet Wireless Communications, Inc. 1996 Stock
           Option Plan

10.1.3*    First Amendment to Amended and Restated Aironet Wireless
           Communications, Inc. 1996 Stock Option Plan

10.1.4*    Aironet Wireless Communications, Inc. 1999 Employee Stock Purchase
           Plan

10.1.4.1+  First Amendment to the Aironet Wireless Communications, Inc. 1999
           Employee Stock Purchase Plan

10.1.5*    Aironet Wireless Communications, Inc. 1999 Omnibus Stock Incentive
           Plan

10.1.6*    Aironet Wireless Communications, Inc. 1999 Stock Option Plan for
           Non-Employee Directors

10.1.7*    Employment Agreement between Aironet and Roger J. Murphy, Jr.

10.1.8*    Employment Letter Agreement between Aironet and Richard G. Holmes
</TABLE>

<PAGE>   33

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>      <C>
10.1.9*    Employment Letter Agreement between Aironet and Ronald B. Willis

10.1.10*   Employment Letter Agreement between Aironet and Harvey A. Ikeman

10.1.11*   Promissory Note made by Roger J. Murphy, Jr. to the order of Aironet
           in the principal amount of $372,000

10.1.11.1* Amendment to Promissory Note, included as Exhibit 10.1.11

10.1.12*   Telxon's Retirement & Uniform Matching Profit Sharing Plan, as
           amended (in which Aironet's employees participate pursuant to the
           Services Agreement included as Exhibit 10.7)

10.1.12.1* Supplemental Participation Agreement and Certificate of Resolution to
           Telxon's Retirement & Uniform Matching Profit Sharing Plan, as
           amended

10.1.13*   Telxon 1995 Employee Stock Purchase Plan

10.1.14+   Change in Control Agreement between Aironet and Roger J. Murphy, Jr.
           dated October 19, 1999

10.1.15+   Change in Control Agreement between Aironet and Richard G. Holmes
           dated October 19, 1999

10.1.16+   Change in Control Agreement between Aironet and Ronald B. Willis
           dated October 19, 1999

10.1.17+   Change in Control Agreement between Aironet and Harvey A. Ikeman
           dated October 19, 1999

10.1.18+   Change in Control Agreement between Aironet and Donald I. Sloan dated
           October 19, 1999

10.2       Material Leases

10.2.1*    Lease between Aironet and Telxon Corporation for 91 Springside Drive,
           Akron, Ohio, dated as of April 1, 1998

10.2.2*    Sublease Agreement between Aironet and Telxon Corporation for 3875
           Embassy Parkway, Bath, Ohio dated as of September 1, 1998

10.2.3*    Lease renewal between Telxon Corporation and Aironet, dated June 16,
           1999, for Lease included as Exhibit 10.2.1 and Sublease included as
           10.2.2

10.3*      Loan Agreement between Aironet and The Huntington National Bank,
           dated as of July 24, 1998

10.3.1**   First Amendment to Loan Agreement dated April 30, 1999, amending the
           Loan Agreement included as Exhibit 10.3

10.4*      Subscription Agreement by and among Aironet and the investors who
           executed the same, dated as of March 31, 1998

10.4.1*    Form of warrant issued pursuant to the Subscription Agreement
           included as Exhibit 10.4

10.4.2*    Stockholders Agreement by and among Aironet and its stockholders
           party thereto, dated as of March 31, 1998, in connection with the
           transactions under the Subscription Agreement included as Exhibit
           10.4
</TABLE>


<PAGE>   34



<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>      <C>
10.4.2.1*  Form of Addendum to Stockholders Agreement included as Exhibit 10.4.2

10.4.3*    Registration Rights Agreement by and among Aironet and certain of its
           security holders, dated as of March 31, 1998

10.4.3.1*  Form of Addendum to Registration Rights Agreement included as Exhibit
           10.4.3

10.4.3.2*  Addendum by Telantis Venture Partners IV, Inc. to Registration Rights
           Agreement included as Exhibit 10.4.3

10.5*      License, Rights and Supply Agreement between Aironet and Telxon
           Corporation, dated as of March 31, 1998

10.5.1*    First Amendment to License, Rights and Supply Agreement dated as of
           March 31, 1999

10.6*      Tax Benefit and Indemnification Agreement between Aironet and Telxon
           Corporation, dated as of March 31, 1998

10.6.1*    Promissory Note made by Aironet to the order of Telxon Corporation
           with the Tax Benefit and Indemnification Agreement included as
           Exhibit 10.6

10.7*      Services Agreement between Aironet and Telxon Corporation, dated as
           of March 31, 1998

10.8*      Assignment of Patent Applications made by Telxon Corporation in favor
           of Aironet, dated as of March 30, 1998

10.9*      Assignment of Patent Applications made by Aironet in favor of Telxon
           Corporation, dated as of March 30, 1998

10.10*     Cross Covenant Not to Sue between Aironet and Telxon Corporation,
           dated as of March 31, 1998

10.11*     AirAware Acknowledgment between Aironet and Telxon Corporation, dated
           as of March 30, 1998

10.12*     LM3000 Software Agreement between Aironet and Telxon Corporation,
           dated as of March 30, 1998

10.13*     Patent Continuation in Part Agreement between Aironet and Telxon
           Corporation, dated as of March 30, 1998

10.14*     Patent License Agreement between Aironet and Telxon Corporation,
           dated as of March 30, 1998

10.15*     Nondisclosure Agreement between Aironet and Telxon Corporation, dated
           as of March 31, 1998

10.16+     Assignment of Patent Application made by Telxon Corporation in favor
           of Aironet, dated as of August 4, 1999

10.17+     Patent License Agreement between Aironet and Telxon Corporation,
           dated as of August 4, 1999

10.18+     Assignment of Canadian patent made by Telxon Corporation in favor of
           Aironet, dated as of August 4, 1999

10.19+     Assignment of European patent made by Telxon Corporation in favor of
           Aironet, dated as of August 4, 1999
</TABLE>

<PAGE>   35

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                         DESCRIPTION
-------                      ----------------
<S>      <C>
10.20+     Deed of Assignment of Australian patent made by Telxon Corporation in
           favor of Aironet, dated as of August 4, 1999

10.21+     Deed of Assignment of Israel patent made by Telxon Corporation in
           favor of Aironet, dated as of August 4, 1999

10.22+     Agreement dated as of November 8, 1999 by and among Telxon
           Corporation, Cisco Systems, Inc. and Aironet Wireless Communications,
           Inc.

27+        Financial Data Schedule
</TABLE>


+Filed herewith.

*Incorporated by reference to this exhibit number to Aironet's Registration
Statement on Form S-1, as amended (Registration No. 333-78507) filed on May 14,
1999 and declared effective on July 29, 1999.

**Incorporated by reference to this exhibit number to Aironet's periodic report
on Form 10-Q for the fiscal quarter ended June 30, 1999.

***Incorporated by reference to this exhibit number to Aironet's current report
on Form 8-K filed on November 12, 1999.