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

                                   FORM 10-QSB

(Mark One)

  _X_    Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934

              For the quarterly period ended September 30, 2001 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 No. 0-13836


                          SILICON VALLEY RESEARCH, INC.
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)


          California                                       94-2743735
--------------------------------------------------------------------------------
(State or other jurisdiction of                            (IRS Employer
incorporation or organization)                             Identification No.)


6293 San Ignacio Avenue Suite 201   San Jose, CA                   95119-1231
--------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)

                                 (408) 361-0333
--------------------------------------------------------------------------------
               Registrant's telephone number, including area code


6360 San Ignacio Avenue            San Jose, CA                          95119
--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                    YES_X_                            NO___

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date.

            Common Shares Outstanding at October 31, 2001: 42,583,965

Transitional Small Business Disclosure Statement Format (Check One) YES__ NO_X_

<PAGE>

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES

                                      INDEX

                                                                           Pages
                                                                           -----
Part I. FINANCIAL INFORMATION

        Item 1. Financial Statements

           Consolidated Balance Sheet -
             September 30, 2001 (unaudited)                                   3

           Consolidated Statements of Operations -
             Three and Six Months Ended
             September 30, 2001 and 2000 (unaudited)                          4

           Consolidated Condensed Statements of Cash Flows -
             Three and Six Months Ended
             September 30, 2001 and 2000 (unaudited)                          5

           Notes to Consolidated Financial Statements                      6-10

        Item 2. Management's Discussion and Analysis of
                Financial Condition and Results of
                Operations                                                11-19

        Item 3. Quantitative and Qualitative Disclosures
                About Market Risk                                            19

Part II. OTHER INFORMATION                                                20-22

         Item 1       Legal Proceedings
         Item 2       Changes in Securities and Use of Proceeds
         Item 3       Defaults Upon Senior Securities
         Item 4       Submission of Matters to a Vote of
                      Securities Holders
         Item 5       Other Information
         Item 6       Exhibits and Reports on Form 8-K

         Signatures                                                          23


                                  Page 2 of 23
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                   (Unaudited)
                                 (In thousands)

Assets                                                           September 30,
                                                                     2001
                                                                   --------
Current Assets:
     Cash and cash equivalents                                     $     37
     Accounts receivable, net of allowances of $85                       76
     Prepaid expenses and other current assets                           52
                                                                   --------
                                                                        165

Fixed assets, net                                                       128
Other assets, net                                                       175
                                                                   --------
                                                                   $    468
                                                                   ========

Liabilities and Shareholders' Equity

Current Liabilities:
     Notes payable                                                 $     25
     Short term borrowings                                               30
     Accounts payable                                                   353
     Accrued expenses                                                   398
     Deferred revenue                                                    55
                                                                   --------
                                                                        861
                                                                   --------

Long-term debt, less current portion                                    926
                                                                   --------
Deferred tax liability                                                   20
                                                                   --------

Commitments and Contingencies (Note 8)

Shareholders' Equity:
Preferred stock, no par value:
     Authorized: 1,000 shares
     Issued and outstanding: none                                      --
Common stock, no par value:
     Authorized: 60,000 shares
     Issued and outstanding:
       42,584 shares                                                 46,186
Accumulated deficit                                                 (47,525)
                                                                   --------
                                                                     (1,339)
                                                                   --------
                                                                   $    468
                                                                   ========

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

                                  Page 3 of 23
<PAGE>

                                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                                      Consolidated Statements of Operations
                                                   (Unaudited)
                                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                      Three Months Ended                   Six Months Ended
                                                         September 30,                      September 30,
                                                   2001              2000              2001              2000
                                                 --------          --------          --------          --------
<S>                                              <C>               <C>               <C>               <C>
Revenue:
     License fees and other                      $     76          $   --            $    207          $    585
     Maintenance and services                         154               261               556               445
                                                 --------          --------          --------          --------
     Total revenue                                    230               261               763             1,030
                                                 --------          --------          --------          --------
Cost of revenue:
     License fees and other                            93                66               110               132
     Maintenance and services                          68               170               259               283
                                                 --------          --------          --------          --------
     Total cost of revenue                            161               236               369               415
                                                 --------          --------          --------          --------
Gross margin                                           69                25               394               615
                                                 --------          --------          --------          --------

Operating expenses:
     Engineering, research and development            182               209               394               369
     Selling and marketing                            277               285               573               490
     General and administrative                       229               180               442               335
                                                 --------          --------          --------          --------
     Total operating expenses                         688               674             1,409             1,194
                                                 --------          --------          --------          --------

Operating loss                                       (619)             (649)           (1,015)             (579)
                                                 --------          --------          --------          --------

Other income (expense):
     Interest income                                 --                   2              --                   8
     Interest expense                                 (23)              (24)              (46)              (49)
     Other, net                                      --                 (32)             --                 (32)
                                                 --------          --------          --------          --------
     Total other income                               (23)              (54)              (46)              (73)
                                                 --------          --------          --------          --------

Loss before provision for
     income taxes                                    (642)             (703)           (1,061)             (652)

Provision for income taxes                           --                --                --                --
                                                 --------          --------          --------          --------
Net loss                                         $   (642)         $   (703)         $ (1,061)         $   (652)
                                                 ========          ========          ========          ========


Net loss per basic share                         $  (0.02)         $  (0.02)         $  (0.03)         $  (0.02)
                                                 ========          ========          ========          ========

Weighted-average common shares
     outstanding (basic)                           42,387            35,591            41,568            35,554
                                                 ========          ========          ========          ========

Net loss per diluted share                       $  (0.02)         $  (0.02)         $  (0.03)         $  (0.02)
                                                 ========          ========          ========          ========

Weighted-average common shares
     outstanding (diluted)                         42,387            35,591            41,568            35,554
                                                 ========          ========          ========          ========

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

                                                 Page 4 of 23
<PAGE>

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                 Consolidated Condensed Statements of Cash Flows
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                Six Months Ended
                                                                  September 30,
                                                            2001                   2000
                                                          -------                -------
<S>                                                       <C>                    <C>
Cash Flows from Operating Activities:
Net loss                                                  $(1,061)               $  (652)
Adjustments to reconcile net loss to net
cash used in operating activities:
     Depreciation and amortization:
       Fixed assets                                            42                     56
       Software licenses and development costs                120                    142
     Loss on sale of fixed assets                                                      9
     Write-off of bad debts                                   240                    255
Changes in assets and liabilities, net:
     Accounts receivable                                      160                   (357)
     Other receivable                                         151                   --
     Prepaid expenses and other current assets                139                     18
     Accounts payable                                          20                     21
     Accrued expenses                                         146                   (118)
     Deferred revenue                                         (35)                    17
     Other, net                                                30                     73
                                                          -------                -------

Net cash used in operating activities                         (48)                  (536)
                                                          -------                -------

Cash Flows from Investing Activities:
Acquisition of fixed assets                                    (6)                  (147)
Capitalization of software development costs and
         purchase of software licenses                        (60)                  --
                                                          -------                -------

Net cash used in investing activities                         (66)                  (147)
                                                          -------                -------

Cash Flows from Financing Activities:
Principal payments on short-term borrowings                  (118)                  --
Proceeds from issuance of common stock and warrants           166                     10
                                                          -------                -------

Net cash provided by financing activities                      48                     10
                                                          -------                -------

Effect of exchange rate changes on cash                      --                     --
                                                          -------                -------

Net increase (decrease) in cash and
     cash equivalents                                         (66)                  (673)
Cash and cash equivalents at beginning
     of period                                                103                    815
                                                          -------                -------

Cash and cash equivalents at end
     of period                                            $    37                $   142
                                                          =======                =======

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

                                  Page 5 of 23
<PAGE>

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         September 30, 2001 - Unaudited
                                 (In thousands)

Note 1: Basis of Presentation and Financial Statement Information

         The accompanying  consolidated  financial statements have been prepared
by the  Company  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission for interim financial  statements.  Therefore,  they do not
include all the disclosures  which were presented in the Company's annual report
on Form  10-KSB.  These  financial  statements  do not include  all  disclosures
required by generally accepted accounting principles and accordingly,  should be
read in  conjunction  with  the  consolidated  financial  statements  and  notes
included as part of the  Company's  latest  annual report on Form 10-KSB for the
fiscal year ended March 31, 2001.

         In the opinion of management,  the  consolidated  financial  statements
include  all  adjustments  (consisting  only of  normal  recurring  adjustments)
necessary to present  fairly the  consolidated  financial  position,  results of
operations  and cash flows for the interim  period.  The  results of  operations
presented are not  necessarily  indicative of the results to be expected for the
full year or for any other period.

         The report of Moss Adams LLP on the Company's fiscal 2001  consolidated
financial  statements  dated  June 8, 2001  included  an  explanatory  paragraph
regarding the Company's ability to continue as a going concern.  There can be no
assurance  that the Company  will not  continue to incur  significant  operating
losses or that  required  additional  financing  will be  available  to meet the
Company's  business  plans in fiscal 2002 and beyond.  The Company has  incurred
significant  losses for the last two fiscal years from  operations  and does not
believe that cash and cash  generated  from  operations  will be  sufficient  to
finance operations  through fiscal 2002 without additional working capital.  The
Company is exploring  financing  alternatives  to supplement  its cash position.
Potential  sources of additional  financing  include private equity  financings,
mergers, strategic investments,  strategic partnerships or various forms of debt
financings. The Company has recently introduced updated versions of its existing
products and has plans to continue developing enhanced software products.  There
can be no assurance that the Company will be able to execute additional forms of
financing  or that the  Company  will not  incur  additional  losses  until  its
recently introduced and existing products generate  significant  revenue.  These
events  raise  substantial  doubt about the  Company's  ability to continue as a
going concern. The accompanying financial statements have been prepared assuming
the  Company  will  continue  as a going  concern.  The  accompanying  financial
statements do not include any adjustments  that might result from the outcome of
these uncertainties.

Note 2: Earnings Per Share

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

                                  Page 6 of 23

<PAGE>


                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                         September 30, 2001 - Unaudited
                                 (In thousands)

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

<TABLE>
<CAPTION>
                                                    Three Months Ended                 Six Months Ended
                                                       September 30,                      September 30,
                                                  2001              2000              2001              2000
                                                --------          --------          --------          --------
<S>                                             <C>               <C>               <C>               <C>
Net loss                                        $   (642)         $   (703)         $ (1,061)         $   (652)

Weighted-average common shares
     outstanding (basic)                          42,387            35,591            41,568            35,554

Weighted-average common stock equivalents:
     Stock options                                  --                --                --                --
     Warrants                                       --                --                --                --
Weighted-average common shares
     outstanding (diluted)                        42,387            35,591            41,568            35,554
</TABLE>


Note 3: Comprehensive Income (Loss)

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

<TABLE>
<CAPTION>
                                         Three Months Ended                    Six Months Ended
                                            September 30,                        September 30,
                                       2001              2000               2001               2000
                                     -------            -------            -------            -------
<S>                                  <C>                <C>                <C>                <C>
Net loss                             $  (642)           $  (703)           $(1,061)           $  (652)
Other comprehensive (loss) gain         --                 --                 --                 --
                                     -------            -------            -------            -------
     Total comprehensive loss        $  (642)           $  (703)           $(1,061)           $  (652)
                                     =======            =======            =======            =======
</TABLE>


Note 4: Statement of Cash Flows Information

                                                              Six Months Ended
                                                                September 30,
                                                              2001        2000
                                                              ----        ----
Supplemental Cash Flow Information:
Cash paid during the period for:
     Interest                                                $ --        $ 42
     Income Taxes                                            $ --        $ --
Non-cash investing and financing activities:
     Common stock issued in exchange for
        note payable                                         $ --        $ 74

                                  Page 7 of 23

<PAGE>


                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                         September 30, 2001 - Unaudited
                                 (In thousands)

Note 5: Balance Sheet Components

                                                                 September 30,
                                                                      2001
                                                                    -------
Other Assets:
Software development costs                                          $ 1,047
Software licenses                                                       979
                                                                    -------
                                                                      2,026
Less accumulated amortization                                        (1,934)
                                                                    -------
                                                                         92
Goodwill                                                                 73
Other                                                                    10
                                                                    -------
                                                                    $   175
                                                                    =======
Accrued Expenses:
Payroll and related costs                                           $   229
Taxes payable                                                            38
Interest payable                                                        124
Other                                                                     7
                                                                    -------
                                                                    $   398
                                                                    =======

Note 6: Bank Borrowings and Long-Term Debt

         In January 2001,  the Company  entered into an Agreement  with its bank
for the purchase of the Company's  receivables.  The agreement provides that the
bank will purchase with recourse up to $250 of the Company's  domestic  accounts
receivable.  The bank will advance the Company 80% of qualified receivables.  In
the event that the Company's customers do not pay on the invoices within 90 days
of invoice date,  the Company may be required to return the amounts  advanced to
the bank.

         In June 1999, the Company began a subordinated  debt/warrant financing.
The financing included  approximately $1,000 of three-year notes and the sale of
approximately  8,000  Warrants  at $0.01  per  Warrant.  The debt  bears  simple
interest of 10% and the Warrants  have a five-year  term with an exercise  price
per share of $0.125. This financing  transaction  consists of two closings.  The
first  closing  took  place on June 7,  1999.  The  Company  received  $768 cash
proceeds from this closing.  This included $711 of three-year notes and the sale
of approximately 5,700 Warrants at $0.01 per Warrant.  The second closing was to
have taken place on July 15, 1999. The closing was extended until  September 24,
1999 pending negotiation of a workout with the Creditors'  Committee through the
Credit  Managers'  Association  to  resolve  accounts  payable  issues  that was
satisfactory to the majority of the investors.  An agreement was reached and the
Company received  approximately $312 cash proceeds from the second closing.  The
Company  has used  part of the  proceeds  from the  financing  to  complete  the
Settlement  Agreement with its lender and to pay other accounts payable and used
the balance of the proceeds to help fund its operations.  The Company's CEO, the
Company's  Chairman of the Board,  an  affiliate  of a Company  director and two
Company 10% shareholders participated in the financing.

Note 7: Capital Stock

         In  June  2001,  the  Company  began  a  private  placement  of  equity
securities.  The Company  completed  the private  placement  of 1,471  shares of
Common Stock on July 13, 2001,  with total  proceeds to the Company of $125, $75
of which was  received  prior to June 30,  2001.  The shares of Common Stock are
unregistered.  The  Company  agreed to file a  registration  statement  with the
Securities and Exchange Commission to become effective on or before November 11,
2001  pursuant to the terms of the stock  purchase  agreement.  Per an agreement
with the private  placement  participants,  the filing date of the  registration
statement  was  extended  until six weeks  after the Company  completes  another
private  placement.  Affiliates  of  a  director  participated  in  the  private
placement.

                                  Page 8 of 23
<PAGE>

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

         The Company  issued 106 shares of Common Stock valued at $9 in exchange
for services.

Note 8: Commitments and Contingencies

         As with  other  companies  in  industries  similar  to  Silicon  Valley
Research,  Inc.,  the  Company  is  subject  to the risk of  adverse  claims and
litigation  on a variety of  matters,  including  infringement  of  intellectual
property,  intentional and/or negligent  misrepresentation of material facts and
breach of  fiduciary  duties.  In March 2001,  the Company  filed suit against a
customer to recover  approximately  $220 for amounts  unpaid for a license sale.
The  customer  has  counterclaimed  the  following  causes of action:  breach of
contract,  breach of warranty and  negligent  misrepresentation.  On October 31,
2001,  the Company  settled the dispute  with its  customer.  In exchange  for a
mutual release, the customer paid $60 to SVR in November 2001.

Note 9: Legal Action

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

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

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

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

         Avant!   Corporation   requested  an  extension  to  respond  to  SVR's
complaint,  which was  originally  due on September 10, 2001. SVR did not oppose
the judge's  granting to Avant!  of a thirty day extension  requiring  Avant! to
respond to SVR's lawsuit by October 10, 2001.  Avant!  Corporation  has filed an
answer to the two claims in the SVR lawsuit  against it that it had not moved to
dismiss. In its answer, Avant! denied that its use of the Cadence source code in
products sold in competition  with SVR constituted  tortious  interference  with
SVR's prospective business advantage,  and it denies that its marketing of those
products constituted false advertising or unfair competition against SVR.

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

                                  Page 9 of 23
<PAGE>

Note 10: Recent Accounting Pronouncements

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

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

                                 Page 10 of 23
<PAGE>

ITEM 2.                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 (In thousands)

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations  includes  a number  of  forward-looking  statements,  which  reflect
Silicon  Valley  Research,  Inc.'s  ("the  Company" or "SVR")  current view with
respect to future events and financial  performance.  In this report,  the words
"anticipates,"  "believes,"  "expects,"  "intends,"  "future," "may" and similar
expressions  identify  forward-looking  statements.  Some  of  the  examples  of
forward-looking  statements  in this report  include that barring a  substantial
increase in sales  activity,  we will run out of cash  during the third  quarter
unless we conduct a financing or are successful in pursuing  other  alternatives
such as an acquisition or sale or license of our  technology,  that we will have
to defer pay to service  providers during the third quarter of fiscal 2002 if we
do not obtain  additional  cash, that a possible source of cash is the potential
exercise of outstanding  warrants if our stock price increases,  that we plan to
release product upgrades and enhancements and to increase  international  sales.
These and other  forward-looking  statements  are  subject to certain  risks and
uncertainties,  including those discussed in the Other Factors  Affecting Future
Results section of this Item 2, elsewhere in this Form 10-QSB,  and as set forth
in the  Company's  Form  10-KSB on file with the SEC,  that could  cause  actual
results to differ  materially  from  historical  results  or those  anticipated.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which speak only as of the date hereof.  We undertake no obligation
to  publicly  release  the  results of any  revisions  to these  forward-looking
statements  which  may be made to  reflect  events  or  circumstances  occurring
subsequent  to the filing of the Form 10-QSB with the  Securities  and  Exchange
Commission.

RESULTS OF OPERATIONS

REVENUE

         License revenue for the second quarter of fiscal year 2002, which ended
September 30, 2001,  was $76, an increase  from $0 in the second  quarter a year
ago. License revenue for the six-month period ended September 30, 2001 decreased
to  $207  from  $585  over  the  six-month  period  ended  September  30,  2000.
Maintenance  and  services  revenue for the second  quarter of fiscal year 2002,
which  ended  September  30, 2001 was $154,  a decrease  from $261 in the second
quarter a year ago.  Maintenance and services  revenue for the six-month  period
ended  September 30, 2001  increased to $556 from $445 for the six-month  period
ended  September 30, 2000.  The decrease in revenue from the same periods in the
prior year is primarily  due to a slowdown in the  electronics  industry and the
economy in general. In addition, the tragic events of September 11th resulted in
a sharp decline in our sales activity during the second half of September, which
is  traditionally  the time  when our  quarterly  sales  are  booked.  We had no
international  sales in the second  quarters of fiscal  2002 and 2001.  Prior to
fiscal  2000,  international  sales  were  made  primarily  in Japan  and  other
countries in the Far East.  Our plans for fiscal 2002 include an aggressive  new
product plan, including new releases of significant enhancements for each of our
primary products,  as well as plans to increase  international  sales.  However,
there can be no  assurance  that these new  products  and  enhancements  will be
released on a timely basis,  if at all, or will gain market  acceptance  nor can
there be any assurance that we will be able to generate  material  international
sales. We intend to continue to rely on the services  market going forward.  See
"Other Factors  Affecting Future  Results-New  Products and Rapid  Technological
Change; Risk of Product Defects".

         A substantial portion of the Company's revenues in each quarter results
from transactions  during the last month of that quarter.  For this reason among
others,   the   Company's   revenues  are  subject  to   significant   quarterly
fluctuations. If revenue levels are below expectations, operating results may be
materially  and adversely  affected.  In addition,  the Company's  quarterly and
annual  results may  fluctuate as a result of many  factors,  including  but not
limited to the size and timing of software  license fees and service  contracts,
timing  of   co-development   projects  with  customers,   timing  of  operating
expenditures,  increased competition,  new product announcements and releases by
the  Company  and its  competitors,  gain or loss of  significant  customers  or
distributors,  expense levels, renewal of maintenance contracts, pricing changes
by the Company or its competitors,  personnel changes, foreign currency exchange
rates,  and  economic  conditions  generally  and  in the  electronics  industry
specifically.

         The Company's expense levels are based, in part, on its expectations as
to future revenue levels, which are difficult to predict.

COST OF REVENUE

         Cost of license  fees and other for the second  quarter of fiscal  year
2002 was $93 as compared to $66 in the second quarter of fiscal year 2001.  Cost
of license fees and other for the six months ended  September

                                 Page 11 of 23
<PAGE>

30, 2001 was $110 compared to $132 for the six months ended  September 30, 2000.
Cost of sales  of  license  fees and  other is  primarily  the  amortization  of
software development costs and is not a function of revenue.

         Cost of maintenance  and services for the second quarter of fiscal year
2002 was $68 compared to $170 in the second quarter of fiscal year 2001. Cost of
maintenance  and services for the six months ended  September  30, 2001 was $259
compared  to  $283  for  the  six  months  ended  September  30,  2000.  Cost of
maintenance and services is primarily the cost of providing design services.

ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES

         Engineering,  research and development  expenses for the second quarter
of fiscal year 2002 were $182  compared to $209 in the second  quarter of fiscal
year 2001. Comparing the second quarter of fiscal 2002 and the second quarter of
fiscal 2001, engineering,  research and development expenses were 79% and 80% of
total revenue, respectively.  Engineering, research and development expenses for
six months  ended  September  30,  2001 were $394  compared  to $369 for the six
months ended September 30, 2000. Comparing these periods, engineering,  research
and development  expenses were 52% and 36% of total revenue,  respectively.  The
increase  in  engineering,  research  and  development  expenses  is  due to our
continued  emphasis  on  product  research  and  development.  The  increase  of
engineering,  research and  development  expenses as a percentage of revenues is
due to the  decrease in revenue  while such  expenses  have not  correspondingly
decreased.

SELLING AND MARKETING EXPENSES

         Selling and  marketing  expenses for the second  quarter of fiscal year
2002  decreased to $277 from $285 in the second  quarter of fiscal year 2001. In
the second quarter of fiscal 2002 and the second quarter of fiscal 2001, selling
and  marketing  expenses  were  121% and 109% of  total  revenue,  respectively.
Selling and  marketing  expenses  for the six months  ended  September  30, 2001
increased  to $573  from  $490 for the six  months  ended  September  30,  2000.
Comparing the six-month periods, selling and marketing expenses were 75% and 48%
of total  revenue,  respectively.  The small  change in  selling  and  marketing
expenses for the second  quarter  resulted from a write-off of bad debts in both
second  quarters.  The  increase  in  selling  and  marketing  expenses  for the
six-month  period  is due to  increased  costs  associated  with  the  Company's
attendance  at an industry  trade show.  The  increase of selling and  marketing
expenses as a  percentage  of revenues is due to the  decrease in revenue  while
such expenses have not correspondingly decreased.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  expenses  increased to $229 for the second
quarter of fiscal year 2002 from $180 in the second  quarter of fiscal 2001.  In
the second quarter of fiscal 2002 and the second quarter of fiscal 2001, general
and  administrative  expenses were 100% and 69% of total revenue,  respectively.
General and administrative  expenses for the six months ended September 30, 2001
increased  to $442  from  $335 for the six  months  ended  September  30,  2000.
Comparing the six-month periods,  general and  administrative  expenses were 58%
and 33% of total  revenue,  respectively.  The increase is due to an increase in
personnel, bank charges related to the accounts receivable financing,  increased
legal fees and investor  relations.  The increase of general and  administrative
expenses as a percentage of revenue is due to the decrease in revenue while such
expenses have not correspondingly decreased.

OTHER INCOME (EXPENSE)

         Other  income  for the  first six  months of fiscal  year 2002 and 2001
includes interest income and interest expense on subordinated debt.

LIQUIDITY AND CAPITAL RESOURCES

         Since  inception,  we have financed our  operations  primarily  through
sales  of  equity  securities  and  to a  lesser  extent,  cash  generated  from
operations.  During the six  months  ended  September  30,  2001,  cash and cash
equivalents  decreased $66 from $103 to $37.  This  decrease  resulted from cash
provided by financing  activities of $48 less cash used by operations of $48 and
less $66 of cash used for investing activities.  We received  approximately $166
from the  exercise of  outstanding  warrants  and a private  placement of equity
securities. A possible future source of cash for us is the potential exercise of
outstanding warrants if our stock price were to increase.

                                 Page 12 of 23
<PAGE>

         We reported an operating  loss for the six months ended  September  30,
2001 of  $(1,015).  At  September  30, 2001,  we had an  accumulated  deficit of
$47,525.  The  achievement  of  profitability  is primarily  dependent  upon the
continued development and commercial acceptance of our products,  the successful
management of the business and management's  ability to strategically  focus the
Company.  There can be no assurance that  profitable  operations  will occur. In
addition,  we are  experiencing  negative  cash  flow  from  operations  and may
continue  to  experience  negative  cash flow from  operations  for a portion of
fiscal 2002 and potentially thereafter.

         Our primary  unused sources of funds at September 30, 2001 consisted of
cash and cash equivalents of $37.

         Our operations have required substantial cash in the past; for example,
$48  during  the first six  months of fiscal  2002.  In  addition,  we have been
required from time to time to defer pay for consultants and employees, including
the CEO, and we will have to do so during the third quarter of fiscal 2002 if we
do not obtain  additional  cash resources.  This could cause employee  retention
issues.

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

         In June 2001,  we began a private  placement of equity  securities.  On
July 13, 2001, we completed the private  placement of 1,471 shares of our Common
Stock,  with proceeds to us of $125, $75 of which was received prior to June 30,
2001.  The  shares  of  Common  Stock  are  unregistered.  We  agreed  to file a
registration  statement with the  Securities  and Exchange  Commission to become
effective  on or before  November  11,  2001  pursuant to the terms of the stock
purchase  agreement.  Per an agreement with the private placement  participants,
the filing date of the registration statement was extended until six weeks after
we complete another private placement,  which we are attempting;  however, there
can be no  assurance  that we  will  be  successful.  Affiliates  of a  director
participated in the private placement.

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

         We may  issue  one or more  series  of  Preferred  Stock  with  rights,
preferences, or privileges senior to those of the Common Stock. Our Common Stock
was delisted from trading on the Nasdaq National Market in November 1998 and now
trades  in  the  over-the-counter  market.  Our  ability  to  obtain  additional
financing  through the  issuance of our Common Stock or  securities  convertible
into Common  Stock such as  Preferred  Stock could be  adversely  affected.  See
"Delisting From Nasdaq; Disclosure Relating to Low-Priced Stock".

         We believe that cash and cash  generated  from  operations  will not be
sufficient  to finance  operations  through  the third  quarter of fiscal  2002.
Management is exploring financing  alternatives to supplement our cash position.
Potential  sources of additional  financing  include private equity  financings,
mergers, strategic investments,  strategic partnerships, sale of licenses of our
technology  or products  or various  forms of debt  financings.  There can be no
assurance  that we will be successful  in obtaining  cash through our pursuit of
these alternatives.  The unavailability or timing of any financing could prevent
or delay the continued  development  and marketing of SVR products and services.
In addition,  substantial  curtailment  of our  operations may be required which
could result in bankruptcy.


                                 Page 13 of 23
<PAGE>

Other Factors Affecting Future Results

Recent and  Expected  Losses;  Accumulated  Deficit.  We  incurred a net loss of
$(1,061)  for the six months  ended  September  30, 2001 and had an  accumulated
deficit of $47,525 as of September 30, 2001. We may incur future  losses.  There
is no assurance that we will generate  positive cash flow from our operations to
fund our growth or that we will obtain  profitability  in any future period.  To
the extent we incur losses or grow in the future,  our  operating  and investing
activities may use cash and, consequently, such losses or growth will require us
to obtain additional sources of financing in the future.

Need for Future Financing.  As described above, under Management  Discussion and
Analysis-Liquidity  and Capital  Resources,  we believe cash and cash  generated
from  operations  are not  sufficient  to finance  operations  through the third
quarter of fiscal 2002 and we are exploring  financing and other alternatives to
supplement  our cash  position to service our current debt and any negative cash
flow from  operations.  There can be no assurance  that we will be able to raise
any cash from our pursuit of such  financing or other  alternatives  or that any
such cash we are able to raise will be on attractive terms.

Going  Concern   Assumptions.   Our  independent   accountants'  report  on  our
consolidated  financial  statements as of and for the years ended March 31, 2001
and 2000  contained an  explanatory  paragraph  indicating  that our  historical
operating losses and limited capital resources raise substantial doubt about our
ability to continue as a going concern.  If we are unable to generate sufficient
cash from operations or if necessary,  raise  sufficient funds to cover the cost
of operations,  it is likely that any independent  accountant's report on future
financial statements will include a similar explanatory paragraph.

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

Dependence  on Certain  Customers.  A small  number of  customers  account for a
significant  percentage of SVR total revenue. For the first six months of fiscal
2002,  three customers  accounted for 64% of our total revenue.  There can be no
assurance that sales to these entities,  individually or as a group,  will reach
or exceed  historical levels in any future period.  Any substantial  decrease in
sales to one or more of these customers could have a material  adverse effect on
our business, operating results or financial condition.

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

-        extremely rapid technological change

-        frequent new product introductions and enhancements

-        evolving industry standards

-        rapidly changing customer requirements.

         The   development  of  more  complex   integrated   circuits  with  new
technologies  will require more  sophisticated  design tools. The success of our
future  operations  partly depends upon our ability to enhance current  products
and to develop and introduce new products on a timely and cost-effective  basis.
Our products and services  must keep pace with  technological  developments  and
evolving  industry  standards  and   methodologies,   as  well  as  address  the
increasingly sophisticated needs of customers.  During fiscal year 2002, we will
have an aggressive new product release and current product update program,  upon
which expected revenue increases are partially based. It is possible that in the
future,  we  may  experience  delays  in new  product  development  and  product
enhancements.  We have experienced similar delays in the past. Such delays would
likely  decrease  expected  fiscal year 2002  revenues,  which could cause us to
incur losses and utilize our available cash or even run out of cash.

                                 Page 14 of 23
<PAGE>

         In fiscal  2001,  we announced  new products  offered on the e*ECAD Web
service. However, there is no guarantee that:

-        these new products will gain market acceptance

-        we will be successful in developing and marketing product enhancements

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

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

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

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

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

Delisting From NASDAQ; Disclosure Relating to Low-Priced Stock. Our common stock
was delisted  from trading on the NASDAQ  National  Market on November 16, 1998.
Our common  stock  immediately  began  trading on the OTC Bulletin  Board.  As a
result,  our ability to obtain  additional  financing  through  the  issuance of
common  stock or  securities  convertible  into  common  stock may be  adversely
affected.  Investors  might  find that  disposing  of our  common  stock is more
difficult than it has been in the past. The trading price of our common stock is
currently  less than $5.00 per share.  Because  our common  stock falls into the
category  defined  as penny  stock,  trading in the  common  stock is  currently
subject to certain  rules  promulgated  under the Exchange  Act,  which  require
additional  disclosure by broker-dealers.  These rules require us, in advance of
trading, to provide investors with disclosure schedules, which explain the penny
stock market and  associated  risks.  The rules impose  various  sales  practice
requirements on broker-dealers who sell penny stock.  Broker-dealers engaging in
some types of these transactions must make a special  suitability  determination
and obtain  your  written  consent  prior to sale.  This  additional  burden may
discourage  broker-dealers from actively effectuating common stock transactions,
which  in  turn  could  have  the  adverse  effect  of  severely   limiting  the
marketability  of our common  stock.  Therefore,  the ability of Silicon  Valley
Research,  Inc.  shareholders  to resell their stock would be limited.  In turn,
this could adversely affect our ability to obtain future equity financing.

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

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

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

-        proprietary rights or other litigation, or

                                 Page 15 of 23
<PAGE>

-        changes in earnings estimates by analysts or other factors

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

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

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

-        uncertainties of the size and timing of software license fees

-        timing of co-development projects with customers

-        timing of operating expenditures

-        increased competition

-        new product announcements and releases by us and our competitors

-        gain or loss of significant customers or distributors

-        expense levels

-        renewal of maintenance contracts

-        pricing changes by us or our competitors

-        personnel changes

-        foreign currency exchange rates

-        economic   conditions   generally  and  in  the  electronics   industry
         specifically

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

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

-        the high average selling price and long sales cycle for SVR products

-        the relatively small number of orders per quarter

-        dependence on sales to a limited number of large customers

-        timing of receipt of orders

-        successful product introduction

-        acceptance of our products and increased competition

                                 Page 16 of 23
<PAGE>

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

International  Sales.  International  sales,  primarily  in  Japan  and  Taiwan,
accounted  for  approximately  3% and 5% of the total revenue in fiscal 2001 and
2000,  respectively.   Declining  revenues  from  international  sales  resulted
primarily  from closure of our Tokyo office in December  1998, and Taiwan office
in March 1999 brought about,  in part, by the reduction in capital  expenditures
by semiconductor  manufacturers,  particularly in Asia and increased competition
in the EDA software  market.  We plan for  international  sales to account for a
portion  of revenue  during  fiscal  2002,  as had been the case prior to fiscal
2000. However, this revenue involves a number of inherent risks, including:


-        economic downturn in the electronics industry in Asia

-        traditionally slower adoption of our products internationally

-        general strikes or other disruptions in working conditions

-        generally longer receivables collection periods

-        unexpected  changes in or  impositions  of  legislative  or  regulatory
         requirements

-        reduced protection for intellectual property rights in some countries

-        potentially adverse taxes and other trade barriers

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

-        the market acceptance of a time-based licensing model

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

Competition.  The EDA software  market in which Silicon  Valley  Research,  Inc.
competes is intensely  competitive and subject to rapid technological change. We
currently face competition from EDA vendors,  including Cadence, which currently
holds the dominant share of the market for integrated  circuit  physical  design
software,  Avant!  and Synopsys.  These EDA vendors have  significantly  greater
financial,  technical and marketing  resources,  greater name  recognition and a
larger  installed  customer base than us. These companies also have  established
relationships  with  current  and  potential  customers  of ours and can  devote
substantial  resources aimed at preventing us from enhancing  relationships with
existing customers or establishing  relationships with potential  customers.  We
believe that competitive factors in the EDA software market include:

-        product price and performance

-        support of industry standards

-        ease of use and product enhancement

-        delivery schedule

-        customer technical support and service

         Competition   from  other  EDA  companies  that  choose  to  enter  the
integrated circuit physical design market could present particularly  formidable
competition  due to their large  installed  customer  base and their  ability to
offer a  complete  integrated  circuit  design  solution.  We expect  additional
competition from other established and emerging companies.  In addition, the EDA
industry  has become  increasingly  concentrated  in recent years as a result of
consolidations,   acquisitions  and  strategic  alliances.  Accordingly,  it  is
possible that

                                 Page 17 of 23
<PAGE>

new competitors or alliances among  competitors could emerge and rapidly acquire
significant  market  share.  There can be no  assurance  that we will be able to
compete  successfully against current and future competitors or that competitive
pressures  faced by us will not have a material  adverse effect on our business,
operating results and financial condition.

Dependence on Key Personnel.  Our success depends to a significant extent upon a
number of key  technical  and  management  employees,  in  particular,  James O.
Benouis,  our President and Chief  Executive  Officer.  We do not currently have
"key man" life insurance on Mr. Benouis.  The loss of services of Mr. Benouis or
any other key employees could have a material  adverse effect on us. Our success
will depend in large part on our ability to attract  and retain  highly  skilled
technical,  managerial,  sales and  marketing  personnel.  Competition  for such
personnel is intense.  There can be no assurance  that we will be  successful in
retaining  our key  technical and  management  personnel  and in attracting  and
retaining the personnel we require in order to grow. We have had to defer salary
for Mr.  Benouis and other key  employees and expect to continue to do so during
the third  quarter of fiscal  2002,  which  could lead them to  terminate  their
employment relationship with us.

Proprietary  Rights.  We rely on  contract,  trade secret and  copyright  law to
protect our technology. Competitors may develop similar or superior technologies
or duplicate SVR technology.  We generally enter into confidentiality or license
agreements with our employees,  distributors and customers,  and limit access to
and  distribution  of  SVR  software,   documentation   and  other   proprietary
information. Despite these precautions, it is possible for a third party to copy
or otherwise obtain and use SVR products or technology without authorization, or
to develop similar technology  independently.  In addition,  effective copyright
and trade protection may be unavailable or limited in certain foreign countries.

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

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

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

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

         In December  1999,  the SEC issued  Staff  Accounting  Bulletin No. 101
("SAB 101"),  Revenue  Recognition in Financial  Statements." SAB 101 summarizes
certain of the SEC's views in applying generally

                                 Page 18 of 23
<PAGE>

accepted accounting  principles to revenue recognition in financial  statements.
SAB 101 was adopted  during the year ended March 31,  2001.  The adoption of SAB
101 did not have a  material  effect  on the  Company's  financial  position  or
results of operations.

ITEM 3. Quantitative and Qualitative Disclosure about market risk

Not Applicable

                                 Page 19 of 23
<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings:

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

        In March  2001,  the  Company  filed suit  against a customer to recover
        approximately  $220,000  for  amounts  unpaid  for a license  sale.  The
        customer has  counterclaimed  the following causes of action:  breach of
        contract, breach of warranty and negligent misrepresentation. On October
        31, 2001, the Company settled the dispute with its customer. In exchange
        for a mutual release, the customer paid $60,000 to SVR in November 2001.

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

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

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

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

        Avant! Corporation requested an extension to respond to SVR's complaint,
        which was  originally  due on September 10, 2001. SVR did not oppose the
        judge's granting to Avant! of a thirty day extension requiring Avant! to
        respond to SVR's  lawsuit by October 10, 2001.  Avant!  Corporation  has
        filed an answer to the two claims in the SVR lawsuit  against it that it
        had not moved to dismiss.  In its answer,  Avant! denied that its use of
        the  Cadence  source  code in  products  sold in  competition  with  SVR
        constituted  tortious   interference  with  SVR's  prospective  business
        advantage,   and  it  denies  that  its  marketing  of  those   products
        constituted false advertising or unfair competition against SVR.

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

        Copies of the court  documents  and the timetable for the lawsuit can be
        found on the SVR website at www.svri.com.

                                 Page 20 of 23

<PAGE>


Item 2. Changes in Securities and Use of Proceeds:

        During July, the Company received $50,000 cash in a private placement of
        588,237 shares of Common Stock.  The private  placement  relied upon the
        exemption  from  registration  provided  by Section  4(2) of the Federal
        Securities Act of 1933, as amended. No underwriters were employed.

        On July 31,  2001,  the Company  issued a Warrant  Reduction  Offer (the
        "Offer") to investors who held warrants to purchase shares of SVR Common
        Stock  ("Warrants")  at an exercise price of $0.37 per share (the "$0.37
        Warrants").  Under the Offer,  such  investors were able to exercise the
        $0.37 Warrants at a reduced price of $0.055 per share. The Offer expired
        on August 6, 2001.  270,000 Warrants were exercised at $0.055 per share,
        raising $15,000.

        The Company  issued  106,000  shares of Common Stock valued at $8,500 in
        exchange for  services.  The  issuance  relied upon the  exemption  from
        registration  provided by Section 4(2) of the Federal  Securities Act of
        1933, as amended. No underwriters were employed.

Item 3. Defaults Upon Senior Securities: Not Applicable

Item 4. Submission of Matters to a Vote of Securities Holders: Not Applicable

Item 5. Other Information: Not Applicable

                                 Page 21 of 23

<PAGE>


Item 6. Exhibits and Reports on Form 8-K:


                                  (A) Exhibits:

Exhibit
Number                       Description of Exhibit

(a)(1)  The  financial  statements  filed as part of this  Report  at Item 1 are
        listed in the Index to  Financial  Statements  and  Financial  Statement
        Schedules on page 2 of this Report.

(a)(2)  The  following  exhibits  are filed with this  Quarterly  Report on Form
        10-QSB:

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

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

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

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

                            (B) Reports on Form 8-K:

No Reports on Form 8-K were filed during the quarter covered by this report.

                                 Page 22 of 23
<PAGE>

                                    SIGNATURE

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


                                         SILICON VALLEY RESEARCH, INC.



Date: November 14, 2001                  /s/ James O. Benouis
                                         ---------------------------------------
                                         James O. Benouis
                                         President and
                                         Chief Executive Officer


                                         (Chief Financial and Accounting
                                         Officer)

                                 Page 23 of 23