**UNITED STATES
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 0-22369**

**RAMP NETWORKS, INC.**
(Exact name of Registrant as specified in its charter)

**Delaware
       
            
            
            
            77-0366874**

(State or Other Jurisdiction of Incorporation or Organization)
          
          
(I.R.S. Employer Identification No.)

**3100 De La Cruz BoulevardSanta Clara, CA 95054**(Address of principal executive offices)

**(408) 988-5353**(Registrant's telephone number, including area code)







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 reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [  ]



As of September 30, 1999, there were approximately 21,027,901 shares of the
Registrant's Common Stock outstanding.







**RAMP NETWORKS, INC.
                                    FORM 10-Q
                                     INDEX**

**PART I.  FINANCIAL INFORMATION**

ITEM 1.   Financial Statements (Unaudited):



**RAMP NETWORKS, INC.****CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In thousands,except per share amount)
                                      (Unaudited)**

`September 30,  December 31,
                                                                1999        1998
                                                           ------------  -----------

                          ASSETS
Current Assets:
  Cash and cash equivalents........................            $15,951       $3,764
  Marketable securities............................            $27,264           --
  Accounts receivable, net.........................              3,516          767
  Inventory........................................              3,174        2,151
  Prepaid expenses and other current assets........              1,255          720
                                                           ------------  -----------
   Total current assets............................             51,160        7,402
Property and equipment, net........................              1,336        1,299
Other assets.......................................                406          177
                                                           ------------  -----------
   Total assets....................................            $52,902       $8,878
                                                           ============  ===========

     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
  Current portion of capital lease obligation......                $99          $50
  Current portion of long-term debt................              2,176          262
  Accounts payable.................................              2,169        2,307
  Accrued liabilities..............................              2,851        1,691
                                                           ------------  -----------
   Total current liabilities.......................              7,295        4,310
Capital lease obligations, less
 current portion...................................                204           40
Long-term debt, less current portion...............              4,022          546
                                                           ------------  -----------
   Total liabilities...............................             11,521        4,896
                                                           ------------  -----------

Redeemable convertible preferred stock, no
 par value ........................................                 --       37,346
                                                           ------------  -----------

Stockholders' Equity (deficit):
  Common stock - $.001 par value: 100,000 shares authorized
  Issued and outstanding - 21,028 at September  30, 1999
     and 4,388 shares at December 31, 1998                          21            4
  Paid-in capital.................................              86,192          624
  Deferred stock compensation......................             (1,863)        (104)
  Accumulated deficit..............................            (42,969)     (33,888)
                                                           ------------  -----------
   Total stockholders' equity (deficit)............             41,381      (33,364)
                                                           ------------  -----------

   Total liabilities and stockholders' equity (deficit)..      $52,902       $8,878
                                                           ============  ===========`

See accompanying notes to condensed consolidated financial statements.



**RAMP NETWORKS, INC.****CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share amounts)
                                (unaudited)**

`Three Months Ended  Nine Months Ended
                                              September 30,       September 30,
                                         ------------------- -------------------
                                            1999      1998      1999      1998
                                         --------- --------- --------- ---------
Revenue................................    $5,002    $2,380   $13,418    $6,884
Cost of revenue........................     2,950     1,649     8,333     5,014
                                         --------- --------- --------- ---------
Gross margin...........................     2,052       731     5,085     1,870
                                         --------- --------- --------- ---------

Operating expenses:
  Research and development.............     1,225     1,302     3,568     5,012
  Sales and marketing..................     2,605     2,287     6,877     6,483
  General and administrative...........       803       326     1,983     1,017
  Legal and severance costs............     1,169       --      1,169       --
  Amortization of deferred
     compensation......................       141       --        658       --
                                         --------- --------- --------- ---------
Total operating expenses...............     5,943     3,915    14,255    12,512
                                         --------- --------- --------- ---------
Loss from operations...................    (3,891)   (3,184)   (9,170)  (10,642)
Other income ..........................       271       119       100       491
                                         --------- --------- --------- ---------
Net loss and comprehensive loss........   ($3,620)  ($3,065)  ($9,070) ($10,151)
                                         ========= ========= ========= =========


Basic  net loss per share..............    ($0.17)   ($0.78)   ($0.89)   ($2.68)
                                         ========= ========= ========= =========
Shares used in computing basic
  net loss per share...................    20,910     3,934    10,210     3,788
                                         ========= ========= ========= =========

Pro forma basic net
  loss per share.......................    ($0.17)   ($0.20)   ($0.51)   ($0.65)
                                         ========= ========= ========= =========

Shares used in computing pro forma
  basic net loss per share.............    20,910    15,646    17,802    15,500
                                         ========= ========= ========= =========`

See accompanying notes to condensed consolidated financial statements.



**RAMP NETWORKS, INC.****CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS****(in thousands)
                               (Unaudited)**

`Nine Months Ended
                                                                  September 30,
                                                          ----------------------
                                                              1999        1998
                                                          ----------  ----------
Operating activities:
  Net loss.............................................     ($9,070)   ($10,151)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation.......................................         480         350
    Loss (gain) on disposal of fixed assets............         (15)         25
    Noncash compensation expense.......................         856         135
    Noncash technology acquisition.....................         573         702
    Changes in operating assets and liabilities:
      Accounts receivable..............................      (2,749)       (210)
      Inventory........................................      (1,023)     (1,190)
      Prepaid expenses and other assets................        (535)       (318)
      Accounts payable.................................        (138)        180
      Accrued liabilities..............................       1,160       1,773
                                                          ----------  ----------
        Net cash used in operating activities..........     (10,461)     (8,704)
                                                          ----------  ----------
Investing activities:
  Purchase of property and equipment...................        (549)       (773)
  Proceeds from sale of assets.........................          47        --
  Purchases of investments............................     (27,264)       --
                                                          ----------  ----------
        Net cash used in investing activities..........     (27,766)       (773)
                                                          ----------  ----------
Financing activities:
  Principal payments on capital lease obligations......         (92)        (55)
  Borrowings under long term debt agreements...........       6,305         571
  Repayments of  long term  debt.......................        (610)        (75)
  Net proceeds from issuance of common stock...........      44,811          90
                                                          ----------  ----------
        Net cash provided by  financing
         activities....................................      50,414         531
                                                          ----------  ----------
Net increase (decrease) in cash and cash equivalents...      12,187      (8,946)
Cash and cash equivalents, beginning of period.........       3,764      15,112
                                                          ----------  ----------
Cash and cash equivalents, end of period...............     $15,951      $6,166
                                                          ==========  ==========

 See accompanying notes to condensed consolidated financial statements.



RAMP NETWORKS, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. 

Basis of Presentation
The condensed consolidated financial statements have been prepared by
Ramp Networks, Inc., pursuant to the rules and regulations of the
Securities and Exchange Commission and include the accounts of Ramp
Networks, Inc., and its wholly-owned subsidiary ("Ramp" or collectively
the "Company"). Certain information and footnote disclosures, normally
included in financial statements prepared in accordance with generally
accepted accounting principles, have been condensed or omitted pursuant
to such rules and regulations. In the opinion of the Company, the
unaudited financial statements reflect all adjustments, consisting only
of normal recurring adjustments,  necessary for a fair presentation of
the financial position at September 30, 1999 and the operating results
and cash flows for the three months and nine months ended September 30,
1999 and 1998. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses. Actual results may differ from these
estimates.

The condensed balance sheet at December 31, 1998 has been derived from
audited financial statements as of that date. These financial statements
and notes should be read in conjunction with the Company's audited
consolidated financial statements and notes thereto, included in the
Company's Registration Statement on Form S-1 filed on June 22, 1999 with
the Securities and Exchange Commission.

The results of operations for the three months and nine months ended
September 30, 1999 are not necessarily indicative of the results that may
be expected for the future quarters or the year ending December 31, 1999.

Comprehensive Income (Loss) 

In June 1997, the Financial Accounting Standards Board issued SFAS No.
130,"Reporting Comprehensive Income," which Ramp adopted beginning on
January 1,1998. SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components in a full  set  of
general purpose financial statements. The objective of SFAS No. 130 is to
report a measure of all changes in equity of an enterprise that result
from transactions and other economic events of the period other than
transactions with shareholders ("Comprehensive income"). Comprehensive
income is the total of net income and all other non-owner changes in
equity. For the three months and nine months ended September 30, 1999 and
1998, Ramp's comprehensive loss was equal to net loss.

Net Loss Per Share
Basic net loss per share is computed using the weighted average number of
shares of common stock outstanding. The Company issued 3,853,000 shares
of common stock and converted all of its outstanding preferred stock to
common stock on June 22, 1999, the date of the Company's initial public
offering. Additionally, in July 1999 the Underwriters of the initial
public offering exercised their over-allotment option to purchase 600,000
shares of the Company's common stock. The net loss per share calculations
have been appropriately weighted to reflect these activities.

No diluted loss per share information has been presented in the
accompanying condensed consolidated statements of operations since
potential common shares from conversion of preferred stock, stock options
and warrants are antidilutive. The Company evaluated the requirements of
the Securities and Exchange Commission Staff Accounting Bulletin (SAB)
No. 98 and concluded that there are no nominal issuances of common stock
or potential common stock which would be required to be shown as
outstanding for all periods as outlined in SAB No. 98.

Pro forma basic net loss per share has been calculated assuming the
conversion of preferred stock into an equivalent number of common shares,
as if the shares had converted on the dates of their issuance.

Segment Reporting 
During 1998, Ramp adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." SFAS No. 131 requires a new basis of
determining reportable business segments, i.e., the management approach.
This approach requires that business segment information used by
management to assess performance and manage company resources be the
source for information disclosure. On this basis, Ramp is organized and
operates as one business segment, the design, development, manufacture,
and marketing of multi-user routers designed for small business and home
use.

Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and hedging Activities,"
which requires companies to record derivative financial instruments on
the balance sheet as assets and liabilities, measured at fair value. In
accordance with SFAS No. 137, adoption of SFAS No. 133 has been deferred
to fiscal quarters of all fiscal years beginning after June 15, 2000.
This statement is not expected to have a material impact on the financial
condition or results of operations of the Company.

In December 1998, the AICPA issued SOP 98-9, "Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain Transactions." SOP
98-9 amends SOP 97-2, "Software Revenue Recognition," and SOP 98-4,
"Deferral of the Effective Date of a Provision of SOP 97-2, 'Software
Revenue Recognition," by extending the deferral of the application of
certain provisions of SOP 97-2 amended by SOP 98-4 through fiscal years
beginning on or before March 15, 1999. All other provisions of SOP 98-9
are effective for transactions entered into in fiscal years beginning
after March 15, 1999. This statement is not expected to have a material
impact on the financial condition or results of operations of the
Company.


NOTE 2.     INITIAL PUBLIC OFFERING  
The company completed its initial public offering of 3,853,000 shares of
common stock in June 1999 raising approximately $38.4 million, net of
offering and distribution  costs. Additionally, in July 1999, the
Underwriters exercised their 30 day over-allotment option and purchased
600,000 shares of common stock at the offering price of $11.00 from which
the Company received $6.1 million, net of costs. Ramp Networks, Inc. is
listed on the Nasdaq National Market under the symbol "RAMP".


NOTE 3.     COMMON STOCK
In May 1999, the Company's shareholders approved the following
activities:

1) a three-for-five reverse stock split of the Company's outstanding
shares. All share and per share information included in these condensed
consolidated financial statements have been retroactively adjusted to
reflect this reverse stock split.

2) the re-incorporation of the Company in the State of Delaware. Upon re-
incorporation, the Company had 100,000,000 authorized shares of common
stock, $.001 par value and 5,000,000 shares of undesignated preferred
stock, $.001 par value.

3) the adoption of the Company's 1999 Employee Stock Purchase Plan (the
"Purchase Plan"). A total of 600,000 shares of common stock have been
reserved for issuance under the Purchase Plan.  The Purchase Plan permits
eligible employees to purchase shares of common stock through payroll
deductions at 85% of the fair market value of the common stock, as
defined in the Purchase Plan.

4) the adoption of the Company's 1999 Stock Incentive Plan (the
"Incentive Plan"). A total of 2,400,000 shares of common stock have been
reserved for issuance under the Incentive Plan, plus an annual increase
of 600,000 shares in each of the fiscal years 2000 to 2004.


NOTE 4. LEGAL AND SEVERANCE COSTS

For the three months ended September 30, 1999, the Company recorded a
charge of $1.2 million for legal and severance costs. The charge includes
the settlement of a legal dispute with two prior employees (See "Other
Information - Legal Proceedings"). Additionally, the charge includes the
settlement of a patent dispute, and certain other employee severance
costs. The combined actions will be primarily paid in the form of common
stock and will result in the issuance of 40,982 shares of the Company's
common stock during the three months ending December 31, 1999.



NOTE 5.     INVENTORY

Inventory includes the costs of materials, labor, and manufacturing
overhead and is stated at the lower of cost (first-in, first-out method)
or market. Inventories consisted of the following (in thousands):




                                            September 30,    December 31,
                                               1999             1998
                                            ------------     ------------
   Raw materials...........................       $775             $221
   Finished goods..........................      2,399            1,930
                                            ------------     ------------
                                                $3,174           $2,151
                                            ============     ============




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

Certain statements in this "Management's Discussion and Analysis of
Financial Condition and Results of Operations" are forward-looking
statements that involve risks and uncertainties. Words such as
"anticipates", "expects", "intends", "plans", "believes", "seeks",
"estimates", and similar expressions identify such forward-looking
statements.  The forward-looking statements contained herein are based on
current expectations and entail various risks and uncertainties that
could cause actual results to differ materially from those expressed in
such forward-looking statements. Factors that might cause such a
difference include, among other things, those set forth under "Overview",
"Liquidity and Capital Resources" and "Risk Factors" included in this
section and those appearing elsewhere in this Form 10-Q. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date
hereof. The Company assumes no obligation to update these forward-looking
statements to reflect actual results or changes in factors or assumptions
affecting forward-looking statements.




OVERVIEW
Ramp Networks is a leading provider of easy-to-use, reliable and affordable
shared Internet access solutions for the small office market, which includes
small businesses, remote and branch offices of large corporations, and home
offices. Our WebRamp product family allows multiple users in a small office to
share the same Internet connection simultaneously while optimizing each user's
access speed. Our WebRamp product family is a flexible and scalable platform
that provides software-based routing and bridging functionality to deliver
Internet-enabled applications and services. Our products support existing
analog phone lines, as well as ISDN and emerging access technologies such as
DSL and cable modems. Our Connection Optimized Link Technology enables multiple
users to access the Internet simultaneously through regular phone lines and
analog modems at up to three times the access speed of a single analog
connection.

We were incorporated in California in February 1994 and reincorporated in
Delaware in June 1999. Our wholly-owned subsidiary, Ramp Networks Private
Limited, is incorporated in India and performs research and development for
us. From our inception in February 1994 through early 1995, we were
focused on developing products for the asynchronous transfer mode market.
We subsequently licensed this technology to a related party and focused on the small
office market for shared Internet access solutions. From early 1995 through May
1996 our operating activities were related primarily to developing, prototyping and
testing our first WebRamp product, staffing our administrative, sales and
marketing and operations organizations and establishing relationships  with
Value Added Resellers (VAR's), Internet Service Providers (ISP's) and
mail order catalogs for the distribution of our products. In June 1996,
we commenced shipments of our first ISDN-based WebRamp product. Since
February 1997, we have introduced new products on a regular basis.

Our revenue is derived primarily from the sale of our WebRamp family of
products. We market and sell our products via a two-tier distribution system
primarily to distributors, such as Ingram Micro and Tech Data (in North
America), who then resell our products to VAR's, selected retail outlets,
mail order catalogs and ISP's. These VAR's then sell our products to end-
users. In 1998, sales to Ingram Micro accounted for 26% of our revenue
and sales to Tech Data accounted for 24% of our revenue. For the nine
months ended September 30, 1999 sales to Ingram Micro accounted for 30%
of our revenue and sales to Tech Data accounted for 20% of our revenue.
The level of sales to any customer may vary from quarter to quarter.
However, we expect that sales to Ingram Micro and Tech Data will continue
to represent a significant portion of our revenue. Additionally, we also
sell our products to Original Equipment Manufacturers (OEM).

Geographically, the Company's revenue percentage has been concentrated
approximately as follows:



                                                     Nine months ended
                                            September 30,    September 30
                                               1999             1998
                                            ------------     ------------
   North America...........................         78%              78%
   Europe.........................                   9%               9%
   Pacific Rim..........................            13%              13%
                                            ------------     ------------
   Total..........................                 100%             100%
                                            ============     ============




The Company's international sales currently are U.S. dollar-denominated.
As a result, an increase in the value of the U.S. dollar relative to
foreign currencies could make our products less competitive in
international markets. In the future, we may elect to invoice some of our
international customers in local currency. Doing so will expose us to
losses due to fluctuations in exchange rates between the U.S. dollar and
the particular local currency. We may choose to limit any currency
exposure through the purchase of forward foreign exchange contracts or
other hedging strategies, but such strategies may not be successful in
avoiding exchange-related losses. See "Risk Factors . If We Are Not
Successful in Expanding Our Business in International Markets, Our Growth
Will Suffer".   Because we currently denominate sales in U.S. dollars, we
do not anticipate that the adoption of the Euro as a functional legal
currency of certain European countries will materially affect our
business.

Revenue is recognized upon transfer of title and risks of ownership, which
generally occurs upon product shipment. Certain agreements with distributors
and retailers provide for rights of return, co-op advertising, price protection
and stock rotation rights. We provide an allowance for returns and price
adjustments and provide a warranty reserve at the point of revenue recognition
Reserves are adjusted periodically based upon historical experience and
anticipated future returns, price adjustments and warranty costs.

We generally expect to experience price pressure due to the impact
of competition, although, the Company's average selling price has
increased as we have introduced products at higher prices,
reflecting added technology and features in the ISDN , DSL and fax
over the Internet product categories. In addition, OEM unit
pricing is generally lower than distribution pricing. Pricing in
the OEM market depends on the specific features and functional
content of the products sold, the degree of integration with the
OEM's products, purchase volumes and the level of sales and
service support.

The Company uses "turn-key" suppliers for the purchase, assembly and
packaging of all products sold that require hardware components. From
time to time the Company has made strategic purchases of material
components from vendors to ensure supply of critical components for its
products. A significant portion of the critical components used in the
Company's products are multi-source to ensure adequate supply to our
turn-key vendors.

Our cost of revenue has declined as a percentage of revenue since we
first began shipping products. The initial higher cost of revenue
included higher component and manufacturing costs associated with lower
initial production volumes, as well as overhead costs which were applied
to a lower number of units produced. As volumes have increased, our cost
of revenue has declined as a percentage of revenue as a result of lower
costs in components, manufacturing and overhead on a per-unit basis. Our
gross margins are affected by fluctuations in manufacturing volumes and
component costs, the mix of products sold and the mix of distribution
channels through which our products are sold. Unless we manage each of
these factors effectively, our gross margins will decrease. Historically,
our gross margins have improved year over year, but we cannot assure you
that we will maintain or increase our gross margins.

Research and development expenses consist primarily of salaries and related
personnel expenses, fees paid to consultants and outside service providers
and prototyping expenses related to the design, development and testing of our
products. Sales and marketing expenses consist primarily of salaries,
commissions and related expenses for personnel engaged in marketing, sales and
support functions, as well as costs associated with promotional and other
sales activities. General and administrative expenses consist primarily of
salaries and related expenses for executive, finance and human resources
personnel, professional fees, and other corporate expenses. We expect expenses
relating to research and development, sales and marketing, general and
administrative and operations to increase in absolute dollars. However, the
percentage of revenue that each of these categories represents will vary
depending on the rate of our revenue growth and investments that may be
required to support the development of new products and our penetration of new
markets.

Since our inception, we have incurred significant losses and, as of September 30,
1999, we had an accumulated deficit of $43.0 million. These losses have
resulted primarily from our activities to develop our products, establish
brand recognition and to develop our distribution channels.

As of December 31, 1998, we had operating loss carry-forwards of $29.2
million for federal purposes and $11.3 million for state purposes. The federal
and state net operating loss carry-forwards expire on various dates through
2018. We have provided a full valuation allowance against our deferred tax
assets, consisting primarily of net operating loss carry-forwards, because of
the uncertainty regarding their realization. Further, these net operating loss
carry-forwards could be subject to limitations due to changes in our
ownership resulting from equity financing.


Results of Operations
The following table sets forth certain financial data for the periods
indicated as a percentage of revenue.


                                           Three Months Ended  Nine Months Ended
                                              September 30,       September 30,
                                         ------------------- -------------------
                                            1999      1998      1999      1998
                                         --------- --------- --------- ---------

Revenue................................       100%      100%      100%      100%
Cost of revenue........................        59%       69%       62%       73%
                                         --------- --------- --------- ---------
Gross margin...........................        41%       31%       38%       27%
                                         --------- --------- --------- ---------

Operating expenses:
  Research and development.............        25%       55%       27%       73%
  Sales and marketing..................        52%       96%       51%       94%
  General and administrative...........        16%       14%       15%       15%
  Legal and severance costs............        23%        0%        9%        0%
  Amortization of deferred
     compensation......................         3%        0%        5%        0%
                                         --------- --------- --------- ---------
Total operating expenses...............       119%      165%      106%      182%
                                         --------- --------- --------- ---------
Loss from operations...................       -78%     -134%      -68%     -155%
Other income ..........................         6%        5%        1%        7%
                                         --------- --------- --------- ---------
Net loss ..............................       -72%     -129%      -68%     -148%
                                         ========= ========= ========= =========



Three Months Ended September 30, 1999 and 1998

Revenue.   Revenue increased 110% to $5.0 million in the three months
ended September 30, 1999 from $2.4 million in the three months ended
September 30, 1998. The increase was primarily due to increased sales of
the Company's WebRamp 200 and 300 series of analog products as well as
sales of the new ISDN WebRamp 410i product and the WebRamp 700 series for
security. Revenue growth was reported in all geographic regions, with
particular strength in North America.

Gross margin.   The company's total gross margin increased from $0.7
million, or 31% of revenue, for the three months ended September 30, 1998
to $2.1 million, or 41% of revenue, for the three months ended September
30, 1999. The increase in gross margin resulted primarily from higher
unit volumes, reductions in component costs and a shift in product mix to
new products with higher gross margins.

Research and development expenses.   Research and development expenses
decreased from $1.3 million, or 55% of revenue, for the three months
ended September 30, 1998 to $1.2 million, or 25% of revenue, for the
three months ended September 30, 1999. The decrease reflected the
completion of certain key research projects in 1998. The Company expects
research and development expenditures to increase in the future as we
continue to invest in new technologies including DSL and voice-over-
internet architectures.

Sales and marketing expenses.   Sales and marketing expenses increased
from $2.3 million, or 96% of revenue, for the three months ended
September 30, 1998 to $2.6 million, or 52% of revenue, for the three
months ended September 30, 1999. Sales and marketing expenses for the
three months ended September 30, 1999 reflect increased marketing
activity in the U.S. as well as increased costs associated with the
Company's increased presence in Europe. The Company intends to continue
to pursue selling and marketing activities aggressively and, therefore,
expects these costs to increase in absolute dollars in the future.

General and administrative expenses.   General and administrative
expenses increased   from $0.3 million, or 14% of revenue, for the three
months ended September 30, 1998 to $0.8 million, or 16% of revenue, for
the three months ended September 30, 1999. General and administrative
expenses increased primarily due to the addition of certain finance and
administrative personnel, including a Chief Financial Officer.
Additionally, the Company incurred costs for recruiting, reflecting its
active hiring program.

Legal and severance costs. For the three months ended September 30, 1999
the Company recorded a charge of $1.2 million for legal and severance
costs. The charge includes the settlement of a legal dispute with two
prior employees (See "Other Information . Legal Proceedings") as well as
the settlement of a patent dispute and severance costs for a former
employee. The combined actions will be primarily paid in the form of
common stock and will result in the issuance of 40,982 shares of the
Company's common stock during the three months ended December 31, 1999.

Amortization of deferred compensation.   Amortization of deferred
compensation was $0.1 million for the three months ended September 30,
1999. This amortization is associated with recorded deferred compensation
of $2.5 million related to stock options  granted in the year ended
December 31, 1998 and during the three months ended March 31, 1999 at
less than their deemed fair market value . The Company amortizes the
deferred compensation over the vesting periods of the applicable options.
There was no amortization of deferred compensation in the three months
ended September 30, 1998.


Nine months Ended September 30, 1999 and 1998

Revenue.   Revenue increased 95% to $13.4 million in the nine months
ended September 30, 1999 from $6.9 million in the nine months ended
September 30, 1998.  The increase was primarily due to increased sales
of the Company's WebRamp 200 and 300 series of analog products as well as
sales of the new ISDN WebRamp 410i product and the WebRamp 700 series for
security. Revenue growth was reported in all geographic regions, with
particular strength in North America.

Gross margin.   The Company's total gross margin increased from $1.9
million, or 27% of revenue, for the nine months ended September 30, 1998
to $5.1 million, or 38.0% of revenue, for the nine months ended September
30, 1999. The increase in gross margin resulted primarily from higher
unit volumes, reductions in component costs and a shift in product mix to
new products with higher gross margins.

Research and development expenses.   Research and development  expenses
decreased from $5.0 million, or 73% of revenue, for the nine months ended
September 30, 1998 to $3.6 million, or 27% of revenue, for the nine
months  ended  September 30,  1999. The decrease is primarily due to
$969,000 in charges recorded in the nine months ended September 30, 1998
related to the acquisition of certain technology for sending faxes over
the Internet which had not yet achieved technological feasibility.
Excluding this charge, research and development expenses were slightly
lower in the nine months ended September 30, 1999 due to the completion
of certain key research projects in 1998. The Company expects research
and development expenditures to increase in the future as we continue to
invest in new technologies including DSL and voice-over-internet
architectures.

Sales and marketing expenses.   Sales and marketing expenses increased
from $6.5 million, or 94% of revenue, for the nine months ended September
30, 1998 to $6.9 million, or 51% of revenue, for the nine months ended
September 30, 1999. Sales and marketing expenses for the nine months
ended September 30, 1999 reflect increased marketing activity in the U.S.
as well as increased costs associated with the Company's increased
presence in Europe. The Company intends to continue to pursue selling and
marketing activities aggressively and, therefore, expects these costs to
increase in absolute dollars in the future.

General  and  administrative expenses.  General  and  administrative
expenses increased  from $1.0 million, or 15% of revenue, for the nine
months ended September 30, 1998 to $2.0 million, or 15% of revenue, for
the nine months ended September 30, 1999. General and administrative
expenses increased primarily due to the addition of certain finance and
administrative personnel, including a Chief Financial Officer.
Additionally, the Company incurred costs for recruiting reflecting its
active hiring program.

Legal and severance costs. For the nine months ended September 30, 1999
the Company recorded a charge of $1.2 million for legal and severance
costs. The charge includes the settlement of a legal dispute with two
former employees (See "Other Information . Legal Proceedings") as well as
the settlement of a patent dispute, and, severance costs for a former
employee. The combined actions will be primarily paid in the form of
common stock and will result in the issuance of 40,982 shares of the
Company's common stock during the three months ended December 31, 1999.

Amortization of deferred compensation.   Amortization of deferred
compensation was $0.7 million for the nine months ended September 30,
1999. This amortization is associated with recorded deferred compensation
of $2.5 million related to stock options  granted in the year ended
December 31, 1998 and during the three months ended March 31, 1999 at
less than their deemed fair market value. The Company amortizes the
deferred compensation over the vesting periods of the applicable options.
There was no amortization of deferred compensation in the three months
ended September 30, 1998.


LIQUIDITY AND CAPITAL RESOURCES 

Our principal sources of liquidity as of September 30, 1999 consisted of
$43.2 million in cash equivalents and marketable securities, a $1.0
million fixed asset lease line, a working capital credit facility with a
borrowing limit of up to the lower of $5.0 million or 100% of eligible
accounts receivable and 50% of inventory and a $3.0 million bridge loan
facility. As of September 30, 1999, we had utilized $1.0 million under
the fixed asset lease line. Borrowings under the fixed asset lease line
bear interest at 7%, are payable ratably over a 36 month term, are
subject to a 15% termination payment and are secured by the fixed assets
that are leased under the line. As of September 30, 1999, we had borrowed
$3.0 million under the working capital credit facility. Borrowings under
this facility bear interest at 8.4%, are payable ratably over a 36 month
term, are subject to a termination payment of 12.5% and are secured by
our receivables and inventory. Also as of September 30, 1999, we had
borrowed $3.0 million under our bridge loan facility. Borrowings under
this facility bear interest at 14.6% and are payable ratably over a 36
month term. Certain of these debt agreements contain provisions that
limit the payment of cash dividends.

Since inception, we have financed our operations primarily through the
sale of redeemable convertible preferred stock, for aggregate proceeds of
approximately $35.9 million, capital equipment lease lines and working
capital lines of credit. Additionally, on June 22, 1999, the Company
raised $38.4 million, in its initial public offering of common stock and
an additional $6.1 million in July 1999.

Net cash used in operating activities was $10.5 million and $8.7 million
in the nine months ended September 30, 1999 and 1998, respectively. The
cash utilized in both periods was attributable primarily to net losses
and working capital required to fund the Company's growth in operations,
including inventory and accounts receivable.

Cash used in investing activities was $27.7 million and $0.8 million in
the nine months ended September 30, 1999 and 1998, respectively,
consisting primarily of purchases of marketable securities as well as
property and equipment. The Company has planned capital commitments of up
to approximately $1.0 million for fiscal 1999.

Net cash provided by financing activities was $50.4 million and $0.5
million in the nine months ended September 30, 1999 and 1998,
respectively. The primary sources of cash generation from financing
activities were proceeds of $44.5 million from the Company's initial
public offering of common stock and $6.3 million in borrowings under debt
agreements.

The Company believes that its current cash equivalents and marketable
securities will be sufficient to meet its anticipated cash needs for
working capital and capital expenditures for at least the next 12 months.
See "Risk Factors - We expect to Continue to Experience Negative Cash
Flow From Operations and Maybe Unable to Meet Our Future Capital
Requirements Through the Issuance of Additional Securities".



YEAR 2000 READINESS DISCLOSURE 

Many computers, software, and other equipment include computer code in
which calendar year data is abbreviated to only two digits. As a result
of this design decision, some of these systems could fail to operate or
fail to produce correct results if "00" is interpreted to mean 1900,
rather than 2000. These problems are widely expected to increase in
frequency and severity as the year 2000 approaches, and are commonly
referred to as the "year 2000 problem."

Assessment. The year 2000 problem affects the computers, software and
other equipment that we use, operate or maintain for our operations.
Accordingly, we have organized a program team responsible for monitoring
the assessment and remediation status of our year 2000 projects and
reporting such status to our board of directors. This project team is
currently assessing the potential effect and costs of remediating the
year 2000 problem for our internal systems. To date, we have not obtained
verification or validation of our processes from any independent third
parties to assess and correct any of our year 2000 problems or the costs
associated with these activities.

Internal infrastructure. We have identified approximately 120 personal
computers and servers, 10 software applications, and our enterprise
resource planning system and related equipment used in connection with
our internal operations that we believe  will need to be evaluated to
determine if they must be modified, upgraded or replaced to minimize the
possibility of a material disruption to our business. We have
substantially completed such evaluation and have commenced the process of
modifying, upgrading and replacing major systems that have been assessed
as adversely affected, and expect to complete this process before the
occurrence of any material disruption of our business.

Systems other than information technology systems. In addition to
computers and related systems, the operation of office and facilities
equipment, such as fax machines, telephone switches, security systems,
and other common devices, of which there are approximately 10, may be
affected by the year 2000 problem. We are currently assessing the
potential effect and costs of remediating the year 2000 problem on our
office equipment and our facilities in Santa Clara, California and
Hyderabad, India.

Products. We have tested and intend to continue to test all of our
products for year 2000 problems. To date, we have been able to correct
any problems with our products relating to the year 2000 problem prior to
releasing them to our customers. We currently do not expect any
significant year 2000 problems to arise with our products. However, we
have represented to our resellers and OEMs that our products are year
2000 compliant, and if that turns out to be untrue these parties may make
claims against us which may result in litigation or contract
terminations.

We estimate the total cost to us of completing any required
modifications, upgrades or replacements of our internal systems will not
exceed $100,000, almost all of which we believe will be incurred during
calendar 1999. Based on the activities described above, we do not believe
that the year 2000 problem will have a material adverse effect on our
business or operating results. In addition, we have not deferred any
material information technology projects as a result of our year 2000
problem activities.


Suppliers. We are checking the Web sites of third-party suppliers of
components used in the manufacture of our products to determine if these
suppliers are certifying that the components they provide us are year
2000 compliant. To date, we believe all critical components that we
obtain from third party suppliers are year 2000 compliant. We expect that
we will be able to resolve any significant year 2000 problems with third-
party suppliers of components; however, we cannot assure you that these
suppliers will resolve any or all year 2000 problems before the
occurrence of a material disruption to the operation of our business. Any
failure of these third parties to timely resolve year 2000 problems with
their systems could harm our business.

Most likely consequences of year 2000 problems. We expect to identify and
resolve all year 2000 problems that could 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 that could be affected and
the interactions among these devices are too numerous. In addition, it is
difficult to predict how many year 2000 problem-related failures will
occur or the severity, duration or financial consequences of these
failures. As a result, we believe that the following consequences are
possible:

. a significant number of operational inconveniences and inefficiencies
for us, our contract manufacturers and our customers that will divert
management's time and attention and financial and human resources from
ordinary business activities;
. business disputes and claims for pricing adjustments or penalties due
to year 2000 problems by our customers, resellers and OEMs; and

. a number of business disputes alleging that we failed to comply with
the terms of contracts or industry standards of performance, some of
which could result in litigation or contract termination.

Contingency plans. We are currently developing contingency plans to be
implemented if our efforts to identify and correct year 2000 problems
affecting our internal systems are not effective. We expect to complete
our contingency plans by the end of November 1999. 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;

. increased work hours for our personnel; and

. use of contract personnel to correct, on an accelerated schedule, any
year 2000 problems that arise or to provide manual workarounds for
information systems.

Our implementation of any of these contingency plans could adversely
affect our business.

Disclaimer. The discussion of our efforts and expectations relating to
year 2000 compliance contains forward-looking statements. Our ability to
achieve year 2000 compliance and the level of incremental costs
associated therewith, could be adversely affected by, among other things,
availability and cost of programming and testing resources, third party
suppliers' ability to modify proprietary software, and unanticipated
problems identified in the ongoing compliance review.


ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK 

Our interest income is sensitive to changes in the general level of U.S.
interest rates, particularly since the majority of our investments are in
short-term instruments. Due to the nature of our short-term investments,
we have concluded that there is no material interest rate risk exposure
and no quantitative tabular disclosures are required.

RISK FACTORS

We Have a Limited Operating History and Consequently Our Future Prospects 
are Difficult to Evaluate

We were incorporated in February 1994 and began shipping our products
commercially in April 1996. We have only been shipping products in volume
since the second quarter of 1997. Because of our limited operating
history and the uncertain nature of the rapidly changing markets which we
serve, we believe the prediction of future results of operations is
difficult or impossible. Furthermore, our prospects must be evaluated in
light of the risks, uncertainties, expenses and difficulties frequently
encountered by companies in the early stage of their development. We may
not be successful in addressing these risks and our business strategy may
not be successful.

We Have a History of Losses, We Expect Future Losses and We Cannot Assure 
You That We Will Achieve or Maintain Profitability 

We have incurred losses since we commenced operations in February 1994.
We incurred net losses of $6.3 million in 1996, $11.5 million in 1997,
$13.4 million in 1998 and $9.1 million for the nine months ended
September 30, 1999. As of September 30, 1999, we had an accumulated
deficit of $43.0 million. We have not achieved profitability and although
our revenue has grown in recent quarters, we cannot be certain that we
will realize sufficient revenue to achieve profitability. Even if we do
achieve profitability, we cannot assure you that we can sustain or
increase profitability on a quarterly or annual basis in the future. We
may not generate a sufficient level of revenue to offset these
expenditures or be able to adjust spending in a timely manner to respond
to any unanticipated decline in revenue. If revenue grows slower than we
anticipate, if gross margins do not improve or if operating expenditures
exceed our expectations or cannot be adjusted accordingly, we may
continue to experience significant losses on a quarterly and annual
basis.

We Expect to Continue to Experience Negative Cash Flow From Operations 
and May Be Unable to Meet Our Future Capital Requirements Through the 
Issuance of Additional Securities

Since inception, we have experienced negative cash flow from operations
and we expect to continue to experience negative cash flow from
operations for the foreseeable future. Therefore, we have relied
primarily on issuances of equity securities to fund our operations to
date. Although we currently anticipate that our existing cash balances
and available lines will be sufficient to meet our anticipated needs for
working capital and capital expenditures through at least the next 12
months, we may need to raise additional funds prior to the expiration of
such period. In particular, we may need to raise additional funds if our
estimates of revenue, working capital and/or capital expenditure
requirements change or prove inaccurate, or in order for us to respond to
unforseen technological or marketing hurdles or to take advantage of
unanticipated opportunities. We cannot be certain that additional
financing, through the issuance of equity securities or otherwise, will
be available to us on favorable terms when required, or at all. If
adequate funds are not available, or are not available on acceptable
terms, we may not be able to take advantage of market opportunities,
develop new products or otherwise respond to competitive pressures which
could adversely affect our ability to achieve and sustain positive cash
flow and profitability in the future.


Our Financial Results from Period to Period May Fluctuate as a Result of 
Several Factors, Any of Which Could Adversely Affect Our Stock Price 

We believe that period to period comparisons of our operating results are
not a good indication of our future performance. It is possible that in
some future periods our operating results may be below the expectations
of public market analysts and investors. In this event, the price of our
common stock may fall. Our revenue and operating results may vary
significantly from period to period due to a number of factors, many of
which are not in our control. These factors include:

. continued market acceptance of our products;

. fluctuations in demand for our products and services;

. variations in the timing of orders and shipments of our products;

. the timing of new product and service introductions by us or our
competitors;

. the mix of products sold and the mix of distribution channels
through which  they are sold;

. our ability to obtain sufficient supplies of sole or limited
sourced components for our products;

. unfavorable changes in the prices of the components we purchase;

. our ability to achieve required cost reductions;

. our ability to attain and maintain production volumes and quality
levels for our products; and

. our ability to integrate new technologies we develop or acquire
into our products.

The amount and timing of our operating expenses generally will vary from
quarter to quarter depending on the level of actual and anticipated
business activities. Research and development expenses will vary as we
develop new products. General and administrative expense fluctuations in
past periods have been due primarily to the level of sales and marketing
expenses associated with new product introductions. In the past, we have
experienced fluctuations in operating results. We have experienced
sharply increased revenue in periods that involved new product
introductions and significant sales to OEMs, with equally sharp decreases
in revenue in subsequent periods as distributors and OEMs complete their
inventory build-up process. Revenue increased from $1.5 million in the
third quarter of 1997 to $2.9 million in the fourth quarter of 1997 and
decreased to $1.9 million in the second quarter of 1998. This fluctuation
in revenue was primarily due to fluctuations in sales to Compaq, which
peaked at 45% of revenue in the fourth quarter of 1997 and declined to 2%
of revenue in the second quarter of 1998. Research and development
expense was $2.2 million in the first quarter of 1998 primarily due to
$969,000 in costs related to the acquisition of technology for sending
faxes over the Internet. Furthermore, we have a limited backlog of
orders, and revenue for any future quarter is difficult to predict.
Supply, manufacturing or testing constraints could result in delays in
the delivery of our products. Any delay in the product deployment
schedule of one or more of our new products would likely adversely affect
our operating results for a particular period.

We cannot assure you that we will be able to sustain or improve our gross
margins in the future, or that we will be able to offset future price
declines with cost reductions. As a result, we may experience substantial
period to period fluctuations in future operating results and declines in
gross margins. A variety of factors affect our gross margins, including
the following:

. the type of distribution channel through which we sell our
products;

. the volume of products manufactured;

. our product sales mix;

. the average selling prices of our products; and

. the effectiveness of our cost reduction efforts.

We also anticipate that orders for our products may vary significantly
from period to period. As a result, operating expenditures and inventory
levels in any given period could be disproportionately high. In some
circumstances, customers may delay purchasing our current products in
favor of next-generation products, which could affect our operating
results in any given period.

We May Experience Significant Variability in Our Quarterly Revenue Due to 
Our Reliance on Indirect Sales Channels and the Variability of Our Sales 
Cycles 

The timing of our revenue is difficult to predict because of our reliance
on indirect sales channels and the length and variability of our sales
cycle. The length of our sales cycle may vary substantially from customer
to customer depending upon the size of the order and the distribution
channel through which our products are sold. Sales from our distributors
to our VARs typically take one month to complete. Sales to our larger
end-user accounts, who buy larger quantities of our products for
distribution to their multiple offices, typically take two to three
months to complete and it typically takes nine months or more to
establish volume sales contracts with our OEMs. Furthermore, the purchase
of our products by end-users often represents a significant and strategic
decision regarding their communications infrastructures and typically
involves significant internal procedures associated with the evaluation,
testing, implementation and acceptance of new technologies. This
evaluation process frequently results in a lengthy sales process which is
often subject to significant delays as a result of our customers'
budgetary constraints and internal acceptance reviews. If orders
forecasted for a specific customer in a particular quarter do not occur
in that quarter, our operating results for that quarter could be
adversely affected.

While we defer revenue on sales to certain distributors if we determine
that their inventory exceeds normal stocking levels, we are dependent on
timely and accurate inventory information from our distributors to make
such determination. If such information is not timely or accurate, we
could experience increased levels of sales returns or unforecasted
fluctuations in future revenue.

If a Distributor or OEM Cancels or Delays a Large Purchase, Our Revenue 
May Decline and the Price of Our Stock May Fall 

To date, a limited number of distributors and OEMs have accounted for a
significant portion of our revenue. If any of our major distributors or
OEMs stops or delays its purchase of our products, our revenue and
profitability would be adversely affected. We anticipate that sales of
our products to relatively few customers will continue to account for a
significant portion of our revenue. In 1998, sales to Ingram Micro
accounted for 26% of our revenue and sales to Tech Data accounted for 24%
of our revenue. We cannot assure you that our current customers will
continue to place orders with us, that orders by existing customers will
continue at the levels of previous periods or that we will be able to
obtain orders from new customers.

Because our expense levels are based on our expectations as to future
revenue and to a large extent are fixed in the short term, a substantial
reduction or delay in sales of our products, unexpected returns from
resellers or the loss of any significant distributor, reseller or OEM
could adversely affect our operating results and financial condition.
Although our financial performance depends on large orders from a few key
distributors, resellers and OEMs, we do not have binding commitments from
any of them. For example:

. our distributors, resellers and OEMs can stop purchasing or
marketing our products at any time;

. our reseller agreements generally are not exclusive and are for
one year terms, with no obligation of the resellers to renew
their agreements with us;

. our reseller agreements provide for discounts based on expected
or actual volumes of products purchased or resold in a given
period;

. our reseller and OEM agreements generally do not require minimum
purchases; and . our customers may, under certain circumstances,
return products to us.

If We Fail To Develop and Expand Our Indirect Distribution Channels, Our 
Business Could Suffer 

Our product distribution strategy focuses primarily on continuing to
develop and expand our indirect distribution channels through
distributors, resellers and OEMs, as well as expanding our field sales
organization. If we fail to develop and cultivate relationships with
significant resellers, or if these resellers are not successful in their
sales efforts, our product sales may decrease and our operating results
may suffer. Many of our resellers also sell products that compete with
our products. In addition, our operating results will likely fluctuate
significantly depending on the timing and amount of orders from our
resellers. We cannot assure you that our resellers will market our
products effectively or continue to devote the resources necessary to
provide us with effective sales, marketing and technical support.

In order to support and develop leads for our indirect distribution
channels, we plan to significantly expand our field sales and support
staff. We cannot assure you that this internal expansion will be
successfully completed, that the cost of this expansion will not exceed
the revenue generated or that our expanded sales and support staff will
be able to compete successfully against the significantly more extensive
and well-funded sales and marketing operations of many of our current or
potential competitors. Our inability to effectively establish our
distribution channels or manage the expansion of our sales and support
staff would adversely affect our ability to grow and increase revenue.

Average Selling Prices of Our Products May Decrease, Which May Affect Our 
Gross Margins 

The average selling prices for our products may be lower than expected as
a result of competitive pricing pressures, promotional programs and
customers who negotiate price reductions in exchange for longer term
purchase commitments. The pricing of products sold to our OEMs depends on
the specific features and functions of the product, the degree of
integration with the OEM's products, purchase volumes and the level of
sales and service support. Currently, the market for ISDN-based products
is more price competitive than the market for analog products, and we
expect such price competition to increase in the future. We expect to
experience pricing pressure in the future and anticipate that the average
selling prices and gross margins for our products will decrease over
product life cycles. We cannot assure you that we will be successful in
developing and introducing on a timely basis new products with enhanced
features that can be sold at higher gross margins.

If We Are Unable to Lower the Cost of Our Products, Purchasers May Buy 
From Our Competitors and Our Financial Results Would Suffer 

Certain of our competitors currently offer Internet access products at
prices lower than ours. Market acceptance of our products will depend in
part on reductions in the unit cost of our products. Our cost reduction
efforts may not allow us to keep pace with competitive pricing pressures
or lead to improved gross margins. Many of our competitors are larger and
manufacture products in significantly greater quantities than we intend
to for the foreseeable future. Consequently, these competitors have more
leverage in obtaining favorable pricing from suppliers and manufacturers.
In order to remain competitive, we must reduce the cost of manufacturing
our products through design and engineering changes. We may not be
successful in redesigning our products. Even if we are successful, our
redesign may be delayed or may contain significant errors and product
defects. In addition, any redesign may not result in sufficient cost
reductions to allow us to significantly reduce the list price of our
products or improve our gross margins. Reductions in our manufacturing
costs will require us to use more highly integrated components in future
products and may require us to enter into high volume or long-term
purchase or manufacturing agreements. Volume purchase or manufacturing
agreements may not be available on acceptable terms. We could incur
expenses without related revenue if we enter into a high volume or long-
term purchase or manufacturing agreement and then decide that we cannot
use the products or services offered by such agreement.

Our Market Is In An Early Stage of Development and Our Products May Not 
Achieve Widespread Market Acceptance 

Our success will depend upon the widespread commercial acceptance of
shared Internet access products by small offices. Small offices have only
recently begun to deploy shared Internet access products, and the market
for these products is not fully developed. If the single Internet access
devices, such as analog modems or ISDN, DSL and cable modems, currently
utilized by many small offices are deemed sufficient even though they do
not enable shared access, then the market acceptance of our products may
be slower than expected. Potential users of our products may have
concerns regarding the security, reliability, cost, ease of use and
capability of our products. We cannot accurately predict the future
growth rate or the ultimate size of the small office market for shared
Internet access solutions.

We Depend on Contract Manufacturers for Substantially All of Our 
Manufacturing Requirements and We May Be Unable to Successfully Expand 
Our Manufacturing Operations as We Grow 

We have developed a highly outsourced contract manufacturing capability
for the production of our products. Therefore, we rely on third party
contract manufacturers to procure components, assemble, test and package
our products. Our primary turnkey manufacturing partners are Micron
Custom Manufacturing Services, Inc., Discopy Labs Corporation and SMT
Unlimited, Inc. Any interruption in the operations of one or more of
these contract manufacturers or delays in their shipment of products
would adversely affect our ability to meet scheduled product deliveries
to our customers.

We intend to regularly introduce new products and product enhancements
that will require that we rapidly achieve volume production by
coordinating our efforts with those of our suppliers and contract
manufacturers. The inability of our contract manufacturers to provide us
with adequate supplies of high quality products or the loss of any of our
contract manufacturers would cause a delay in our ability to fulfill
orders while we obtain a replacement manufacturer. In addition, our
inability to accurately forecast the actual demand for our products could
result in supply, manufacturing or testing capacity constraints. These
constraints could result in delays in the delivery of our products or the
loss of existing or potential customers.

Although we perform random spot testing on manufactured products, we rely
on our contract manufacturers for assembly and primary testing of our
products. Any product shortages or quality assurance problems could
increase the costs of manufacturing, assembling or testing our products.


We Purchase Several Key Components of Our Products from Sole or Limited 
Sources and Could Lose Sales If These Sources Fail to Satisfy Our Supply 
Requirements 

We currently purchase several key components used in the manufacture of
our products from sole or limited sources and are dependent upon supply
from these sources to meet our needs. We are likely to encounter
shortages and delays in obtaining components in the future which could
adversely affect our ability to meet customer orders. Our principal sole
sourced components include microprocessors, line interface integrated
circuits, modem integrated circuits, DRAMs, transformers, selected other
integrated circuits, and plastic tooled enclosures.

We use a rolling six-month forecast based on anticipated product orders
to determine our material requirements. Lead times for materials and
components we order vary significantly, and depend on factors such as
specific supplier, contract terms and demand for a component at a given
time. Our components that have long lead times include power converters,
ISDN integrated circuits, DSL integrated circuits, flash memories, DRAMs
and SRAMs. If orders do not match forecasts, we may have excess or
inadequate inventory of certain materials and components, which could
harm our business.

Although we enter, either directly or through our contract manufacturers,
into purchase orders with our suppliers for components based on our
forecasts, we do not have any guaranteed supply arrangements with these
suppliers. Any extended interruption in the supply of any of the key
components currently obtained from a sole or limited source could affect
our ability to meet scheduled product deliveries to customers. We cannot
assure you that, as our demand for these components increases, we will be
able to obtain these components in a timely manner in the future. In
addition, financial or other difficulties facing our suppliers or
significant worldwide demand for the components they provide could
adversely affect the availability of these components. If we are unable
to obtain, either directly or through our contract manufacturers, a
sufficient supply of components from our current sources, we could
experience difficulties in obtaining alternative sources or in altering
product designs to use alternative components. Resulting delays or
reductions in product shipments could damage customer relationships.
Further, we may also be subject to increases in component costs.

The Market in Which We Sell Our Products is Intensely Competitive and Our 
Business Would Be Adversely Affected If We Lose Market Share or Otherwise 
Fail to Successfully Compete in This Market 

We compete in a new, rapidly evolving and highly competitive market. We
expect competition to persist and intensify in the future. Our current
and potential competitors offer a variety of competitive products,
including shared Internet access devices such as the products offered by
3Com, thin servers, and high-end networking equipment such as routers and
switches offered by companies such as Lucent, Cisco, Intel and Netopia.

Many of our competitors are substantially larger than we are and have
significantly greater financial, sales and marketing, technical,
manufacturing and other resources and more established distribution
channels. These competitors may be able to respond more rapidly to new or
emerging technologies and changes in customer requirements or devote
greater resources to the development, promotion and sale of their
products than we can. Furthermore, some of our competitors may make
strategic acquisitions or establish cooperative relationships among
themselves or with third parties to increase their ability to rapidly
gain market share by addressing the needs of our prospective customers.
These competitors may enter our existing or future markets with solutions
that may be less expensive, provide higher performance or additional
features or be introduced earlier than our solutions. Given the market
opportunity in the shared Internet access market, we also expect that
other companies may enter our market with better products and
technologies. If any technology that is competing with ours is more
reliable, faster, less expensive or has other advantages over our
technology, then the demand for our products and services would decrease,
which would seriously harm our business.

We expect our competitors to continue to improve the performance of their
current products and introduce new products or new technologies as
industry standards and customer requirements evolve that may supplant or
provide lower cost alternatives to our products. Successful new product
introductions or enhancements by our competitors could reduce the sales
or market acceptance of our products and services, perpetuate intense
price competition or make our products obsolete. To be competitive, we
must continue to invest significant resources in research and
development, sales and marketing and customer support. We cannot be sure
that we will have sufficient resources to make such investments or that
we will be able to make the technological advances necessary to be
competitive. As a result, we may not be able to compete effectively
against our competitors. Our failure to maintain and enhance our
competitive position within the market may seriously harm our business.

Increased competition is likely to result in price reductions, reduced
gross margins, longer sales cycles and loss of market share, any of which
would seriously harm our business and results of operations. We cannot be
certain that we will be able to compete successfully against current or
future competitors or that competitive pressures will not seriously harm
our business.


If We Fail to Enhance Our Existing Products or Develop and Introduce New 
Products and Features in a Timely Manner to Meet Changing Customer 
Requirements and Emerging Industry Standards, Our Ability to Grow Our 
Business Will Suffer

The market for shared Internet access solutions is characterized by
rapidly changing technologies and short product life cycles. Our future
success will depend in large part upon our ability to:
 . identify and respond to emerging technological trends in the market;
 . develop and maintain competitive products;
 . enhance our products by adding innovative features that differentiate
our products from those of our competitors;
 . bring products to market on a timely basis at competitive prices;
 . respond effectively to new technological changes or new product
announcements by others; and
 . respond to emerging broadband access technologies such as DSL and cable
modems.

We will not be competitive unless we continually introduce new products
and product enhancements that meet these emerging standards. In the
future, we may not be able to effectively address the compatibility and
interoperability issues that arise as a result of technological changes
and evolving industry standards.

The technical innovations required for us to remain competitive are
inherently complex, require long development cycles and are dependent in
some cases on sole source suppliers. We will be required to continue to
invest in research and development in order to attempt to maintain and
enhance our existing technologies and products, but we may not have the
funds available to do so. Even if we have sufficient funds, these
investments may not serve the needs of customers or be compatible with
changing technological requirements or standards. Most development
expenses must be incurred before the technical feasibility or commercial
viability of new or enhanced products can be ascertained. Revenue from
future products or product enhancements may not be sufficient to recover
the associated development costs.


We Have Experienced Significant Growth in our Business in Recent Periods 
and Our Failure to Effectively Manage This Growth Will Adversely Affect 
Our Business 

We have rapidly and significantly expanded our operations in recent
periods and anticipate that further significant expansion will be
required to address potential growth in our customer base and market
opportunities. This expansion has placed, and is expected to continue to
place, significant strain on our engineering, managerial, administrative,
operational, financial and marketing resources, and increased demands on
our systems and controls. To exploit the market for our products, we must
develop new and enhanced products while managing anticipated growth in
sales by implementing effective planning and operating processes. To
manage the anticipated growth of our operations, we will need to:

 . improve existing and implement new operational, financial and
management information controls, reporting systems and procedures;

 . hire, train and manage additional qualified personnel;

 . continue to expand and upgrade our core technologies; and

 . effectively manage multiple relationships with our customers,
suppliers, distributors and other third parties.

In addition, several members of our executive management team, including
Terry Gibson, Vice President of Finance and Chief Financial Officer, Elie
Habib, Vice President of Engineering, and Richard Bridges, Vice President
of Manufacturing have recently joined us. These individuals have not
previously worked together for substantial lengths of time and are in the
process of integrating as a management team. We cannot assure you that we
will be able to effectively manage the expansion of our operations, that
our systems, procedures or controls will be adequate to support our
operations or that the executive management team will be able to achieve
the rapid execution necessary to fully exploit the market opportunity for
our products and services.  Any failure to effectively manage our growth
could harm our business.

We Depend on Our Key Personnel Who May Not Continue to Work For Us 

Our future success depends in large part upon the continued services of
our key technical, sales and senior management personnel, none of whom is
bound by an employment agreement. The loss of any of our senior
management or other key research, development, sales and marketing
personnel, particularly if lost to competitors, could harm our business.
In particular, the services of Mahesh Veerina, President and Chief
Executive Officer, would be difficult to replace. We do not maintain "key
person" life insurance for any of our personnel.

We expect that we will need to hire additional personnel in all areas.
The competition for qualified personnel in our industry is intense,
particularly in the San Francisco Bay Area where our corporate
headquarters are located and in Hyderabad, India where we conduct a
significant portion of our research and development operations. At times,
we have experienced difficulty in hiring and retaining personnel with
appropriate qualifications, particularly in technical areas. If we do not
succeed in attracting new personnel, or retaining and motivating existing
personnel, our business will be adversely affected.


If We Do Not Provide Adequate Product Support and Training to Our 
Resellers Our Sales Could Be Adversely Affected 

Our ability to achieve our planned sales growth, retain current and
future customers and expand our network of resellers will depend in part
upon the quality of our customer service and product support operations.
We rely primarily on our resellers to provide the product support and
training required by our customers particularly during the initial
deployment and implementation of our products. We may not have adequate
personnel to provide the levels of support and product training our
resellers may require during initial product deployment or on an ongoing
basis to adequately support our customers. We also provide direct
customer service and support to the end-users of our products. Our
inability to provide sufficient support to our customers and resellers
could delay or prevent the successful deployment of our products and
could reduce our overall sales volumes. In addition, our failure to
provide adequate support could adversely impact our reputation and our
relationships with customers and resellers and could prevent us from
gaining new customers or expanding our reseller network.


If Our Products Contain Undetected Defects and Errors We Could Incur 
Significant Unexpected Expenses, Experience Product Returns and Lost 
Sales, and Be Subject to Product Liability Claims 

Our products are complex and may contain undetected defects, errors or
failures, particularly when first introduced or as new enhancements and
versions are released. We cannot assure you that, despite our testing
procedures, defects and errors will not be found in new products or in
new versions or enhancements of existing products after commencement of
commercial shipments. Any defects or errors in our products discovered in
the future could result in adverse customer reactions, negative publicity
regarding us and our products, delays in market acceptance of our
products, product returns, lost sales and unexpected expenses.

Sales and support of our products generally involve the risk of product
liability claims. Although our customer license agreements typically
contain provisions designed to limit our exposure to these claims, it is
possible that these limitation of liability provisions may not be
effective as a result of federal, state or local laws or ordinances or
unfavorable judicial decisions. A successful product liability claim
brought against us could harm our business.


If We Are Not Successful in Expanding Our Business in International 
Markets, Our Growth Will Suffer 

As part of our strategy to address the global needs of our customers and
partners, we have committed significant resources to opening
international offices and expanding our international sales and support
channels in advance of revenue. We cannot assure you that our efforts to
develop international sales and support channels will be successful.
Moreover, international sales are subject to a number of risks, including
changes in foreign government regulations and communications standards,
export license requirements, tariffs and taxes, other trade barriers,
difficulty in collecting accounts receivable, difficulty in managing
foreign operations, and political and economic instability. To the extent
our customers may be impacted by currency devaluations or general
economic crises, the ability of these customers to purchase our products
could be adversely affected. Payment cycles for international customers
are typically longer than those for customers in the United States. We
cannot assure you that foreign markets for our products will not develop
more slowly than currently anticipated. In addition, if the relative
value of the U.S. dollar in comparison to the currency of our foreign
customers should increase, the resulting effective price increase of our
products to these foreign customers could result in decreased sales.

We anticipate that our foreign sales will generally be invoiced in U.S.
dollars and, accordingly, we do not currently plan to engage in foreign
currency hedging transactions. However, as we expand our international
operations, we may allow payment in foreign currencies and exposure to
losses in foreign currency transactions may increase. We may choose to
limit any currency exposure through the purchase of forward foreign
exchange contracts or other hedging strategies. We cannot assure you that
any currency hedging strategy we may adopt would be successful in
avoiding exchange related losses.


If Political, Social or Economic Developments in India Adversely Affect 
Our Research and Development Operations in India, Our Ability to 
Introduce New and Enhanced Products Would Be Harmed and Our Sales May 
Suffer 

Our wholly-owned subsidiary, Ramp Networks Private Limited, is
incorporated in India and a substantial number of our research and
development personnel are located in India. Consequently, our business
may be affected by changes in exchange rates and controls, interest
rates, government of India policies, including taxation policy, as well
as political, social and economic developments affecting India.

In the past, the government of India has adopted policies that have
resulted in the nationalization of some industries. We cannot assure you
that economic policies adopted by the government of India will not result
in the expropriation of our business activities in India or otherwise
impair or prohibit our current research and development operations in
India. Furthermore, there is increasing competition for experienced
engineers in India and we cannot assure you that we will be successful in
attracting and retaining sufficient engineering personnel to support our
research and development operations in India which we expect to expand in
the future.


Our Products Must Comply With Complex Government Regulations Which May 
Prevent Us From Sustaining Our Revenue or Achieving Profitability 

In the United States, our products must comply with various regulations
and standards defined by the Federal Communications Commission and
Underwriters Laboratories. Internationally, products that we develop may
be required to comply with standards established by telecommunications
authorities in various countries as well as with recommendations of the
International Telecommunications Union. If we fail to obtain timely
domestic or foreign regulatory approvals or certificates, we would not be
able to sell our products where these regulations apply, which may
prevent us from sustaining our revenue or achieving profitability.


If Internet Usage Declines or the Internet Infrastructure Is Not 
Adequately Maintained and Expanded, Demand for Our Products May Decline 

The Internet has recently begun to develop and is rapidly evolving. As a
result, the commercial market for products designed to enable high-speed
access to the Internet has only recently begun to develop. Our success
will depend in large part on increased use of the Internet and other
networks based on Internet protocol by corporate telecommuters and small
offices. Critical issues concerning the commercial use of the Internet
remain unresolved and are likely to affect the development of the market
for our products. These issues include security, reliability, cost, ease
of access, government regulation and quality of service. The adoption of
the Internet for commerce and communications, particularly by enterprises
that have historically relied upon alternative means of commerce and
communications, generally requires the acceptance of a new method of
conducting business and exchanging information. The recent growth in the
use of the Internet has caused frequent periods of performance
degradation that have prompted efforts to upgrade the Internet
infrastructure. Any perceived degradation in the performance of the
Internet as a whole could undermine the benefits of our products.
Potentially increased performance and other benefits provided by our
products and the products of others are ultimately limited by, and are
reliant upon, the speed and reliability of the Internet backbone itself.
Consequently, the emergence and growth of the market for our products
will depend on improvements being made to the entire Internet
infrastructure to alleviate overloading and congestion.

If We Are Unable to Adequately Protect Our Intellectual Property Rights 
Other Companies May Use our Intellectual Property to Develop Competitive 
Products that May Reduce Demand for Our Products 

We rely on a combination of patent, copyright, trademark and trade secret
laws and restrictions on disclosure to protect our intellectual property
rights. We have filed two U.S. patent applications relating to the
architecture of our products. We cannot assure you that these
applications will be approved, that any issued patents will protect our
intellectual property or that they will not be challenged by third
parties. Furthermore, there can be no assurance that others will not
independently develop similar or competing technology or design around
any patents that may be issued. We also have one pending U.S. trademark
application.

We also enter into confidentiality or license agreements with our
employees, consultants and corporate partners, and control access to and
distribution of our software, documentation and other proprietary
information. In addition, we provide our products to end-users primarily
under "shrink-wrap" license agreements included in the packaging. These
agreements are not negotiated with or signed by the licensee, and thus
these agreements may not be enforceable in some jurisdictions. Despite
our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy or otherwise obtain and use our products or technology.
We cannot assure you that these precautions will prevent misappropriation
or infringement of our intellectual property. Monitoring unauthorized use
of our products is difficult, and we cannot assure you that the steps we
have taken will prevent misappropriation of our technology, particularly
in foreign countries where the laws may not protect our proprietary
rights as fully as in the United States.

Some of our OEM agreements also provide manufacturing rights and access
to our intellectual property and source code upon the occurrence of
specified conditions of default. If we were to default on these
agreements, our OEMs could use our intellectual property and source code
to develop and manufacture competing products, which would adversely
affect our performance and ability to compete.


We May Be Subject to Intellectual Property Infringement Claims That are 
Costly to Defend and Could Limit our Ability to Use Certain Technologies 
in the Future 

Our industry is characterized by the existence of a large number of
patents and frequent claims and related litigation regarding patent and
other intellectual property rights. In particular, leading companies in
the data communications and networking markets have extensive patent
portfolios with respect to modem and networking technology. From time to
time, third parties, including these leading companies, have asserted and
may assert exclusive patent, copyright, trademark and other intellectual
property rights to technologies and related standards that are important
to us. We expect that we may increasingly be subject to infringement
claims as the numbers of products and competitors in the small office
market for shared Internet access solutions grow and the functionality of
products overlaps.

In March 1999, we received a letter from NovaWeb Technologies, Inc.
alleging that certain of our products may infringe one of NovaWeb's
patents pertaining to intelligent modem bonding technology. On May 21,
1999, NovaWeb filed a complaint in the United States District Court
Northern District of California against us alleging infringement of this
patent. Although we intend to contest this action vigorously, litigation
is subject to inherent uncertainties and, therefore, we cannot assure you
that we will prevail in this action or that an adverse judgment will not
adversely affect our financial condition. In addition, we cannot assure
you that third parties will not assert additional claims or initiate
litigation against us or our manufacturers, suppliers or customers
alleging infringement of their proprietary rights with respect to our
existing or future products.

We may in the future initiate claims or litigation against third parties
for infringement of our proprietary rights to determine the scope and
validity of our proprietary rights. Any such claims, with or without
merit, could be time-consuming, result in costly litigation and diversion
of technical and management personnel, or require us to develop non-
infringing technology or enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may not be available on
acceptable terms, if at all. In the event of a successful claim of
infringement and our failure or inability to develop non-infringing
technology or license the proprietary rights on a timely basis, our
business would be harmed.



We Face a Number of Unknown Risks Associated With Trying to Become Year 
2000 Compliant


Some computers, software, and other equipment include computer code in
which calendar year data is abbreviated to only two digits. As a result
of this design decision, some of these systems could fail to operate or
fail to produce correct results if "00" is interpreted to mean 1900,
rather than 2000. As a result, computer systems and software used by many
companies and governmental agencies may need to be upgraded to comply
with year 2000 requirements or risk system failure or miscalculations
causing disruptions of normal business activities. These problems are
widely expected to increase in frequency and severity as the year 2000
approaches, and are commonly referred to as the "year 2000 problem." We
have just begun to identify measures to address the issues arising from
the year 2000 problem and therefore the risks associated with being year
2000 compliant are unknown. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Year 2000 Readiness
Disclosure."



Any Acquisitions We Make Could Adversely Affect Our Business 

As part of our business strategy, we expect to review acquisition
prospects that would complement our existing business or enhance our
technological capabilities. Future acquisitions by us could result in
large and immediate write-offs, the incurrence of debt and contingent
liabilities or amortization expenses related to goodwill and other
intangible assets, any of which could materially and adversely affect our
results of operations. Furthermore, acquisitions entail numerous risks
and uncertainties, including: . difficulties in the assimilation of
operations, personnel, technologies, products and the information systems
of the acquired companies;
. diversion of management's attention from other business concerns;
. risks of entering geographic and business markets in which we have no
or limited prior experience; and
. potential loss of key employees of acquired organizations.

Although we do not currently have any agreement with respect to any
material acquisitions, we may make acquisitions of complementary
businesses, products or technologies in the future. We cannot be certain
that we would be able to successfully integrate any businesses, products,
technologies or personnel that might be acquired in the future, and our
failure to do so could adversely affect our business.


Future Issuances of Additional Securities May Adversely Affect Our 
Stockholders 

In the future, we may be required to raise additional funds through the
issuance of equity, equity-related or debt securities to take advantage
of market opportunities, develop new products, pursue acquisition
opportunities or otherwise respond to competitive pressures. The issuance
of additional securities may be dilutive to our existing stockholders.
Furthermore, securities we may issue in the future could have rights,
preferences or privileges senior to those of our existing stockholders.


Stock market volatility 

The stock market in general has experienced volatility that often has
been unrelated to the operating performance of particular companies.
These broad market and industry fluctuations may adversely affect the
trading price of our common stock, regardless of our actual operating
performance. As a result, Ramp's stock price may be extremely volatile.

PART II.        OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS

See "Risk factors-- We May Be Subject to Intellectual Property
Infringement Claims That are Costly to Defend and Could Limit our Ability
to Use Certain Technologies in the Future".

On October 13th, 1999, the Company and certain former employees of the
Company appeared in the United States District Court Northern District of
California in San Jose and agreed to a settlement of claims made by the
former employees in exchange for cash and  shares of common stock of the
Company. The dispute between the parties was associated with the prior
acquisition by the Company of certain technologies and assets in June
1998. The estimated cost associated with this settlement has been
included in the Legal and severance cost charge included in the Statement
of Operations for the three months and nine months ended September 30,
1999. The charge has been included in accrued liabilities at September
30, 1999.  The shares of common stock are expected to be issued during
the three months ending December 31, 1999.

Additionally, from time to time the Company is involved in certain other
legal proceedings in the ordinary course of business. None of such
proceedings are expected to have a material adverse impact on the
Company's business, results of operations or financial condition.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In connection with its initial public offering in 1999, the Company filed
a Registration Statement on Form S-1, SEC File No. 333-76463(the
"Registration Statement"), which was declared effective by the Commission
on June 22, 1999. Pursuant to the Registration Statement, the Company
registered 4,000,000 shares of its Common Stock, $0.001 par value per
share, of which 3,853,000 shares were for its own account and 147,000
were for the accounts of certain selling stockholders. The initial public
offering resulted in gross proceeds of $44 million, $3,080,000 of which
was applied toward the underwriting discount and commissions. Other
expenses related to the offering are estimated to have been $985,000 paid
or are payable to unaffiliated parties. The net proceeds to the Company
from the sale were $38.4 million based on an initial public offering
price of $11.00 per share and after deducting the underwriting discounts
and commissions and estimated offering costs. The managing underwriters
were BancBoston Robertson Stephens, Dain Rauscher Wessels and Hambrecht &
Quist. Additionally, in July 1999, the Underwriters exercised their over-
allotment options and purchased 600,000 shares of common stock at the
issuance price of $11.00 per share. The Company received $6.1 million net
of commissions and costs.


From June 22, 1999 to September 30, 1999, the Company used such net
offering proceeds, in direct or indirect payments associated with such
items as operating activities, purchases of property and equipment,
principle payments on lease obligations and repayments of debt. The use
of the proceeds on such activities does not represent a material change
in the use of the proceeds described in the prospectus of the
Registration Statement. We currently expect to use the remaining net
proceeds primarily for working capital and general corporate purposes,
including increased sales and marketing expenditures, increased research
and development expenditures and capital expenditures made in the
ordinary course of business. In addition, we may use a portion of the net
proceeds for further development of our product lines through
acquisitions of products, technologies and businesses. However, we have
no present commitments or agreements with respect to any such
acquisitions. Pending such uses, we will invest the net proceeds in
short-term, investment grade, interest-bearing securities.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
None.

ITEM 5.  OTHER INFORMATION
None.


Item 6:  Exhibits and Reports on Form 8-K
       
     (a)     Exhibits

                
       Exhibit 27.1 - Financial Data Schedule


       
     (b)     Reports on Form 8-K

                
     No reports on Form 8-K were filed by the Company during the fiscal quarter
ended September 30, 1999.



                                RAMP NETWORKS, INC.






                                   SIGNATURES

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

| |                    
| | -------------------
| | RAMP NETWORKS, INC.

| |             
| | ------------
| | (Registrant)

Dated: November 12, 1999



| |     |                 
| | --- | ----------------
| | By: | /s/ Terry Gibson

| |                                                                 
| | ----------------------------------------------------------------
| |                                                                 
| | Terry Gibson                                                    
| | Vice President of Finance,
Chief Financial Officer and Secretary
| | (Principal Financial and Chief Accounting Officer)              

``