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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-Q



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|   |  |                                                                                                 
|-- |  | ------------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the quarterly period ended June 28,
    2002                                                
|  
|or
|  
|o  |  | 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 000-31231

Repeater Technologies, Inc.

(Exact name of Registrant as specified in its
charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 77-0535658                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

1150 Morse Avenue

Sunnyvale, California 94089


(Address of principal executive
offices)


(408) 747-1900

(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 periods
that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days.     Yes þ          No o

The number of shares of the Registrants
common stock outstanding as of August 1, 2002 was
23,914,052.



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TABLE OF CONTENTS



|                              |                                                                                               |                                                      |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                              |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures of Market Risk                              
|PART II. OTHER INFORMATION   
|                              | 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 Security Holders                                  
|                              | Item 5. Other Information                                                                    
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                    
|EXHIBIT INDEX                
|EXHIBIT 10.19                
|EXHIBIT 99.1                 



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INDEX

|                                   |  |                                                                                           |    |      |    | 
|---------------------------------- |  | ----------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                   |  |                                                                                           |    | Page
|                                   |  |                                                                                           |    |     
|PART I.  FINANCIAL
    INFORMATION
|Item 1.                            |  | Financial Statements (unaudited)                                                          |    |      | 2  | 
|                                   |  | Condensed Consolidated Balance Sheets                                                     |    |      | 2  | 
|                                   |  | Condensed Consolidated Statements of Operations                                           |    |      | 3  | 
|                                   |  | Condensed Consolidated Statements of Cash Flows                                           |    |      | 4  | 
|                                   |  | Notes to Condensed Consolidated Financial
    Statements                                  |    |      | 5  | 
|Item 2.                            |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |    |      | 11 | 
|                                   |  | Risks That Could Affect Future Results                                                    |    |      | 21 | 
|Item 3.                            |  | Quantitative and Qualitative Disclosures of
    Market Risk                               |    |      | 31 | 
|PART II.  OTHER
    INFORMATION   
|Item 1.                            |  | Legal Proceedings                                                                         |    |      | 31 | 
|Item 2.                            |  | Changes in Securities and Use of Proceeds                                                 |    |      | 32 | 
|Item 3.                            |  | Defaults Upon Senior Securities                                                           |    |      | 32 | 
|Item 4.                            |  | Submission of Matters to a Vote of Security
    Holders                                   |    |      | 32 | 
|Item 5.                            |  | Other Information                                                                         |    |      | 32 | 
|Item 6.                            |  | Exhibits and Reports on Form 8-K                                                          |    |      | 33 | 
|Signature                          |  |                                                                                           | 34 |     
|Exhibit Index                      |  |                                                                                           | 35 |     

1



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##### Table of Contents






PART I.     FINANCIAL
INFORMATION




Item 1.     Financial
Statements

REPEATER TECHNOLOGIES, INC.






CONDENSED CONSOLIDATED BALANCE
SHEETS


|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |          |        | 
|---------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | --------- | ------ |  | ----- | -------- | ------ | 
|                                         |                                                                                                                                                                                     | June 28,                                   |       | March 29,
|                                         |                                                                                                                                                                                     | 2002                                       |       | 2002     
|                                         |                                                                                                                                                                                     |                                            |       |          
|                                         |                                                                                                                                                                                     |                                           
|                                         |                                                                                                                                                                                     | (In thousands, except share               
|                                         |                                                                                                                                                                                     | and per share data)                       
|                                         |                                                                                                                                                                                     | (Unaudited)                               
|ASSETS                                  
|Current assets:                          |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         | Cash and cash equivalents                                                                                                                                                           |                                            | $     | 2,467     |        |  | $     | 5,250    |       
|                                         | Accounts receivable, net                                                                                                                                                            |                                            |       | 807       |        |  |       | 1,628    |       
|                                         | Inventories, net                                                                                                                                                                    |                                            |       | 4,498     |        |  |       | 4,184    |       
|                                         | Other current assets                                                                                                                                                                |                                            |       | 192       |        |  |       | 424      |       
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         |                                                                                                                                                                                     | Total current assets                       |       |           | 7,964  |  |       |          | 11,486 | 
|Service parts, net                       |                                                                                                                                                                                     |                                            | 845   |           |        |  | 960   |         
|Property and equipment, net              |                                                                                                                                                                                     |                                            | 2,657 |           |        |  | 2,973 |         
|Other assets                             |                                                                                                                                                                                     |                                            | 68    |           |        |  | 95    |         
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         |                                                                                                                                                                                     | Total assets                               |       | $         | 11,534 |  |       | $        | 15,514 | 
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|LIABILITIES AND STOCKHOLDERS
    EQUITY
|Current liabilities:                     |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         | Accounts payable                                                                                                                                                                    |                                            | $     | 2,231     |        |  | $     | 3,811    |       
|                                         | Accrued compensation                                                                                                                                                                |                                            |       | 409       |        |  |       | 375      |       
|                                         | Other accrued liabilities                                                                                                                                                           |                                            |       | 1,127     |        |  |       | 1,263    |       
|                                         | Deferred revenue                                                                                                                                                                    |                                            |       | 154       |        |  |       | 150      |       
|                                         | Current portion of capital lease obligations                                                                                                                                        |                                            |       | 82        |        |  |       | 141      |       
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         |                                                                                                                                                                                     | Total current liabilities                  |       |           | 4,003  |  |       |          | 5,740  | 
|Deferred revenue, net of current portion |                                                                                                                                                                                     |                                            | 762   |           |        |  | 852   |         
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         |                                                                                                                                                                                     | Total liabilities                          |       |           | 4,765  |  |       |          | 6,592  | 
|Stockholders equity:                    |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         | Common Stock, $0.001 par value; 70,000,000 shares
    authorized; 23,914,052 and 23,880,133 shares issued and
    outstanding at June 28, 2002 and March 29, 2002,
    respectively |                                            |       | 24        |        |  |       | 24       |       
|                                         | Additional paid in capital                                                                                                                                                          |                                            |       | 109,819   |        |  |       | 109,830  |       
|                                         | Unearned stock-based compensation                                                                                                                                                   |                                            |       | (80       | )      |  |       | (234     | )     
|                                         | Accumulated deficit                                                                                                                                                                 |                                            |       | (102,994  | )      |  |       | (100,698 | )     
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         |                                                                                                                                                                                     | Total stockholders equity                 |       |           | 6,769  |  |       |          | 8,922  | 
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         
|                                         |                                                                                                                                                                                     | Total liabilities and stockholders equity |       | $         | 11,534 |  |       | $        | 15,514 | 
|                                         |                                                                                                                                                                                     |                                            |       |           |        |  |       |         

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

2



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##### Table of Contents



REPEATER TECHNOLOGIES, INC.




CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                      |                            |                          |        |          |       |   |        |       |       | 
|--------------------------------------------------------------------- | -------------------------- | ------------------------ | ------ | -------- | ----- | - | ------ | ----- | ----- | 
|                                                                      |                            |                         
|                                                                      |                            | Three Months Ended      
|                                                                      |                            |                         
|                                                                      |                            | June 28,                 |        | June 29,
|                                                                      |                            | 2002                     |        | 2001    
|                                                                      |                            |                          |        |         
|                                                                      |                            |                         
|                                                                      |                            | (In thousands, except   
|                                                                      |                            | per share data)         
|                                                                      |                            | (Unaudited)             
|Net revenues                                                          |                            | $                        | 1,411  |          |       | $ | 3,902  |      
|Cost of revenues                                                      |                            |                          | 1,305  |          |       |   | 3,723  |      
|                                                                      |                            |                          |        |          |       |   |        |      
|Gross profit                                                          |                            |                          | 106    |          |       |   | 179    |      
|                                                                      |                            |                          |        |          |       |   |        |      
|Operating expenses:                                                   |                            |                          |        |          |       |   |        |      
|                                                                      | Research and development   |                          |        | 602      |       |   |        | 2,015 |      
|                                                                      | Sales and marketing        |                          |        | 887      |       |   |        | 1,756 |      
|                                                                      | General and administrative |                          |        | 901      |       |   |        | 1,228 |      
|                                                                      |                            |                          |        |          |       |   |        |      
|                                                                      |                            | Total operating expenses |        |          | 2,390 |   |        |       | 4,999 | 
|                                                                      |                            |                          |        |          |       |   |        |      
|Loss from operations                                                  |                            |                          | (2,284 | )        |       |   | (4,820 | )    
|Other income (expense), net                                           |                            |                          | (12    | )        |       |   | 302    |      
|                                                                      |                            |                          |        |          |       |   |        |      
|Net loss                                                              |                            | $                        | (2,296 | )        |       | $ | (4,518 | )    
|                                                                      |                            |                          |        |          |       |   |        |      
|Net loss per share  basic and diluted                                |                            | $                        | (0.10  | )        |       | $ | (0.20  | )    
|                                                                      |                            |                          |        |          |       |   |        |      
|Shares used in net loss per share calculation
     basic and diluted |                            |                          | 23,324 |          |       |   | 22,891 |      
|                                                                      |                            |                          |        |          |       |   |        |      

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

3



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REPEATER TECHNOLOGIES, INC.






CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                                |                                                          |                           |                                                         |          |        |        |        |      |        |        |  
|------------------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------- | ------------------------------------------------------- | -------- | ------ | ------ | ------ | ---- | ------ | ------ | -
|                                                                                |                                                          |                          
|                                                                                |                                                          | Three Months Ended       
|                                                                                |                                                          |                          
|                                                                                |                                                          | June 28,                  |                                                         | June 29,
|                                                                                |                                                          | 2002                      |                                                         | 2001    
|                                                                                |                                                          |                           |                                                         |         
|                                                                                |                                                          |                          
|                                                                                |                                                          | (In thousands)           
|                                                                                |                                                          | (Unaudited)              
|Cash flows used in operating activities:                                        |                                                          |                           |                                                         |          |        |        |        |     
|Net loss                                                                        |                                                          | $                         | (2,296                                                  | )        |        | $      | (4,518 | )   
|Adjustments to reconcile net loss to net cash
    used in operating activities: |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                | Depreciation and amortization                            |                           |                                                         | 447      |        |        |        | 564  |       
|                                                                                | Provision for losses on accounts receivable              |                           |                                                         |         |        |        |        | 78   |       
|                                                                                | Provision for writedowns on inventories                  |                           |                                                         |         |        |        |        | 208  |       
|                                                                                | Amortization of unearned stock-based compensation        |                           |                                                         | 139      |        |        |        | 139  |       
|                                                                                | Amortization of debt discount                            |                           |                                                         |         |        |        |        | 44   |       
|                                                                                | Gain on sale of Gwydion development project              |                           |                                                         |         |        |        |        | (357 | )     
|                                                                                | Loss on sale of property and equipment                   |                           |                                                         | 18       |        |        |        |     |       
|                                                                                | Changes in assets and liabilities:                       |                           |                                                         |          |        |        |        |      |       
|                                                                                |                                                          | Accounts receivable, net  |                                                         |          | 821    |        |        |      | 94     |       
|                                                                                |                                                          | Inventories, net          |                                                         |          | (314   | )      |        |      | (857   | )     
|                                                                                |                                                          | Other assets              |                                                         |          | 259    |        |        |      | 155    |       
|                                                                                |                                                          | Accounts payable          |                                                         |          | (1,580 | )      |        |      | (1,026 | )     
|                                                                                |                                                          | Accrued compensation      |                                                         |          | 34     |        |        |      | (191   | )     
|                                                                                |                                                          | Other accrued liabilities |                                                         |          | (136   | )      |        |      | (319   | )     
|                                                                                |                                                          | Deferred revenue          |                                                         |          | (86    | )      |        |      | (681   | )     
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                |                                                          |                           | Net cash used in operating activities                   |          |        | (2,694 | )      |      |        | (6,667 | )
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|Cash flows from investing activities:                                           |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                | Proceeds from sale of Gwydion development project        |                           |                                                         |         |        |        |        | 969  |       
|                                                                                | Proceeds from the disposal of property and
    equipment |                           |                                                         | 13       |        |        |        |     |       
|                                                                                | Purchase of field service parts                          |                           |                                                         | (29      | )      |        |        | (234 | )     
|                                                                                | Purchase of property and equipment                       |                           |                                                         | (18      | )      |        |        | (332 | )     
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                |                                                          |                           | Net cash (used in)/provided by investing
    activities |          |        | (34    | )      |      |        | 403    |  
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|Cash flows from financing activities:                                           |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                | Principal payments on notes payable                      |                           |                                                         |         |        |        |        | (332 | )     
|                                                                                | Payments on capital lease obligations                    |                           |                                                         | (59      | )      |        |        | (108 | )     
|                                                                                | Issuance of common stock                                 |                           |                                                         | 4        |        |        |        | 137  |       
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                |                                                          |                           | Net cash used in financing activities                   |          |        | (55    | )      |      |        | (303   | )
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|Net decrease in cash and cash equivalents                                       |                                                          |                           | (2,783                                                  | )        |        |        | (6,567 | )   
|Cash and cash equivalents at beginning of the
    period                        |                                                          |                           | 5,250                                                   |          |        |        | 26,084 |     
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|Cash and cash equivalents at end of the period                                  |                                                          | $                         | 2,467                                                   |          |        | $      | 19,517 |     
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|Supplemental Disclosure of Cash Flow Information:                               |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                | Cash paid for interest                                   |                           | $                                                       | 2        |        |        | $      | 63   |       
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     
|                                                                                | Taxes paid                                               |                           | $                                                       | 4        |        |        | $      |     |       
|                                                                                |                                                          |                           |                                                         |          |        |        |        |     

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

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REPEATER TECHNOLOGIES, INC.






NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


June 28, 2002


(Unaudited)


Organization

Repeater Technologies, Inc. (the
Company), formerly Peninsula Wireless
Communications, Inc., was formed in October 1983. The
Companys name was changed to Repeater Technologies, Inc.
in December 1996. The Companys principal activity is the
development, marketing and selling of wireless communications
network equipment based on the Code Division Multiple Access
(CDMA) technology standard. The Company
reincorporated in the State of Delaware on May 18, 2000.

Basis of Presentation

The accompanying unaudited condensed consolidated
financial statements as of June 28, 2002 and for the
three-month periods ended June 28, 2002 and June 29, 2001
have been prepared by the Company in accordance with the rules
and regulations of the Securities and Exchange Commission. The
amounts as of March 29, 2002 have been derived from the
Companys annual audited financial statements. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America
and have been condensed or omitted in accordance with such rules
and regulations. In the opinion of management, the accompanying
unaudited financial statements reflect all adjustments,
consisting only of normal recurring adjustments, necessary to
present fairly the financial position of the Company and its
results of operations and cash flows. These financial statements
should be read in conjunction with the annual audited financial
statements and notes as of and for the year ended March 29,
2002, included in the Companys Annual Report on
Form 10-K as filed with the Securities and Exchange
Commission on June 27, 2002.

The results of operations for the three months
ended June 28, 2002 are not necessarily indicative of the
results that may be expected for the year ending March 28,
2003 or any other future interim period, and the Company makes
no representations related thereto.

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

The Company has a history of operating losses and
operates in an industry sector that is subject to significant
and rapid shifts in demand and changes in technology. The
Company completed its initial public offering in August 2000,
which raised $42.3 million, net of expenses. However, the
Company has incurred substantial losses and negative cash flows
from operations since inception. For the years ended
March 30, 2001 and March 29, 2002, the Company
incurred losses from operations of approximately
$23.6 million and $21.2 million, respectively, and
negative cash flows from operations of approximately
$21.3 million and $17.4 million, respectively. These
circumstances raise substantial doubt about the Companys
ability to continue as a going concern. In regard to this
matter, management plans to continue to reduce cash used in
operating activities. Three workforce reductions were
implemented during the fiscal year ended March 29, 2002 and
one in July 2002. Management also plans to increase the sales
volume of its Network Repeaters and realize higher margins on
its new dual-channel products. If these efforts prove to be
insufficient, certain discretionary expenditures could be
further reduced. The Company may also need additional financing
in the current year. Failure to generate sufficient revenues,
raise additional capital or reduce certain discretionary
spending could have a material adverse effect on the
Companys ability to continue as a going concern and to
achieve its intended business objectives. The financial
statements do not include any adjustments that may be necessary
if the Company is unable to continue as a going concern.

5



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REPEATER TECHNOLOGIES, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Revenue Recognition

The Company recognizes revenue when four basic
criteria are met: (1) persuasive evidence of an arrangement
exists, generally in the form of a contract or a purchase order;
(2) delivery has occurred or services have been rendered;
(3) the fee is fixed and determinable; and
(4) collectibility is reasonably assured.

The Companys revenues are derived primarily
from the sale of the Companys hardware products and
accessories. Product revenue is recognized upon shipment or
delivery to the customer, depending on the terms of the sale.
Where a purchase order or a sales agreement contains a customer
acceptance clause, the Company defers revenue recognition until
the acceptance criteria have been met.

Revenues from services, including network design,
training and installation support, are recognized when services
are performed.

Revenues from Network Management Systems software
are recognized upon completion of installation, provided that no
significant vendor obligations remain and collectibility is
reasonably assured. To date, revenue from software products has
been immaterial.

Sales to
distributors Revenues
generated from certain foreign countries are derived from sales
to distributors. The Company does not grant return rights,
exchange rights or price protection rights. Payment terms are on
average 60 days after invoice and the Company usually
requires an irrevocable letter of credit, a down payment or
credit insurance. Revenue from distributors is recognized upon
shipment or delivery to the distributor, depending on sales
terms.

Sales through
agents The Companys
sales agents act strictly as sales representatives and receive
commission which is recorded in sales and marketing expenses.
The Company invoices the end user directly and revenue is
recognized upon shipment or delivery to the end-user, depending
upon the terms of the sale.

At the time of sale, the Company provides for the
estimated cost of meeting product warranty and hot-line
technical support. When warranty and post-contract customer
support obligations exist beyond one year, the related revenue
is deferred and recognized ratably over the term of the
arrangement.

Inventories

Inventories are stated at the lower of cost or
market, with cost determined using the first-in, first-out
(FIFO) method. Appropriate allowances are made to
reduce the value of inventories to net realizable value, where
this is below cost. These allowances are based on
managements judgment, when management determines that
inventories may be slow moving or obsolete.

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 141,
Business Combinations. SFAS No. 141 requires
the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the
pooling-of-interests method. The Company did not enter into any
business combinations after June 30, 2001; therefore, the
adoption of SFAS No. 141 has not had a significant impact
on the Companys financial statements.

In July 2001, the FASB issued SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 142 requires, among other things, the discontinuance of
goodwill amortization and the testing for impairment of goodwill
at least annually. The Company currently does not carry goodwill
on its financial statements; therefore, the adoption of SFAS
No. 142 has not had a material impact on the Companys
financial statements.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 supercedes SFAS
No. 121, Accounting for the Impairment of Long-Lived

6



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REPEATER TECHNOLOGIES, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Assets and for Long-Lived Assets to Be Disposed
Of. SFAS No. 144 applies to all long-lived assets
(including discontinued operations) and consequently amends
Accounting Principles Board opinion No. 30, Reporting
Results of Operations Reporting the Effects of Disposal of a
Segment of a Business. SFAS No. 144 develops one
accounting model for long-lived assets that are to be disposed
of by sale. SFAS No. 144 requires that long-lived assets
that are to be disposed of by sale be measured at the lower of
net book value or fair value less cost to sell. Additionally,
SFAS No. 144 expands the scope of discontinued operations
to include all components of an entity with operations that
(i) can be distinguished from the rest of the entity and
(ii) will be eliminated from the ongoing operations of the
entity in a disposal transaction. SFAS No. 144 is effective
for financial statements issued for fiscal years beginning after
December 15, 2001. The Company does not expect the adoption
of SFAS No. 144 to have a significant impact on the
Companys financial statements.

Concentration of Credit Risk

The Companys cash and cash equivalents are
maintained at major US financial institutions. Deposits in these
institutions may exceed the amount of insurance provided for
such deposits.

The Companys customers are providers of
wireless communications services. The Company performs periodic
credit evaluations of these customers and generally does not
require collateral for its domestic customers. For certain
international customers, the Company usually requires letters of
credit prior to shipment. The Company maintains reserves for
potential credit losses and such losses have historically been
within managements expectations.

During the three months ended June 28, 2002,
two customers accounted for approximately 30% and 27% of net
revenues. During the three months ended June 29, 2001, four
customers accounted for approximately 21%, 16%, 13% and 11% of
net revenues. As of June 28, 2002, two customers accounted
for approximately 34% and 21% of total receivables. As of
March 29, 2002, three customers accounted for approximately
31%, 22% and 13% of total receivables.

Net Loss Per Share

Basic net loss per share is computed by dividing
net loss available to common stockholders by the weighted
average number of vested common shares outstanding for the
period. Diluted net loss per share is computed giving effect to
all dilutive potential common shares, including options and
warrants. Options and warrants were not included in the
computation of diluted net loss per share for the three-month
periods ended June 28, 2002 and June 29, 2001 because
the effect would have been anti-dilutive. A reconciliation of
the numerator and denominator used in the calculation of
historical basic and diluted net loss per share is as follows
(in thousands, except per share data):

|                                               |                                                            |                    |        |          |   |   |        |        |  
|---------------------------------------------- | ---------------------------------------------------------- | ------------------ | ------ | -------- | - | - | ------ | ------ | -
|                                               |                                                            |                   
|                                               |                                                            | Three Months Ended
|                                               |                                                            |                   
|                                               |                                                            | June 28,           |        | June 29,
|                                               |                                                            | 2002               |        | 2001    
|                                               |                                                            |                    |        |         
|Numerator:                                     |                                                            |                    |        |          |   |   |        |       
|Net loss                                       |                                                            | $                  | (2,296 | )        |   | $ | (4,518 | )     
|                                               |                                                            |                    |        |          |   |   |        |       
|Denominator:                                   |                                                            |                    |        |          |   |   |        |       
|                                               | Weighted average shares outstanding                        |                    |        | 23,897   |   |   |        | 23,464 |  
|                                               | Weighted average unvested shares subject to
    repurchase |                    |        | (573     | ) |   |        | (573   | )
|                                               |                                                            |                    |        |          |   |   |        |       
|Denominator for basic and diluted calculations |                                                            |                    | 23,324 |          |   |   | 22,891 |       
|                                               |                                                            |                    |        |          |   |   |        |       
|Net loss per share-basic and diluted           |                                                            | $                  | (0.10  | )        |   | $ | (0.20  | )     
|                                               |                                                            |                    |        |          |   |   |        |       

7



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##### Table of Contents



REPEATER TECHNOLOGIES, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following securities have not been included
in the computation of diluted net loss per share as they are
anti-dilutive (in thousands):

|                      |  |          |       |          |  |  |       | 
|--------------------- |  | -------- | ----- | -------- |  |  | ----- | 
|                      |  | June 28, |       | June 29,
|                      |  | 2002     |       | 2001    
|                      |  |          |       |         
|Options outstanding   |  |          | 3,988 |          |  |  | 5,494 | 
|Warrants outstanding  |  |          | 250   |          |  |  | 250   | 
|Unvested common stock |  |          | 573   |          |  |  | 573   | 
|                      |  |          |       |          |  |  |       | 
|                      |  |          | 4,811 |          |  |  | 6,317 | 
|                      |  |          |       |          |  |  |       | 

Balance Sheet Components (in
thousands)

Accounts receivable, net:

|                                                |  |          |      |           |  |   |       |  
|----------------------------------------------- |  | -------- | ---- | --------- |  | - | ----- | -
|                                                |  | June 28, |      | March 29,
|                                                |  | 2002     |      | 2002     
|                                                |  |          |      |          
|Gross accounts receivable                       |  | $        | 979  |           |  | $ | 1,800 |  
|Less: allowance for bad debts and sales returns |  |          | (172 | )         |  |   | (172  | )
|                                                |  |          |      |           |  |   |       |  
|                                                |  | $        | 807  |           |  | $ | 1,628 |  
|                                                |  |          |      |           |  |   |       |  

Inventories, net:

|                                                  |  |          |        |           |  |   |        |  
|------------------------------------------------- |  | -------- | ------ | --------- |  | - | ------ | -
|                                                  |  | June 28, |        | March 29,
|                                                  |  | 2002     |        | 2002     
|                                                  |  |          |        |          
|Raw materials                                     |  | $        | 1,936  |           |  | $ | 1,556  |  
|Work in process                                   |  |          | 625    |           |  |   | 1,298  |  
|Finished goods                                    |  |          | 8,367  |           |  |   | 7,786  |  
|                                                  |  |          |        |           |  |   |        |  
|                                                  |  |          | 10,928 |           |  |   | 10,640 |  
|Less: allowance for excess and obsolete inventory |  |          | (6,430 | )         |  |   | (6,456 | )
|                                                  |  |          |        |           |  |   |        |  
|                                                  |  | $        | 4,498  |           |  | $ | 4,184  |  
|                                                  |  |          |        |           |  |   |        |  



| |                   
| | ------------------
| | Disposal of Assets

On April 21, 2001, the Company entered into
an agreement to sell substantially all of the assets of The
Gwydion Company, LLC (Gwydion) product development
project. The consideration received for the sale was
approximately $969,000 in cash. The Company recorded a gain on
sale of approximately $357,000 in the first quarter of fiscal
year ending March 29, 2002 in relation to the sale of
substantially all of the assets of the Gwydion development
project.



| |              
| | -------------
| | Contingencies

In November 1999, in connection with the
Companys acquisition of substantially all of the assets of
Gwydion, the Company issued 573,334 shares of the Companys
common stock to the members of Gwydion, Harry Ayvazian and Gary
Grimes. These shares were to be held in an escrow account and
subject to the Companys right of repurchase for $1.00 in
the aggregate until certain performance criteria were met. In
May 2001, the Company filed an escrow claim with Gwydion and the
escrow agent to assert the Companys right under the
Gwydion acquisition agreement to repurchase the 573,334 shares
issued as consideration. Gwydion and its members have disputed
this claim and on September 17, 2001 filed direct and
stockholder derivative lawsuits in the Superior Court of the
State of California for the County of Santa Clara against the
Company

8



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##### Table of Contents



REPEATER TECHNOLOGIES, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

and Kenneth L. Kenitzer, Timothy A. Marcotte,
Chris L. Branscum, John E. Bosch, Bandel Carano, Richard G.
Grey, Perry M. LaForge and Alessandro A. Piol in their
capacities as the Companys current and former directors
and officers. The Company initially reported these legal
proceedings in the Companys Quarterly Report on
Form 10-Q for the quarter ended September 28, 2001 and
subsequently reported them in the Companys Quarterly
Report on Form 10-Q for the quarter ended December 28,
2001 and the Companys Annual Report on Form 10-K for
the fiscal year ended March 29, 2002.

In the stockholder derivative action, the
plaintiffs alleged that, among other things, the defendants
(i) made untrue representations in connection with the
acquisition agreement, (ii) entered into the acquisition
agreement with no intention of committing the resources
necessary to the success of the Gwydion project, and
(iii) contributed to the decrease in value of the
Companys stock; claimed fraud, intentional and negligent
misrepresentation, and breach of fiduciary duty; and requested
damages and attorneys fees. In the direct lawsuit, the
plaintiffs allege that, among other things, the defendants
engaged in conduct that precluded the plaintiffs from fulfilling
their obligations under the Gwydion acquisition agreement, claim
breach of contract and fraud, and request compensatory and
punitive and/or exemplary damages, costs and attorneys
fees.

On January 10, 2002, the Companys
challenge to the stockholder derivative lawsuit was sustained
without leave to amend and on January 17, 2002, the court
entered judgment in favor of the Company and against Gwydion and
its members. The direct suit for breach of contract and fraud
remains pending. While the Company believes that the
plaintiffs direct claims are without merit and intends to
vigorously defend itself against them, the Company cannot
predict the ultimate outcome of the pending action.

Litigation

On November 16, 2001, the Company, Chris L.
Branscum, Kenneth Kenitzer, Timothy Marcotte and certain
underwriters of the Companys initial public offering
(IPO) of its common stock were named as defendants
in a class action shareholder complaint filed in the United
States District Court for the Southern District of New York, now
consolidated under the caption In re Repeater Technologies, Inc.
Initial Public Offering Securities Litigation, Case
No. 01-CV-10140. This lawsuit purports to bring suit on
behalf of all purchasers of the Companys common stock
between August 8, 2000, the effective date of the
Companys IPO, and December 6, 2000. In the complaint,
the plaintiffs allege that the Company, certain of its officers
and directors and the underwriters of its IPO violated the
federal securities laws because the Companys IPO
registration statement and prospectus contained untrue
statements of material fact or omitted material facts regarding
the compensation to be received by, and the stock allocation
practices of, the IPO underwriters. The plaintiffs seek
unspecified monetary damages and other relief. Similar
complaints were filed in the same Court against hundreds of
other public companies that conducted IPOs of their common stock
in the late 1990s (the IPO Lawsuits).

On August 8, 2001, the IPO Lawsuits were
consolidated for pretrial purposes before United States Judge
Shira Scheindlin of the Southern District of New York. Judge
Scheindlin held an initial case management conference on
September 7, 2001, at which time she ordered, among other
things, that the time for all defendants to respond to any
complaint be postponed until further order of the Court. Thus,
the Company has not been required to answer the complaint, and
no discovery has been served on the Company.

In accordance with Judge Scheindlins orders
at further status conferences in March and April 2002, the
appointed lead plaintiffs counsel filed amended,
consolidated complaints in the IPO Lawsuits on April 19,
2002. Defendants then filed a global motion to dismiss the IPO
Lawsuits on July 15, 2002, as to which the Court does not
expect to issue a decision until at least November 2002. The
Company believes that this lawsuit is without merit and intends
to defend against it vigorously. The Company initially reported
these legal proceedings in its Quarterly Report on
Form 10-Q for the quarter ended December 28, 2001 and
subsequently reported them in its Annual Report on
Form 10-K for the fiscal year ended March 29, 2002.

9



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##### Table of Contents



REPEATER TECHNOLOGIES, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

China Order

On October 22, 2001, the Company announced
that the delivery of products against an order worth
$11.0 million by the Companys distributor in China
would be extended for a significant length of time and will most
likely be in volumes substantially lower than originally
anticipated. To date, the Company has shipped products with a
value of $2.2 million against the $11.0 million order.
The Company is expecting that the order from the Companys
distributor will ultimately be for substantially less than
$11.0 million and the delivery schedule will be extended
for a long period of time. The Company had placed a
$5.6 million purchase order with the Companys
contract manufacturer in relation to the order received from the
Companys distributor in China. The Company has
subsequently cancelled a portion of this order. At June 28,
2002, the Company had $2.9 million in inventory in relation
to this purchase order.

Commitments

The Companys contractual obligations at
June 28, 2002 were as follows:

|                                   |  |                        |       |           |  |       |     |  |  |   |       | 
|---------------------------------- |  | ---------------------- | ----- | --------- |  | ----- | --- |  |  | - | ----- | 
|                                   |  |                       
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  | Less Than 1 Year       |       | 1-3 Years |  | Total
|                                   |  |                        |       |           |  |      
|                                   |  |                       
|                                   |  | (In thousands)        
|Contractual Obligations            |  |                        |       |           |  |       |     |  |  |   |       | 
|Capital-lease obligations          |  | $                      | 82    |           |  | $     |    |  |  | $ | 82    | 
|Operating leases                   |  |                        | 502   |           |  |       | 488 |  |  |   | 990   | 
|Unconditional purchase obligations |  |                        | 614   |           |  |       |    |  |  |   | 614   | 
|                                   |  |                        |       |           |  |       |     |  |  |   |       | 
|Total contractual obligations      |  | $                      | 1,198 |           |  | $     | 488 |  |  | $ | 1,686 | 
|                                   |  |                        |       |           |  |       |     |  |  |   |       | 

10



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##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

You should read the following information in
conjunction with the historical financial information and notes
thereto included in our Annual Report on Form 10-K for the
year ended March 29, 2002, which was filed with the
Securities and Exchange Commission on June 27, 2002. Unless
otherwise indicated, references to year ended or
year ending, or three months ended or
three months ending, refer to our fiscal year or
fiscal three months, respectively.

This Form 10-Q contains forward-looking
statements that relate to future events or our future financial
performance. In some cases, you can identify forward-looking
statements by terminology such as may,
will, should, expects,
plans, anticipates,
believes, estimates,
predicts, intends, potential
or continue or the negative of such terms or other
comparable terminology. These statements are only predictions
based on the information available to us at the time this report
was filed. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or
achievements. Our actual results could differ materially from
those anticipated in these forward-looking statements.

Overview

We develop, market and sell wireless network
equipment primarily for CDMA-based wireless communications
networks. We provide cost-effective, high-quality products for
use in suburban and rural areas, urban areas and inside office
buildings and other coverage-limited structures. Our products
have been deployed with over 70 CDMA wireless service providers
in more than ten countries. International sales accounted for
approximately 40.7%, 32.0% and 39.2% of net revenues for the
years ended March 31, 2000, March 30, 2001 and
March 29, 2002, respectively.

From our inception in 1983 through our year ended
March 31, 1996, we were primarily focused on providing
microwave frequency repeaters for long-distance
telecommunications applications and cellular repeaters for
non-CDMA-based wireless communications applications. Beginning
in our year ended March 31, 1997, we changed our strategic
focus and re-directed our resources to the development and
marketing of repeaters for wireless networks based on the CDMA
digital standard. This wireless standard offered us the
opportunity to develop a new type of repeater, which we call our
Network Repeater. In conjunction with CDMA base stations, our
Network Repeater enables wireless service providers to deploy or
extend CDMA wireless networks in non-urban areas at a
significantly reduced cost. CDMA technology is not as widely
deployed, and the customer base for CDMA-based products is not
as broad, as compared to other digital standards. Our Network
Repeaters, along with the associated network management system,
are designed specifically to operate as an integrated network
element within a CDMA wireless network, extending the coverage
area of a CDMA base station without compromising the quality of
the wireless service. We have licensed a portion of the
technology for our CDMA-based repeaters from one of our former
executives. Our ability to continue to deploy our existing
products and to develop new products depends significantly upon
this license. We shipped our first Network Repeaters for CDMA
wireless networks in May 1997.

We contract with a third-party manufacturer to
manufacture some of our products. Our third-party manufacturer
is currently Sanmina Corporation. Our manufacturer assembles
modules for us, which we test for functionality prior to
assembly into finished products. We do not have a long-term
manufacturing contract with our contract manufacturer. We have
payment obligations that extend through August 2002 for units
previously purchased under an amended settlement agreement with
our manufacturer. Our ability to use this manufacturer is
subject to minimum order volumes. Any individual purchase order
is generally not cancelable by us unless the supplier fails to
deliver in conformance with the terms of the purchase order. We
believe that our third-party contract manufacturer has the
capability to support our demand for the foreseeable future.
Although we believe that we can obtain an alternate contract
manufacturer for our products if necessary, we cannot guarantee
that such a manufacturer can be obtained on short notice or that
our products could be manufactured by an alternative
manufacturer on satisfactory terms. Any of these problems could
damage relationships with current or prospective customers,
seriously harm our operating results and revenues in a given
period and impair our ability to generate future sales.

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##### Table of Contents



We rely on a sole source of supply for several of
our significant components, including antennas, power
amplifiers, power supplies, and battery back-up power systems.
Although we believe that we can obtain alternative sources of
supply for these components, we cannot guarantee that such
sources can be secured on short notice or that components will
be available from alternative sources on satisfactory terms. Any
of these problems could damage relationships with current or
prospective customers, seriously harm our operating results and
revenues in a given period and impair our ability to generate
future sales.

We reduced our workforce by 16 employees in July
2002 to sustain our operations and align our resources with
current market conditions. The total cost incurred in relation
to this workforce reduction was approximately $116,000 and will
be recorded as payroll expense during the three months ending
September 27, 2002.

On October 22, 2001, we announced that the
delivery of products against an order worth $11.0 million
by our distributor in China would be extended for a significant
length of time and will most likely be in volumes substantially
lower than originally anticipated. To date, we have shipped
$2.2 million worth of products against the
$11.0 million order. We are expecting that the order from
our distributor will ultimately be for substantially less than
$11.0 million and the delivery schedule will be extended
for a long period of time. We had placed a $5.6 million
purchase order with our contract manufacturer in relation to the
order received from our distributor in China. We have
subsequently cancelled a portion of this order. At June 28,
2002, we had $2.9 million in inventory in relation to this
purchase order.

Since our inception, we have used stock option
programs for employees as compensation to attract strong
business and technical talent. Stock-based compensation consists
of the difference between the deemed fair market value of stock
subject to stock options and the exercise price of these
options. This difference is being amortized on an accelerated
basis over the vesting period of the grants, generally four
years. For the year ended March 29, 2002, and the
three-month period ended June 28, 2002, we recorded $38,000
and $139,000, respectively, of stock-based compensation expense
in connection with options granted to employees and consultants.

In November 2001, the Company extended an offer
to its eligible employees and directors to cancel stock options
with exercise prices greater than $0.30 per share and to
grant replacement stock options with an exercise price equal to
the quoted market price of the Companys common stock at
December 27, 2001, one day before the expiration of the
offer. On December 28, 2001, the Company granted
replacement options to purchase an aggregate of 3,143,628 shares
of its common stock at $0.29 per share to eligible employees and
directors who accepted the offer in a one-for-one exchange for
such cancelled stock options. Each replacement option will vest
monthly over one year following the date of grant and will
expire 18 months after the date of grant. The Company will
account for all such replacement options, as well as eligible
options to purchase an aggregate of 69,770 shares of common
stock which were not exchanged, under the variable accounting
method and will revalue these stock options at the end of each
reporting period until the options are exercised, forfeited, or
expire unexercised; the resulting charge will be recorded as
compensation expense. The higher the market value of the
Companys common stock, the greater the compensation
expense will be. To date we have not recorded any compensation
expense under the variable accounting method in connection with
the stock option exchange due to the low price of our common
stock.

We incurred a net loss of $2.3 million for
the three months ended June 28, 2002 and a net loss of
$4.5 million for the three months ended June 29, 2001.
Although we have been successful in reducing our cash usage rate
gradually during the past five consecutive quarters including
the three months ended June 28, 2002, we have been unable
to increase our revenues. In an effort to sustain our business,
we reduced our workforce by 17% in April 2001, 34% in October
2001, 27% in March 2002 and 40% in July 2002. We have ceased
purchases for our older single-channel products, we have
implemented a sales promotion for our older single-channel
products to reduce our inventory and we have introduced our new
dual-channel product, which we started to ship during the
quarter ended March 29, 2002. If these efforts prove to be
insufficient, we may be forced to reduce our expenditures
further by reducing our purchase commitments, reducing capital
expenditures and reducing other discretionary expenditures. Our
failure to increase the sales volume of our Network Repeaters,
realize higher margins on our new products or further reduce our
expenditures could have a

12



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##### Table of Contents



material adverse effect on our ability to
continue as a going concern and to achieve our intended business
objectives.


As part of such expenditure reductions, we began
discussions with Sanmina to negotiate a settlement amount and a
payment schedule for outstanding amounts due under our amended
settlement and release agreement with Sanmina. We also suspended
payments to Sanmina pending completion of such negotiations. We
have also initiated and plan to initiate discussions with other
significant creditors during August 2002 to modify payment terms
for existing obligations. We have had and expect to continue to
have negative cash flows from operations through December 2002.
On July 31, 2002, we had $1.4 million in cash and cash
equivalents. Based upon our current working capital needs and
outstanding commitments and assuming that no additional expense
reduction measures or limitations on cash disbursements are
implemented by us and the Companys obligations to Sanmina
and our other significant creditors are not successfully
renegotiated, the Company believes that available cash reserves
will not be sufficient to fund operations and to meet our
working capital needs and anticipated capital expenditures after
August 2002. There can be no assurance that the Company will
successfully negotiate restructuring of its obligations to
Sanmina or its other significant creditors. To the extent that
funds are insufficient, we will need to obtain additional
financing through public or private debt or equity financing to
sustain our business and fund our operating losses after August
2002 or enter into a sale, merger, recapitalization or other
strategic transaction with a third party.

If we raise additional funds through the issuance
of equity securities, the percentage ownership of our
stockholders will be reduced, stockholders may experience
additional dilution, or such equity securities may have rights,
preferences or privileges senior to those of the holders of our
common stock. If we raise additional funds through the issuance
of debt securities, those securities would have rights,
preferences and privileges senior to those of our common stock,
and the terms of these debt securities could impose restrictions
on our operations. However, there is no assurance that
additional financing will be available when needed, on favorable
terms, or at all, or that the Company will be successful in
finding a strategic partner. The delisting of our common stock,
which Nasdaq has advised us will occur on August 13, 2002,
could make it more difficult for us to raise additional capital.
If adequate funds are not available, we may have to file for
protection under the United States Bankruptcy Code or cease
operations as a going concern. Moreover, if funding is
insufficient at any time in the future, we may be unable to
develop or enhance our products or services, take advantage of
business opportunities or respond to competitive pressures, any
of which could materially harm our business.

Net Revenues.Our net revenues are derived primarily
from products based on the CDMA standard, including our Network
Repeaters. In addition, we sell complementary equipment for
these products, including battery back-up systems, antennas and
network management software. We also provide training,
installation support, design, and implementation services to our
customers on a fee-for-service basis. In the past, we publicly
announced the signing of certain purchase contracts and orders
with three customers with announced estimated aggregate values
through November 2002 of approximately $50.0 million,
$15.0 million and $3.0 million, respectively. However,
these agreements have no required minimum purchase amounts and
can be terminated without penalty. Accordingly, any estimates of
total value of these agreements are speculative. To date, we
have only recognized revenues of $11.0 million,
$3.4 million and $1.1 million, respectively, for these
three customers under these agreements. In addition, on
September 6, 2001, we announced an $11.0 million order
from Capitel Group, Ltd. of Beijing for China Unicom. On
October 22, 2001, we announced that the delivery of
products against this order would be extended for a significant
length of time and will most likely be in volumes substantially
lower than originally anticipated. To date, we have shipped
$2.2 million in products under this purchase order.

In the quarter ended December 29, 2000, we
began to experience a slowdown in the booking of orders from new
and existing customers and certain customers requested delays in
shipment of existing orders. To date we have experienced
postponements of approximately $10.0 million in orders that
were initially planned to be shipped within the last
18 months. Our customers may further delay or cancel these
orders without any repercussion or penalty. We have been unable
to book new orders sufficient to offset the effects of these
postponements. While the reasons for these trends are uncertain,
they may be attributable to an overall slowdown in the economy
and in the telecommunications industry in particular, reduced or
deferred capital expenditures by our customers, or a difficulty
by some customers in obtaining financing. These trends have

13



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##### Table of Contents



continued through June 28, 2002 and have
adversely affected our business, financial condition and results
of operations, as indicated by the reduction in our net revenues
for the quarter ended June 28, 2002 as compared to the
quarter ended June 29, 2001. If these trends continue
further or accelerate, our net revenues, business, financial
condition and results of operations would continue to be
adversely affected.


We have experienced downward pressure on selling
prices of our single-channel products as a result of our
entering into volume sale agreements with some customers and
general competitive pressures. We expect that our selling prices
for these products will continue to decline for the foreseeable
future. If we cannot offset declines in selling prices by
increasing our sales volumes, realizing higher gross margins on
our new products or reducing manufacturing costs, our revenues
or gross margins will decline. We believe that the introduction
and sale of our new dual-channel Network Repeater product should
help generate customer interest and assist in reversing this
trend in declining orders and revenues. While we have shipped
the new dual-channel Network Repeater during the quarter ending
June 28, 2002, we have not received orders sufficient to
reverse this trend of declining revenues in the quarter ending
June 28, 2002.

We have experienced and expect to continue to
experience significant fluctuations in our quarterly net
revenues as a result of our long and variable sales cycle.
Historically, our sales cycle, which is the period from the time
a sales lead is generated until the recognition of revenue from
that lead, ranges from nine to 24 months. The variability
and length of our sales cycle is influenced by a number of
factors, including:



| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | our customers deployment schedules;                                                     
|
| |  | our customers access to financing for the
    purchase of our products;                 
|
| |  | the need to design networks to incorporate our
    products;                             
|
| |  | the need to demonstrate our products before
    purchase;                                
|
| |  | the manufacturing lead times for our products; and                                       
|
| |  | our inventory levels for the specific product
    configuration ordered by our customers.

Our customer base has been and may continue to be
concentrated with a small number of customers.

If we fail to significantly increase our sales of
Network Repeaters and the deployment of RepeaterHybrid Networks
or to broaden our customer base, we may fail to generate
sufficient revenues to sustain our business.

Cost of Revenues.Our cost of revenues consists of the
costs of the various components used to assemble our products,
the third-party charges to assemble and test the products, the
overhead cost of the operations departments, inventory valuation
allowance, the direct costs of network design services we sell
to our customers and the cost of providing customer service,
including warranty and repair charges. Our components are
currently obtained from a small number of suppliers and contract
manufacturers. Several of these suppliers are either
single-source or sole-source suppliers, which could limit our
ability to achieve lower prices from these suppliers and could
lead to delays and interruption in supply.

Gross Profit.Our
gross profit is affected by the level of demand for our products
and services, new product introductions by us and our
competitors, and the competitive pressures and costs of the
various components and production services provided by our
vendors. If we are unable to offset our expected decline in
selling prices with lower unit costs, our gross profits may
decline. Additionally, as part of volume and other sales
agreements, we sell our products at a reduced margin to certain
customers. If sales to these customers represent an increased
portion of sales in any quarter, we may experience a reduction
in our gross margins. Warranty reserve, inventory valuation
allowance and similar charges also have a significant effect on
gross profit in any one particular year or quarter.

Operating Expenses.Research and development expenses
consist primarily of expenses incurred in the design and
development of our products and our proprietary technology.
These expenses include the salaries and associated overhead
expenditures for our engineers and technicians, materials for
the production of prototypes and expenses for various
consultants. We expect to incur significant expenses in the
development of our next generation of products to serve the
emerging high-speed wireless markets.

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Sales and marketing expenses consist primarily of
salaries, commissions, consulting fees, trade show expenses,
travel expenses, advertising, direct marketing expenses and
associated overhead expenses. We must maintain significant
levels of sales and marketing expenses so that we may enter new
markets or introduce new products in order to generate
sufficient revenues to sustain our business.

General and administrative expenses consist
primarily of expenses for finance, corporate management, general
office administration, insurance, and legal, accounting and
other professional fees.

In connection with the acquisition of Gwydion, we
recorded an in-process technology charge of $0.9 million
for the year ended March 31, 2000 and we issued 573,334
shares subject to our right of repurchase until certain
performance criteria were met. These shares were held in an
escrow account and subject to our right of repurchase under
certain conditions. We revalued these shares at the end of each
reporting period until April 20, 2001, at which time we
entered into an agreement to sell substantially all of the
assets of the Gwydion development project. In connection with
this contingent consideration, we recognized a research and
development expense of $1.9 million during the year ended
March 31, 2000. During the year ended March 30, 2001,
we recorded a net credit to research and development expense of
$1.4 million under this arrangement.

During the year ended March 29, 2002, we
recorded $0.1 million in research and development expense
under this arrangement. Total compensation expense recorded
related to these shares was $579,000 in the aggregate.

Stock-based compensation consists of the
difference between the deemed fair market value of stock subject
to stock options and the exercise price of these options. This
difference is being amortized over the vesting period of the
options, generally four years. In each of the three-month
periods ended June 29, 2001 and June 28, 2002, we
recorded $139,000 of stock-based compensation expense in
connection with options granted to employees and consultants.
The portion included in operating expenses was $228,000 and
$140,000, respectively, with the balance as a credit to costs of
revenues.

Loss from Operations.We have incurred substantial losses
since our inception and, as of June 28, 2002, had an
accumulated deficit of approximately $103.0 million. We
expect to continue to incur substantial operating losses for the
fiscal year ending March 28, 2003 and we may never achieve
or sustain profitability.

During our past three fiscal years, we have not
achieved profitability on a quarterly or annual basis. Because
we need to continue to invest significant financial resources in
our sales and marketing efforts and other operating expenses, we
expect to continue to incur losses at least through the fiscal
year ending March 28, 2003. We will need to generate
significantly higher revenues in order to support our operating
expenses and to achieve and maintain profitability.

Other Income and Expense, Net.Other income and expense, net,
consists primarily of interest income earned on balances held in
our interest-bearing accounts, offset by interest expense on our
promissory notes.

Significant Accounting Policies

We prepare our financial statements in conformity
with accounting principles generally accepted in the United
States of America. As such, we are required to make certain
estimates, judgments and assumptions that we believe are
reasonable based upon the information available. These
estimates, judgments and assumptions affect the reported amounts
of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the periods presented. The significant accounting
policies which we believe are the most critical to aid in fully
understanding and evaluating our reported financial results
include the following:

Revenue Recognition.We recognize revenue in accordance with SEC Staff Accounting
Bulletin (SAB) No. 101, Revenue
Recognition in Financial Statements, as amended by SAB
No. 101A and SAB No. 101B. SAB No. 101 requires
that four basic criteria must be met before revenue can be
recognized: (1) persuasive evidence of an arrangement
exists, generally in the form of a contract or a purchase order;
(2) delivery has occurred or services have been rendered;
(3) the fee is fixed and determinable; and
(4) collectibility is reasonably assured.

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Our revenues are derived primarily from the sale
of our hardware products and accessories. Product revenue is
recognized upon shipment or delivery to the customer, depending
on the terms of the sale. Where a purchase order or a sales
agreement contains a customer acceptance clause, we defer
revenue recognition until the acceptance criteria have been met.

Revenues from services, including network design,
training and installation support, are recognized when services
are performed.

Revenues from Network Management Systems software
are recognized upon completion of installation, provided that no
significant vendor obligations remain and collectibility is
reasonably assured. To date, revenue from software products has
been immaterial.

Sales to
distributors Revenues
generated from certain foreign countries are derived from sales
to distributors. We do not grant return rights, exchange rights
or price protection rights. Payment terms are on average
60 days after invoice and we usually require an irrevocable
letter of credit, a down payment or credit insurance. Revenue
from distributors is recognized upon shipment or delivery to the
distributor, depending on sales terms.

Sales through
agents Our sales agents
act strictly as sales representatives and receive commission,
which is recorded in sales and marketing expenses. We invoice
the end user directly and revenue is recognized upon shipment or
delivery to the end-user, depending upon the terms of the sale.

At the time of sale, we provide for the estimated
cost of meeting product warranty and hot-line technical support.
When warranty and post contract customer support obligations
exist beyond one year, the related revenue is deferred and
recognized ratably over the term of the arrangement.

The accounting rules related to revenue
recognition are complex and are affected by interpretations of
the rules and an understanding of industry practices, both of
which are subject to change. Consequently, management must make
significant judgments, including those with respect to evidence
of an arrangement and collectibility of receivables. The
determinations that we make can materially impact the timing of
recognition of revenues.

Inventory Valuation
Allowance.We value our inventory at
the lower of the actual cost to purchase and/or manufacture the
inventory or the current estimated market value of the
inventory. Appropriate allowances are made to reduce the value
of inventories to net realizable value, where this is below
cost. These allowances are based on managements judgment,
when management determines that inventories may be slow moving
or obsolete. We regularly review inventory quantities on hand
and record an inventory valuation allowance for excess and
obsolete inventory based primarily on our estimated forecast of
product demand and production requirements for the next twelve
months. Our products require a considerable amount of lead-time
for production and we may run into inventory overages due to our
inability to cancel production orders from our contract
manufacturer. For example, in fiscal 2001, our cost of revenues
included $2.4 million related to inventory valuation
allowance for excess and obsolete inventory. In addition, in
fiscal 2002, we recorded $4.6 million in inventory
valuation allowance, which was comprised of $0.8 million
for lower-of-cost-or-market, and $3.8 million for excess
and obsolete inventory. Additionally, our estimates of future
product demand may prove to be inaccurate, in which case we may
have understated or overstated the allowance required for excess
and obsolete inventory. In the future, if our inventory is
determined to be overvalued, we would be required to recognize
such costs in our cost of revenue at the time of such
determination. Likewise, if our inventory is determined to be
undervalued, we may have over-reported our costs of revenues in
previous periods and would be required to recognize such
additional operating income at the time of sale. Therefore,
although we make every effort to ensure the accuracy of our
forecasts of future product demand, any significant
unanticipated changes in demand or technological developments
could have a significant impact on the value of our inventory
and our reported operating results. See Due to
uncertainties in production forecasting, we may experience
unexpected surpluses or shortages of inventory, and
Our quarterly revenues and operating results may fluctuate
significantly under Risks That Could Affect Future
Results.

Warranty Reserve.Our warranty reserve is established based on our best estimate
of the amounts necessary to settle future and existing claims on
products sold as of the balance sheet date. While our warranty

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costs have historically been within our
expectations and the provisions established, we cannot guarantee
that we will continue to experience the same warranty return
rates or repair costs that we have in the past. A significant
increase in product return rates, or a significant increase in
the costs to repair our products, could have a material adverse
impact on our operating results for the period or periods in
which such returns or additional costs materialize.


Results of Operations

The following table sets forth our results of
operations as a percentage of net revenues for the periods
indicated:

|                            |                            |                          |        |             |       |  |        |      |       | 
|--------------------------- | -------------------------- | ------------------------ | ------ | ----------- | ----- |  | ------ | ---- | ----- | 
|                            |                            |                         
|                            |                            | Three Months Ended      
|                            |                            |                         
|                            |                            | June 28,                 |        | June 29,   
|                            |                            | 2002                     |        | 2001       
|                            |                            |                          |        |            
|                            |                            | (Unaudited)              |        | (Unaudited)
|Net revenues                |                            |                          | 100.0  | %           |       |  | 100.0  | %   
|Cost of revenues            |                            |                          | 92.5   |             |       |  | 95.4   |     
|                            |                            |                          |        |             |       |  |        |     
|Gross margin                |                            |                          | 7.5    |             |       |  | 4.6    |     
|                            |                            |                          |        |             |       |  |        |     
|Operating expenses:         |                            |                          |        |             |       |  |        |     
|                            | Research and development   |                          |        | 42.6        |       |  |        | 51.6 |      
|                            | Sales and marketing        |                          |        | 62.9        |       |  |        | 45.0 |      
|                            | General and administrative |                          |        | 63.9        |       |  |        | 31.5 |      
|                            |                            |                          |        |             |       |  |        |     
|                            |                            | Total operating expenses |        |             | 169.4 |  |        |      | 128.1 | 
|                            |                            |                          |        |             |       |  |        |     
|Loss from operations        |                            |                          | (161.9 | )           |       |  | (123.5 | )   
|Other income (expense), net |                            |                          | (0.9   | )           |       |  | 7.7    |     
|                            |                            |                          |        |             |       |  |        |     
|Net loss                    |                            |                          | (162.8 | )%          |       |  | (115.8 | )%  
|                            |                            |                          |        |             |       |  |        |     

Net revenues.Our
net revenues are derived primarily from products based on the
CDMA standard, including our Network Repeaters. In addition, we
sell complementary equipment for these products, including
battery back-up systems, antennas and network management
software. We also provide training, installation supervision,
design and implementation services to our customers on a
fee-for-service basis.

Net revenues decreased $2.5 million, or
63.8%, from $3.9 million for the three months ended
June 29, 2001 to $1.4 million for the three months
ended June 28, 2002. This decrease was primarily due to
decreased shipments of our CDMA-based repeaters due to an
overall slowdown in the U.S. economy and reduced or deferred
capital expenditures by our customers worldwide. During the
three months ended June 28, 2002, 87.2% of our net revenues
were derived from ten customers, with sales to two customers,
Sercom and Unefon, comprising approximately 30.4% and 27.2%,
respectively. During the three months ended June 29, 2001,
85.2% of our net revenues were derived from ten customers, with
sales to four customers, Qwest, Unefon, iPCS and UbiquiTel PCS,
comprising approximately 20.5%, 15.9%, 12.8% and 10.5%,
respectively. International sales accounted for 71.6% of net
revenues during the three months ended June 28, 2002, as
compared to 24.0% during the three months ended June 29,
2001.

In the quarter ended December 29, 2000, we
began to experience a slowdown in the booking of orders from new
and existing customers and certain customers requested delays in
shipment of existing orders. To date we have experienced
postponements of approximately $10 million in orders that
were initially planned to be shipped within the last
18 months. Our customers may further delay or cancel these
orders without any repercussion or penalty. We have been unable
to book new orders sufficient to offset the effects of these
postponements. While the reasons for these trends are uncertain,
they may be attributable to an overall slowdown in the economy
and in the telecommunications industry in particular, reduced or
deferred capital expenditures by our customers, or difficulty by
some customers in obtaining financing. These trends have
continued through June 28, 2002 and have adversely affected
our business, financial condition and results of

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operations, as indicated by the reduction in our
net revenues for the three months ended June 28, 2002 as
compared to the three months ended June 29, 2001. If these
trends continue further or accelerate, our net revenues,
business, financial condition and results of operations would
continue to be adversely affected.


We have experienced downward pressure on selling
prices of our single-channel products as a result of our
entering into volume sale agreements with some customers and
general competitive pressures. We expect that our selling prices
for these products will continue to decline for the foreseeable
future. If we cannot offset declines in selling prices by
increasing our sales volumes, realizing higher gross margins on
our new products or reducing manufacturing costs, our revenues
or gross margins will decline.

We believe that the introduction and sale of our
new dual-channel network repeater product should help generate
customer interest and orders sufficient to reverse this trend in
declining orders and revenues. If we fail to significantly
increase our sales of Network Repeaters and the deployment of
RepeaterHybrid Networks or broaden our customer base, we may
fail to generate sufficient revenues to sustain our business.

Cost of revenues and gross margin.Our cost of revenues consists of the
costs of the various components used to assemble our products,
third-party charges to assemble and test the products, the
overhead cost of the operations department, inventory valuation
allowance, the direct costs of network design services we sell
to our customers and the cost of providing customer service,
including warranty and repair charges. Our gross margin is
affected by the level of demand for our products and services,
new product introductions by us and our competitors, competitive
pressures and the costs of the various components and production
services provided by our vendors. If we are unable to offset our
expected decline in selling prices with lower unit costs, our
gross profits may decline. Additionally, as part of volume and
other sales agreements, we sell our products at a reduced margin
to certain customers. If sales to these customers represent an
increased portion of sales in any quarter, we may experience a
reduction in our gross margins. Warranty reserve, inventory
valuation allowance and similar charges also have a significant
effect on gross margin in any one particular quarter. These
reserves and allowances are based on managements
reasonable estimates. If events and circumstances cause
management to revise these estimates and therefore increase
these reserves and allowances, such revision might have an
adverse effect on our gross margins. For example, we recorded a
$1.3 million cancellation penalty accrual in the quarter
ended December 28, 2001, which had an adverse effect on our
gross margins, results of operations and financial condition.

Cost of revenues decreased $2.4 million, or
64.9%, from $3.7 million for the three months ended
June 29, 2001 to $1.3 million for the three months
ended June 28, 2002. The gross profit margin increased to
7.5% for the three months ended June 28, 2002 from 4.6% for
the three months ended June 29, 2001. The majority of this
2.9 percentage point increase in gross profit margin is due
to a decrease in warranty expense and inventory valuation
allowance of $0.4 million. Other costs of revenue, which
consist of manufacturing overhead and customer service
expenditures, decreased from $1.4 million for the three
months ended June 29, 2001 to $0.6 million for the
three months ended June 28, 2002. Although expenses
declined from the prior year, manufacturing overhead increased
as a percent of sales primarily due to the decline in revenues.
The decrease in other costs of revenue was primarily due to a
decrease in customer service expenses of $0.3 million, and
a decrease in manufacturing overhead of $0.5 million. The
decrease in expenses is related primarily to lower payroll from
decreased headcount. Direct material margins decreased from
50.1% in the three months ended June 29, 2001 to 47.5% for
the three months ended June 28, 2002 due to lower selling
prices for our Network Repeaters.

Research and development.Research and development expenses
consist primarily of expenses incurred in the design and
development of our products and our proprietary technology.
Research and development expenses decreased $1.4 million,
or 70.1%, from $2.0 million for the three months ended
June 29, 2001 to $0.6 million for the three months
ended June 28, 2002. This decrease was due to a decrease in
payroll-related expenses of $0.5 million due to reduced
headcount from 34 as of June 29, 2001 to 14 as of
June 28, 2002, a decrease in the amortization of
stock-based compensation of $0.1 million, a decrease of
$0.5 million due to the reduction in the number of outside
contractors we used for research and development activities, and
a reduction of $0.3 million for development materials.

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Sales and marketing.Sales and marketing expenses consist
primarily of salaries, commissions, consulting fees, trade show
expenses, travel expenses, advertising, direct marketing
expenses and associated overhead expenses. Sales and marketing
expenses decreased $0.9 million, or 50.0%, from
$1.8 million for the three months ended June 29, 2001
to $0.9 million for the three months ended June 28,
2002. This decrease was due to reduced payroll of
$0.3 million as a result of reduced headcount from 13 as of
June 29, 2001 to 6 as of June 28, 2002, reduced
professional fees of $0.2 million, reduced sales
commissions of $0.1 million due to the decline in revenues,
and a decrease in travel-related expenses of $0.3 million.

General and administrative.General and administrative expenses
consist primarily of expenses for finance, corporate management,
general office administration, insurance, amortization of
stock-based compensation, and legal, accounting and other
professional fees. General and administrative expenses decreased
$0.3 million, or 26.6%, from $1.2 million for the
three months ended June 29, 2001 to $0.9 million for
the three months ended June 28, 2002. This decrease was
attributable to a decrease in payroll expenses of
$0.1 million due to decreased headcount from 19 as of
June 29, 2001 to 10 as of June 28, 2002, a decrease in
professional fees and contract labor costs of $0.1 million,
and a decrease in provisions for bad debt associated with
accounts receivable of $0.1 million.

Other income and expense, net.Other income and expense, net,
consists primarily of interest income earned on balances held in
our interest-bearing accounts, offset by interest expense on our
promissory notes. Other income was $35,000 and $0.6 million
for the three-month periods ended June 28, 2002 and
June 29, 2001, respectively. The majority of the decrease
in other income is due to the sale of the Gwydion development
project of $0.4 million, and a decrease in interest income
of $0.2 million from our interest bearing accounts due to
lower account balances. Other expenses decreased
$0.3 million from $0.3 million for the three months
ended June 29, 2001 to $47,000 for the three months ended
June 28, 2002 primarily due to reduced interest expense of
$0.2 million as a result of paying off outstanding loans,
and reduced sales tax expenses of $0.1 million.

Liquidity and Capital Resources

At June 28, 2002, we had $2.5 million
in cash and cash equivalents, as compared to $5.3 million
at March 29, 2002. Cash used in operating activities for
the three months ended June 28, 2002 was $2.7 million,
as compared to $6.7 million for the three months ended
June 29, 2001. The significant use of cash in operating
activities during the three months ended June 28, 2002
resulted from our net losses of $2.3 million, an increase
in inventories of $0.3 million, a net decrease in accounts
payable, accrued compensation and other accrued liabilities of
$1.7 million, a decrease in deferred revenue of
$0.1 million, offset by non-cash depreciation and
amortization expenses of $0.4 million, a decrease in
accounts receivable of $0.8 million, a decrease in other
assets of $0.3 million and non-cash expenses of
$0.1 million for stock-based compensation. Management is
continuing to strive to reduce cash used in operating activities
by reducing inventory levels, reducing daily sales outstanding
from 71 days to 45 days, and reducing expenses where
appropriate.

Cash used in investing activities for the three
months ended June 28, 2002 was $34,000, as compared to cash
provided from investing activities of $0.4 million for the
three months ended June 29, 2001, attributable to the sale
of substantially all of the assets related to the Gwydion
development project. Capital expenditures of $47,000 were
primarily investments to support our business and field service
parts. We received proceeds of $13,000 from the sales of
unnecessary equipment.

Net cash used in financing activities was $55,000
for the three months ended June 28, 2002, as compared to
net cash used in financing activities of $0.3 million for
the three months ended June 29, 2001. For the three months
ended June 28, 2002, $59,000 was used for payments against
capital lease obligations.

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The Companys contractual obligations at
June 28, 2002 were as follows:

|                                   |  |                        |       |           |  |       |     |  |  |   |       | 
|---------------------------------- |  | ---------------------- | ----- | --------- |  | ----- | --- |  |  | - | ----- | 
|                                   |  |                       
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  | Less Than 1 Year       |       | 1-3 Years |  | Total
|                                   |  |                        |       |           |  |      
|                                   |  |                       
|                                   |  | (In thousands)        
|Contractual Obligations            |  |                        |       |           |  |       |     |  |  |   |       | 
|Capital-lease obligations          |  | $                      | 82    |           |  | $     |    |  |  | $ | 82    | 
|Operating leases                   |  |                        | 502   |           |  |       | 488 |  |  |   | 990   | 
|Unconditional purchase obligations |  |                        | 614   |           |  |       |    |  |  |   | 614   | 
|                                   |  |                        |       |           |  |       |     |  |  |   |       | 
|Total contractual obligations      |  | $                      | 1,198 |           |  | $     | 488 |  |  | $ | 1,686 | 
|                                   |  |                        |       |           |  |       |     |  |  |   |       | 

We incurred a net loss of $2.3 million for
the three months ended June 28, 2002, and a net loss of
$4.5 million for the three months ended June 29, 2001.
Although we have been successful in reducing our cash usage
gradually during the past five consecutive quarters including
the three months ended June 28, 2002, we have been unable
to increase our revenues. In an effort to sustain our business,
we have reduced our workforce by 17% in April 2001, 34% in
October 2001, 27% in March 2002, and 40% in July 2002. We have
ceased purchases for our older single-channel products, we have
implemented a sales promotion for our older single-channel
products to reduce our inventory and we have introduced our new
dual-channel product which we started to ship during the quarter
ended March 29, 2002. If these efforts prove to be
insufficient, we may be forced to reduce our expenditures
further by reducing our purchase commitments, reducing capital
expenditures, and reducing other discretionary expenditures. Our
failure to increase the sales volume of our Network Repeaters,
realize higher margins on our new products or further reduce our
expenditures could have a material adverse effect on our ability
to continue as a going concern and to achieve our intended
business objectives.

As part of such expenditure reductions, we began
discussions with Sanmina to negotiate a settlement amount and a
payment schedule for outstanding amounts due under our amended
settlement and release agreement with Sanmina. We also suspended
payments to Sanmina pending completion of such negotiations. We
have also initiated and plan to initiate discussions with other
significant creditors during August 2002 to modify payment terms
for existing obligations. We have had and expect to continue to
have negative cash flows from operations through December 2002.
On July 31, 2002, we had $1.4 million in cash and cash
equivalents. Based upon our current working capital needs and
outstanding commitments and assuming that no additional expense
reduction measures or limitations on cash disbursements are
implemented by us and the Companys obligations to Sanmina
and our other significant creditors are not successfully
renegotiated, the Company believes that available cash reserves
will not be sufficient to fund operations and to meet our
working capital needs and anticipated capital expenditures after
August 2002. There can be no assurance that the Company will
successfully negotiate restructuring of its obligations to
Sanmina or its other significant creditors. To the extent that
funds are insufficient, we will need to obtain additional
financing through public or private debt or equity financing to
sustain our business and fund our operating losses after August
2002 or enter into a sale, merger, recapitalization or other
strategic transaction with a third party.

If we raise additional funds through the issuance
of equity securities, the percentage ownership of our
stockholders will be reduced, stockholders may experience
additional dilution, or such equity securities may have rights,
preferences or privileges senior to those of the holders of our
common stock. If we raise additional funds through the issuance
of debt securities, those securities would have rights,
preferences and privileges senior to those of our common stock,
and the terms of these debt securities could impose restrictions
on our operations. However, there is no assurance that
additional financing will be available when needed, on favorable
terms, or at all, or that the Company will be successful in
finding a strategic partner. The delisting of our common stock,
which Nasdaq has advised us will occur on August 13, 2002,
could make it more difficult for us to raise additional capital.
If adequate funds are not available, we may have to file for
protection under the United States Bankruptcy Code or cease
operations as a going concern. Moreover, if funding is
insufficient at any time in the future, we may be unable to
develop or enhance our products or services, take advantage of
business opportunities or respond to competitive pressures, any
of which could materially harm our business.

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Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 141,
Business Combinations. SFAS No. 141 requires
the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the
pooling-of-interests method. We did not enter into any business
combinations after June 30, 2001; therefore, the adoption
of SFAS No. 141 has not had a significant impact on our
financial statements.

In July 2001, the FASB issued SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 142 requires, among other things, the discontinuance of
goodwill amortization and the testing for impairment of goodwill
at least annually. We currently do not carry goodwill in our
financial statements; therefore, the adoption of SFAS
No. 142 has not had a material impact on our financial
statements.

In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 supercedes SFAS
No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of. SFAS
No. 144 applies to all long-lived assets (including
discontinued operations) and consequently amends Accounting
Principles Board opinion No. 30, Reporting Results of
Operations Reporting the Effects of Disposal of a Segment of a
Business. SFAS No. 144 develops one accounting model
for long-lived assets that are to be disposed of by sale. SFAS
No. 144 requires that long-lived assets that are to be
disposed of by sale be measured at the lower of net book value
or fair value less cost to sell. Additionally, SFAS No. 144
expands the scope of discontinued operations to include all
components of an entity with operations that (i) can be
distinguished from the rest of the entity and (ii) will be
eliminated from the ongoing operations of the entity in a
disposal transaction. SFAS No. 144 is effective for
financial statements issued for fiscal years beginning after
December 15, 2001. We do not expect the adoption of SFAS
No. 144 to have a significant impact on our financial
statements.

Risks That Could Affect Future
Results

The factors discussed below are cautionary
statements that identify important factors that could cause
actual results to differ materially from those anticipated in
the forward-looking statements in this report.



| |                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have incurred significant losses since
    we began doing business, anticipate continuing losses, and may
    never achieve or sustain profitability.

We have accumulated losses of $103.0 million
since we began doing business in 1983 through June 28,
2002, and we may never achieve or sustain profitability. We
incurred a net loss of $2.3 million for the quarter ended
June 28, 2002. We will continue to incur significant
expenses, particularly research and product development and
sales and marketing expenses. We anticipate incurring net losses
at least through the fiscal year ending March 28, 2003. We
will need to generate significantly higher revenues to achieve
profitability and recoup our accumulated losses. We cannot be
certain that we will realize sufficient revenues to sustain our
business.



| |                                                                                       
| | --------------------------------------------------------------------------------------
| | We will require additional capital in the
    future which may not be available to us.

We incurred a net loss of $2.3 million for
the three months ended June 28, 2002, and a net loss of
$4.5 million for the three months ended June 29, 2001.
Although we have been successful in reducing our cash usage rate
gradually during the past five consecutive quarters including
the three months ended June 28, 2002, we have been unable
to increase our revenues. In an effort to sustain our business,
we have reduced our workforce by 17% in April 2001, 34% in
October 2001, 27% in March 2002, and 40% in July 2002. We have
ceased purchases for our older single-channel products, we have
implemented a sales promotion for our older single-channel
products to reduce our inventory and we have introduced our new
dual-channel product, which we started to ship during the
quarter ended March 29, 2002. If these efforts prove to be
insufficient, we may be forced to reduce our expenditures
further by reducing our purchase commitments, reducing capital
expenditures, and reducing other discretionary expenditures. Our
failure to increase the sales volume of our Network Repeaters,
realize higher margins on our new products or further reduce our
expenditures could have a

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material adverse effect on our ability to
continue as a going concern and to achieve our intended business
objectives.


As part of such expenditure reductions, we began
discussions with Sanmina to negotiate a settlement amount and a
payment schedule for outstanding amounts due under our amended
settlement and release agreement with Sanmina. We also suspended
payments to Sanmina pending completion of such negotiations. We
have also initiated and plan to initiate discussions with other
significant creditors during August 2002 to modify payment terms
for existing obligations. We have had and expect to continue to
have negative cash flows from operations through December 2002.
On July 31, 2002, we had $1.4 million in cash and cash
equivalents. Based upon our current working capital needs and
outstanding commitments and assuming that no additional expense
reduction measures or limitations on cash disbursements are
implemented by us and the Companys obligations to Sanmina
and our other significant creditors are not successfully
renegotiated, the Company believes that available cash reserves
will not be sufficient to fund operations and to meet our
working capital needs and anticipated capital expenditures after
August 2002. There can be no assurance that the Company will
successfully negotiate restructuring of its obligations to
Sanmina or its other significant creditors. To the extent that
funds are insufficient, we will need to obtain additional
financing through public or private debt or equity financing to
sustain our business and fund our operating losses after August
2002 or enter into a sale, merger, recapitalization or other
strategic transaction with a third party.

If we raise additional funds through the issuance
of equity securities, the percentage ownership of our
stockholders will be reduced, stockholders may experience
additional dilution, or such equity securities may have rights,
preferences or privileges senior to those of the holders of our
common stock. If we raise additional funds through the issuance
of debt securities, those securities would have rights,
preferences and privileges senior to those of our common stock,
and the terms of these debt securities could impose restrictions
on our operations. However, there is no assurance that
additional financing will be available when needed, on favorable
terms, or at all, or that the Company will be successful in
finding a strategic partner. The delisting of our common stock,
which Nasdaq has advised us will occur on August 13, 2002,
could make it more difficult for us to raise additional capital.
If adequate funds are not available, we may have to file for
protection under the United States Bankruptcy Code or cease
operations as a going concern. Moreover, if funding is
insufficient at any time in the future, we may be unable to
develop or enhance our products or services, take advantage of
business opportunities or respond to competitive pressures, any
of which could materially harm our business.



| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | If the strategic restructuring of our
    organization is not effective, our financial results and
    business could suffer.

In response to changes in industry and market
conditions we are restructuring, and may continue to
restructure, our activities to more strategically realign our
resources and improve our operational efficiency. Our
restructuring plan is based on certain assumptions regarding the
cost structure of our business and the nature and severity of
the current industry adjustment, which may not prove to be
accurate. Our restructuring plan has involved the implementation
of a number of initiatives to streamline our business and
improve operational efficiency. We cannot assure you that our
restructuring plan will result in sufficient cost reduction or
greater operational efficiency in light of current or future
capital markets and telecommunications industry conditions. We
also cannot assure you that we will not be required to refine,
expand or extend our restructuring plan, or that we will improve
our operational efficiency as a result of our restructuring
plan. In addition, we cannot assure you that we will be able to
successfully utilize our reduced workforce resources effectively
or that our management will be effective during our
restructuring. Current and additional restructuring actions may
result in further cash and/or non-cash charges, which could
adversely affect our business, results of operations and
financial condition. Finally, we may be the target of employment
litigation in connection with our restructuring and reductions
in workforce.



| |                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have deployed a limited number of
    RepeaterHybrid Networks and we may not be able to gain broad
    market acceptance of the RepeaterHybrid Network
    concept.

Our RepeaterHybrid Networks have yet to gain
widespread industry acceptance and we have deployed them with
only a limited number of wireless service providers. If we fail
to significantly increase the

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deployment and market acceptance of our products
and RepeaterHybrid Networks as replacements for traditional
networks using only base stations, we may fail to generate
sufficient revenues to sustain our business.




| |                                                                              
| | -----------------------------------------------------------------------------
| | Our quarterly revenues and operating
    results may fluctuate significantly.

Our quarterly operating results have fluctuated
significantly in the past and are likely to do so in the future.
Factors that could cause our quarterly results to fluctuate
include, but are not limited to:



| |   |                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | general economic conditions and, in particular,
    conditions within our industry that affect demand for our
    products;                                                                                 
|
| |  | the reduction in the selling price of our
    products due to competitive pressures from base station
    manufacturers and the introduction of other competing repeater
    products;                      
|
| |  | customer responses to announcements of new
    products and product enhancements by competitors and the entry
    of new competitors into our markets;                                                      
|
| |  | the concentration of customer orders at the end
    of a quarter, which can result in products shipping in the
    following quarter due to capacity constraints faced by our
    contract manufacturer; and
|
| |  | any delay in our introduction of new products or
    product enhancements, particularly our new products for use in
    3G networks.                                                                        



| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | If our operating results do not meet the
    expectations of securities analysts and investors, our stock
    price is likely to decline.

In the quarter ended December 29, 2000, we
began to experience a slowdown in the booking of orders from new
and existing customers and certain customers requested delays in
shipment of existing orders. To date we have experienced
postponements of approximately $10.0 million in orders that
were initially planned to be shipped within the last
18 months. Our customers may further delay or cancel these
orders without any repercussion or penalty. We have been unable
to book new orders sufficient to offset the effects of these
postponements. While the reasons for these trends are uncertain,
they may be attributable to an overall slowdown in the economy
and in the telecommunications industry in particular, reduced or
deferred capital expenditures by our customers, or a difficulty
by some customers in obtaining financing. These trends have
continued through June 28, 2002 and have adversely affected
our business, financial condition and results of operations, as
indicated by the reduction in our net revenues for the quarter
ended June 28, 2002 as compared to the quarter ended
June 29, 2001. If these trends continue further or
accelerate, our net revenues, business, financial condition and
results of operations would continue to be adversely affected.



| |                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our lengthy and variable sales cycle makes
    it difficult for us to predict if and when a sale will be made
    and could lead to operating difficulties and cash flow
    problems.

Our sales cycle, which is the period from the
generation of a sales lead until the recognition of revenues,
ranges from nine to 24 months, making it difficult to
forecast revenues and operating results. Our inability to
accurately predict the timing and magnitude of sales of our
products and services could cause a number of problems,
including, but not limited to:



| |   |                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | expending significant management efforts and
    incurring substantial sales and marketing expenses in a
    particular period that do not translate into orders during that
    period, or at all;
|
| |  | difficulties in meeting our cash flow
    requirements and obtaining credit because of delays in receiving
    orders; and                                                                         
|
| |  | difficulties in meeting our customers
    product delivery requirements in the event many orders are
    received in a short period of time.                                                      

The problems resulting from our lengthy and
variable sales cycle could impede our growth, cause fluctuations
in our operating results and restrict our ability to take
advantage of new opportunities.

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| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Certain existing contracts may not result
    in revenues as large as previously disclosed.

In the past, we publicly announced the signing of
certain purchase contracts and orders with three customers with
announced estimated aggregate values through November 2002 of
approximately $50.0 million, $15.0 million, and
$3.0 million, respectively. However, these agreements have
no required minimum purchase amounts and can be terminated
without penalty. Accordingly, any estimates of total value of
these agreements are speculative. Furthermore, we may never
achieve the expected values or sales volume publicly disclosed.
While we continue to internally estimate specific customer sales
volumes for business planning purposes, none of our prior
publicly disclosed estimates should be regarded as purchase
commitments or indicative of our current estimates or
expectations. To date, we have only recognized revenues of
$11.0 million, $3.4 million and $1.1 million,
respectively, for these three customers under these agreements.

In addition, on September 6, 2001, we
announced an $11.0 million order from Capitel Group, Ltd.
of Beijing for China Unicom. On October 22, 2001, we
announced that the delivery of products against this order would
be extended for a significant length of time and will most
likely be in volumes substantially lower than originally
anticipated. To date, we have shipped $2.2 million worth of
products under this purchase order.



| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | Due to uncertainties in production
    forecasting, we may experience unexpected surpluses or shortages
    of inventory.

Our contract with our manufacturer requires us to
provide a rolling six-month forecast for production each month.
The forecast for the first two months of the six-month forecast
are considered firm purchase orders. If we fail to accurately
predict our customers demand for our products, we may be
subject to shortages of certain products and surpluses of other
products. If we fail to have an adequate supply of inventory for
our products, we may be subject to cancellation of orders from
our customers for these products. In addition, if we have a
surplus of certain products, we may incur charges for excess or
obsolete inventory. For example, in fiscal 2001, our cost of
revenue included $2.4 million related to inventory
valuation allowance for excess and obsolete inventory. In
addition, during the year ended March 29, 2002, we recorded
$4.6 million in inventory valuation allowance, which was
comprised of accrual of $0.8 million for
lower-of-cost-or-market and $3.8 million for excess and
obsolete inventory.

Some of the components of our products may have
long lead times from the date a purchase order is placed with
the supplier to the date the components are delivered to our
contract manufacturer. In order to ensure an adequate supply of
these components, we may be required to purchase the components
ourselves and then resell them to our contract manufacturer to
meet our forecasted requirements. If we fail to accurately
predict the demand for these components, we may face shortages
and potentially lose sales, or alternatively incur charges for
excess or obsolete inventory.



| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | A small number of customers account for a
    substantial portion of our revenues and the loss of any of these
    customers could harm our business.

Our customer base has been and may continue to be
concentrated with a small number of customers. The loss of any
of these customers, or the delay, reduction or cancellation of
orders by or shipments to any of these customers could hurt our
results and cause a decline in our stock price. In the three
months ended June 28, 2002, ten customers accounted for
87.2% of our net revenues, with Sercom and Unefon accounting for
30.4% and 27.2%, respectively. In the three months ended
June 29, 2001, 85.2% of our net revenues were derived from
ten customers, with sales to four customers, Qwest, Unefon, iPCS
and UbiquiTel PCS, comprising approximately 20.9%, 15.9%, 12.8%
and 10.5%, respectively.

When our products have been fully deployed in a
customers network or a customers demands are
otherwise satisfied, we must replace that customers sales
with those of new customers in order to maintain our sales
volume.

We do not have any long-term contracts with any
of our customers. Our contracts generally do not contain minimum
purchase requirements and are terminable at any time without
penalty. We expect to continue to depend on a small number of
customers for a substantial portion of our revenues.

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In addition, we face increased credit risks,
including slow payments or non-payments, due to the
concentration of our customer base.



| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to obtain or maintain
    vendor qualification with nationwide wireless network operators,
    our ability to sell our products would be impaired and our
    revenues would likely decline.

Many of our current and potential customers are
large major network operators or affiliates of nationwide
wireless network operators. In order to sell our products to
these affiliates, our products must be authorized for purchase
by the network operator. This authorization process can be both
costly and lengthy. If we do not maintain our status as a
qualified vendor or supplier, we will be unable to sell our
products to these network operators and their affiliates, and
our revenues will likely decline.



| |                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Competition from larger, more established
    companies with greater resources could lead to price reductions,
    loss of revenues and market share and could prevent us from
    achieving profitability.

The market for base stations, repeaters and
related products is highly competitive. We compete with large
infrastructure manufacturers, systems integrators, repeater
manufacturers and base station subsystem suppliers, as well as
new market entrants. Most of our current and potential
competitors have longer operating histories, larger installed
customer bases, substantially greater name recognition and more
financial, technical, manufacturing, marketing, sales,
distribution and other resources than we do. We may not be able
to compete successfully against current and future competitors,
including companies that develop and market new wireless
telecommunications products and services.

We have experienced downward pressure on selling
prices of our single-channel products as a result of our
entering into volume sale agreements with some customers and
general competitive pressures as discussed above. We expect that
our selling prices for these products will continue to decline
for the foreseeable future. If we cannot offset declines in
selling prices by increasing our sales volumes, realizing higher
gross margins on our new products or reducing manufacturing
costs, our revenues or gross margins will decline. These
competitive pressures may also result in longer sales cycles and
loss of customers. If we fail to significantly increase our
sales of Network Repeaters and the deployment of RepeaterHybrid
Networks or to broaden our customer base, we may fail to
generate sufficient revenues to sustain our business.



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | A significant decrease in the cost of base
    stations and their communication links would diminish one of our
    competitive advantages.

Unlike our repeater products, current base
stations typically require an expensive communications link,
usually through a high capacity digital telephone connection, to
the network. In addition, base stations themselves are typically
larger and more expensive than repeaters. A decrease in the cost
of base stations and the communication links used to connect
base stations to the local telephone network, especially in less
populated areas, will diminish a cost saving that our customers
experience from using our products. If the cost of base stations
and their communication links decline, demand for our products
may decrease and we may have to lower our product prices or
experience a decline in orders. Either one of these results
could cause decreased revenues and margins.



| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our dependence on a contract manufacturer
    for most of our products may diminish our ability to control the
    quality and timing of delivery of our products.

We utilize a third-party contract manufacturer to
manufacture modules that are assembled into our products. There
are risks associated with our dependence on a contract
manufacturer, including the contract manufacturers control
of capacity allocation, labor relations, production quality and
other aspects of the manufacturing process. If our contract
manufacturer encounters any of these problems, our manufacturing
processes will be adversely affected and we may lose customers.

We do not have long-term supply contracts with
our contract manufacturer, and they are not obligated to supply
us with products for any specific period, in any specific
quantity or at any specific price, except as may be provided in
a particular purchase order. If we are unable to obtain our
products from our contract

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manufacturer on schedule, revenues from the sale
of those products may be delayed or lost, and our reputation,
relationships with customers and our business could be harmed.
In addition, if our production volumes are too low to maintain
existing purchase orders with our contract manufacturer, we
could incur significant expenses and experience substantial
disruption to our business. Although we believe that we can
obtain an alternate contract manufacturer for our products if
necessary, we cannot guarantee that such a manufacturer can be
obtained on short notice or that our products could be
manufactured by an alternative manufacturer on satisfactory
terms. Any of these problems could damage relationships with
current or prospective customers, seriously harm our operating
results and revenues in a given period and impair our ability to
generate future sales.




| |                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our contract manufacturers reliance
    on a limited number of component suppliers could lead to delays,
    additional costs, problems with our customers and potential
    customers and loss of revenues.

Our contract manufacturer currently utilizes one
or a small number of suppliers for each of the components of our
products. In particular, there are currently only a few
suppliers of high-power amplifiers, a critical component for a
Network Repeater that meets our quality standards. Our contract
manufacturer has no long-term contracts or arrangements with the
suppliers of components for our products that guarantee the
availability of these components. If for any reason a supplier
fails to meet quality or quantity requirements, or stops selling
components at commercially reasonable prices, or if a competitor
enters into an exclusive relationship with one of our suppliers,
we could experience significant production delays or cost
increases.

From time to time, our contract manufacturer may
be required to replace some of the components of our products
when the supplier of a particular component discontinues
production. While we do not generally maintain an inventory of
components, we may purchase a quantity of these discontinued
components to supply to our contract manufacturer until new
suppliers or substitute components can be found. We face the
risk that we may deplete this inventory of discontinued
components before finding adequate substitutes, which could
cause the loss of significant sales opportunities.
Alternatively, we may be left with surplus quantities of these
components, which could cause us to incur charges for excess
inventory. Although we believe that we can obtain alternative
sources of components, we cannot guarantee that such sources can
be secured on short notice or that components will be available
from alternative sources on satisfactory terms. Any of these
problems could damage relationships with current or prospective
customers, seriously harm our operating results and revenues in
a given period and impair our ability to generate future sales.



| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | Our inability to provide long-term
    equipment financing for our customers is a competitive
    disadvantage and could result in a loss of sales.

Many of our current and potential customers
require equipment financing to purchase our products. We do not
offer long-term equipment financing to our customers. If we
cannot assist in arranging long-term equipment financing for our
customers, we may lose sales and customers to competitors that
provide such financing. Additionally, if we decide to provide
our customers with long-term equipment financing in the future,
we could face credit risks, including slow payments or
non-payments from customers.



| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | We have significant sales efforts in
    international markets, which will subject us to additional
    business risks.

A significant portion of our sales efforts has
been targeted to international service providers in Australia,
Canada, Mexico, South America, Central America, and Asia.
Conducting business in these areas subjects us to a number of
risks and uncertainties, including:



| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | inadequate protection of intellectual property in
    foreign countries;                                      
|
| |  | increased difficulty in collecting accounts;                                                                  
|
| |  | delays and expenses associated with tariffs and
    other trade barriers;                                     
|
| |  | difficulties and costs associated with complying
    with a wide variety of complex foreign laws and treaties;

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| |   |                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | currency fluctuations, including a decrease in
    the value of foreign currencies relative to the U.S. dollar,
    which could make our products less competitive against those of
    foreign competitors; and
|
| |  | political and economic instability.                                                                                                                                                                             

Any of the factors described above could impair
our ability to continue expanding into international markets and
could prevent us from increasing our revenues and achieving
profitability. We may establish contract manufacturing
operations in other countries which could further subject us to
the risks described above, particularly the difficulty of
protecting intellectual property rights.



| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | We have developed a product line primarily
    based on the CDMA standard and we may not succeed if CDMA is not
    widely accepted.

We have concentrated our efforts on the
development and sale of products specific to CDMA technology.
CDMA is the newest wireless communications technology standard
and has yet to achieve the market penetration of other more
established digital standards, including TDMA and GSM. There are
currently a limited number of wireless service providers
utilizing CDMA-based equipment. These service providers are
concentrated in North America, Central America, South America
and Asia. If CDMA technology is not widely accepted by wireless
service providers, the demand for our products will not be as
large as we are anticipating. A decline in demand for our
current products could have a significant negative impact on our
results of operations. In addition, a decline in demand may
require us to develop new products compatible with other
wireless technology standards, which would cause us to
experience significant production delays and cost increases with
no assurance of new product acceptance.



| |                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because our products are deployed in
    complex networks, they may have errors or defects that we find
    only after deployment, which, if not remedied, could harm our
    business.

Our products are highly complex, designed to be
deployed in complicated networks and may contain undetected
defects, errors or failures. Although our products are tested
during manufacturing prior to deployment, they can only be fully
tested when deployed in commercial networks. Consequently, our
customers may discover errors after the products have been
deployed. The occurrence of any defects, errors or failures
could result in installation delays, product returns, diversion
of our resources, increased service and warranty costs, legal
actions by our customers, increased insurance costs and other
losses to us or to our customers or end users. For example, in
fiscal years 2001 and 2002, our cost of sales included
$1.9 million and $0.2 million, respectively, related
to warranty expense due to defects discovered in our products
after installation and operation in our customers
networks. Any of these occurrences could also result in the loss
of or delay in market acceptance of our products, which would
harm our business and adversely affect our operating results and
financial condition.



| |                                                              
| | -------------------------------------------------------------
| | We are dependent on licensed technology for
    our products.

The receive diversity technology contained in our
products is licensed from one of our former executive officers.
We have held this perpetual license since May 1998. The license
agreement requires the timely payment of royalties in the form
of cash and shares of our common stock. These royalty payments
are non-refundable. Failure to honor the terms of the license
agreement could adversely affect our business. Our ability to
continue to deploy our existing products and to develop new
products incorporating this technology depends significantly
upon this license.



| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | If we are unable to protect and enforce our
    intellectual property rights, we may be unable to compete
    effectively.

We regard substantial elements of our products,
such as receive diversity technology, component design
specifications, network management software and network
component optimization techniques, as proprietary and attempt to
protect them by relying on patent, trademark, service mark,
copyright and trade secret laws. We also rely on confidentiality
procedures and contractual provisions with our employees,
consultants, vendors

27



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and licensees to protect our intellectual
property. Despite these efforts, we may be unable to prevent
third parties from infringing upon or misappropriating our
intellectual property, which could harm our business.


As of March 29, 2002, we had four patents
granted and five patent applications pending. We have held these
patents since November 1988, July 1990, February 1993, and
September 2000, respectively. It is possible that no patents
will be issued from these pending applications or from future
patent applications. Moreover, our currently issued patents and
any patents issued in the future may not provide us with any
competitive advantages over, or may be challenged by, third
parties.

Effective patent, trademark, service mark,
copyright and trade secret protection may not be available in
some countries in which our products are distributed,
particularly countries within South America and Asia.
Furthermore, our competitors may independently develop similar
technologies that limit the value of our intellectual property
or design around patents issued to us.



| |                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because legal standards relating to the
    protection of intellectual property rights related to the
    telecommunications industry are uncertain and evolving, we may
    be subject to intellectual property rights disputes, causing us
    to incur significant costs, diverting the time and attention of
    our management and preventing us from selling our
    products.

Due to the competitive nature of the
telecommunications industry, particularly as it relates to
CDMA-based technology, any competitive advantage we may have
relies heavily upon protection of our intellectual property
rights. Because the legal standards relating to the validity,
enforceability and scope of protection of intellectual property
rights in our industry are uncertain and evolving, in the
future, we may be a party to litigation concerning the
intellectual property incorporated in our products. These
lawsuits, regardless of their outcome, would be time-consuming
and expensive to resolve and would divert management time and
attention. Any potential intellectual property litigation also
could force us to do one or more of the following:



| |   |                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | stop selling, incorporating or using our products
    that use the challenged intellectual property;                                                                                                  
|
| |  | obtain from the owner of the infringed
    intellectual property right a license to sell or use the
    relevant technology, which license may not be available on
    reasonable terms, or at all; or
|
| |  | redesign those products that use the challenged
    technology.                                                                                                                                       

If we are forced to take any of these actions,
our business may be harmed. Our insurance may not cover
potential claims of this type or may not be adequate to
indemnify us for all liability that may be imposed.



| |                                                                        
| | -----------------------------------------------------------------------
| | Delays in new product development projects
    could harm our business.

The market for our products is subject to
competition from other repeater manufacturers and base station
manufacturers. As a result, we must continue to develop new
products and enhancements to our existing products to remain
competitive. In particular, we must develop and bring to market
our products designed to address third generation, or 3G,
wireless networks. If we do not successfully develop new
products and enhancements in a timely manner, we may lose market
acceptance of our products and be unable to compete effectively
with new competitive products, which could harm our business.



| |                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------
| | If we lose key engineering personnel or are
    unable to hire additional qualified engineering personnel, we
    may not be successful.

Our future success largely depends on our ability
to attract and retain qualified engineering personnel. The
market for qualified engineering personnel in the
telecommunications industry is highly competitive and if we
cannot attract and retain these personnel, our ability to
compete and to grow our business would be significantly limited.
We may find it more difficult to attract or retain qualified
personnel as a result of our recent reductions in workforce and
restructuring.

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| |                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have engaged in acquisitions and may
    engage in future acquisitions or strategic transactions that may
    subject us to various operational and financial
    risks.

We have in the past and expect in the future to
acquire other businesses or technologies that complement our
products, expand the breadth of our product offerings, enhance
our technical capabilities, help secure critical sources of
supply, or that may otherwise offer growth opportunities. In
connection with acquisitions, we may incur operational,
financial and other risks, including:



| |   |                                                                                            
| | - | -------------------------------------------------------------------------------------------
| |  | difficulties in combining operations, personnel,
    technologies or products;             
|
| |  | unanticipated costs;                                                                       
|
| |  | risks associated with entering markets in which
    we have no or limited prior experience;
|
| |  | diversion of managements attention from our
    core business;                            
|
| |  | adverse effects on existing business
    relationships with suppliers and customers;       
|
| |  | issuing stock that would dilute our current
    stockholders percentage ownership;        
|
| |  | incurring debt; and                                                                        
|
| |  | assumption of liabilities.                                                                 



| |                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our certificate of incorporation, bylaws
    and share purchase rights plan, as well as provisions of
    Delaware law, could discourage potential acquisitions of our
    company that stockholders may consider favorable.

Certain provisions of our certificate of
incorporation, our bylaws and Delaware law, as well as our share
purchase rights plan, may discourage, delay or prevent a merger
or acquisition that stockholders may consider favorable. This
could have an adverse effect on the market price of our common
stock or prevent our stockholders from realizing a premium over
the market price for their shares of our common stock.



| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Control by certain stockholders will limit
    the ability of other stockholders to influence the outcome of
    matters requiring stockholder approval and could discourage
    potential acquisitions of our company by third
    parties.

We believe that our executive officers, directors
and entities affiliated with them, along with the current
holders of more than 5% of our common stock, in the aggregate,
beneficially own a majority of our common stock (including
shares issuable pursuant to options and warrants held by those
parties which are currently exercisable or exercisable within
60 days of May 15, 2002). These stockholders, if
acting together, would be able to exert a significant degree of
influence over our management and affairs and over matters
requiring approval by our stockholders, including the election
of our board of directors and the approval of mergers or other
business combination transactions. This concentration of
ownership could have the effect of delaying or preventing a
change in our control or otherwise discourage a potential
acquirer from attempting to obtain control of us, which in turn
could have an adverse effect on the market price of our common
stock or prevent our stockholders from realizing a premium over
the market price for their shares of our common stock.



| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | The delisting of our common stock due to
    our low stock price will adversely affect the liquidity of our
    common stock.

On February 14, 2002, Nasdaq advised us that
the bid price of our common stock had been less than the minimum
of $1.00 and the market value of our publicly-held stock had
been less than the minimum of $5,000,000 for 30 consecutive
trading days and that we would be provided 90 calendar days, or
until May 15, 2002, to regain compliance with these
required listing criteria. Our common stock did not meet these
criteria and on May 15, 2002, we applied for a transfer to
the Nasdaq Smallcap Market. While our application for transfer
was under review by Nasdaq, our common stock continued to be
listed on the Nasdaq National Market. In July 2002, our board of
directors decided to withdraw our application for transfer in
light of the significant associated costs. On August 5,
2002, Nasdaq advised us that our common stock would be delisted

29



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##### Table of Contents



on August 13, 2002. We do not intend to
request review of Nasdaqs delisting decision as permitted
by Nasdaqs rules.


The delisting of our common stock could adversely
affect the liquidity of our common stock. Such delisting could
make trading our shares more difficult for investors, increase
trading spreads and adversely affect investors perception
of us and our prospects, any of which could lead to declines in
our share price. Delisting could also make it more difficult for
us to raise additional capital. We will also incur additional
costs under state blue sky laws to sell equity as a result of
such delisting.



| |                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | We are currently involved in litigation
    that could divert managements time and attention and may
    be time-consuming and expensive to defend.

On September 17, 2001, The Gwydion Company,
LLC and its members filed direct and stockholder derivative
lawsuits against us and certain of our current and former
directors and officers claiming breach of contract, fraud,
intentional and negligent misrepresentation, and breach of
fiduciary duty, and requesting damages and attorneys fees.
On January 10, 2002, our challenge to the shareholder
derivative lawsuit was sustained without leave to amend and on
January 17, 2002, the court entered judgment in favor of us
and against Gwydion and its members. The direct suit for breach
of contract and fraud remains pending. While we believe that the
plaintiffs direct claims are without merit and intend to
vigorously defend ourselves against them, we cannot predict the
ultimate outcome of the pending action.

On November 16, 2001, a purported
stockholder class action lawsuit was filed against us, certain
of our current and former directors and officers and certain
underwriters of our initial public offering of common stock.
This lawsuit purports to bring suit on behalf of all purchasers
of our common stock between August 8, 2000, the effective
date of our initial public offering, and December 6, 2000.
The plaintiffs allege, among other things, that our prospectus,
incorporated in our Registration Statement on Form S-1
filed with the Securities and Exchange Commission, was
materially false and misleading because it failed to disclose,
among other things, that certain underwriters allegedly
(i) solicited and received excessive and undisclosed
commissions from certain investors in exchange for which such
underwriters allocated to those investors substantial portions
of the shares issued in our initial public offering, and
(ii) entered into agreements with customers whereby the
underwriters agreed to allocate shares of our common stock to
those customers in our initial public offering in exchange for
which the customers agreed to purchase additional shares of our
common stock in the aftermarket at pre-determined prices. The
plaintiffs seek unspecified damages and other relief. We believe
that we have meritorious defenses and intend to vigorously
defend ourselves against these allegations.

In connection with these lawsuits, we expect to
incur substantial legal and other expenses. In addition, this
litigation could divert the efforts and attention of our
management. Such expenses and diversion of resources associated
with this litigation could seriously harm our business and
financial condition.



| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | Variable plan accounting treatment of
    certain outstanding stock options may have a significant adverse
    impact on our stated expenses.

In November 2001, we extended an offer to our
eligible employees and directors to cancel stock options with
exercise prices greater than $0.30 per share and to grant
replacement stock options with an exercise price equal to the
quoted market price of our common stock at December 27,
2001,one day before the expiration of the offer. On
December 28, 2001, we granted replacement options to
purchase an aggregate of 3,143,628 shares of our common stock at
$0.29 per share to eligible employees and directors who accepted
the offer in a one-for-one exchange for such cancelled stock
options. Each replacement option will vest monthly over one year
following the date of grant and will expire 18 months after the
date of grant. We will account for all such replacement options,
as well as eligible options to purchase an aggregate of 69,770
shares of common stock which were not exchanged, under the
variable accounting method and will revalue these stock options
at the end of each reporting period until the options are
exercised, forfeited, or expire unexercised; the resulting
charge will be recorded as compensation expense. In the case of
the unexchanged stock options to purchase 69,770 shares,
the variable accounting treatment may be in effect up to
10 years from the date of grant. The higher the market
value of our common stock, the greater the compensation expense
we will record. To date,

30



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##### Table of Contents



we have not recorded any compensation expense
under the variable accounting method in connection with the
stock option exchange due to the low price of our common stock.





Item 3.     Quantitative
and Qualitative Disclosures of Market Risk

We believe we do not have any significant
exposures to quantitative and qualitative market risks. For the
three months ended June 28, 2002, we did not have any
derivative financial instruments or any derivative commodity
instruments. Our financial instruments include trade accounts
receivable, trade accounts payable, convertible subordinated
debentures and a term note. Our accounts receivable and accounts
payable are relatively short term in duration and, as a
consequence, are not exposed to significant interest rate
changes and consequent fair value adjustments. Our cash
equivalents are invested in interest-bearing accounts, generally
money market accounts of less than seven days average
maturity, and as a result are not subject to significant
valuation adjustments due to interest rate changes. Our
financial market risk includes risks associated with
international operations and related foreign currencies. We
anticipate that international sales will continue to account for
a significant portion of our consolidated revenues. Most of our
international sales are in U.S. dollars and, therefore, are
not subject to foreign currency exchange rate risk. At
June 28, 2002, none of our ending accounts receivable were
denominated in a foreign currency and as a result, we were not
subject to foreign currency exchange risk. Expenses of our
international operations are denominated in each countrys
local currency and are subject to foreign currency exchange
risk. Expenses in our international operations primarily consist
of payroll-related costs and have not been significant. Through
June 28, 2002, we have not experienced any significant
negative impact on our operations as a result of fluctuations in
foreign currency exchange rates.




PART II.     OTHER
INFORMATION




Item 1.     Legal
Proceedings

In November 1999, in connection with the
Companys acquisition of substantially all of the assets of
The Gwydion Company, LLC, the Company issued 573,334 shares
of the Companys common stock to the members of Gwydion,
Harry Ayvazian and Gary Grimes. These shares were to be held in
an escrow account and subject to the Companys right of
repurchase for $1.00 in the aggregate until certain performance
criteria were met. In May 2001, the Company filed an escrow
claim with Gwydion and the escrow agent to assert the
Companys right under the Gwydion acquisition agreement to
repurchase the 573,334 shares issued as consideration.
Gwydion and its members have disputed this claim and on
September 17, 2001 filed direct and stockholder derivative
lawsuits in the Superior Court of the State of California for
the County of Santa Clara against the Company and
Kenneth L. Kenitzer, Timothy A. Marcotte,
Chris L. Branscum, John E. Bosch, Bandel Carano,
Richard G. Grey, Perry M. LaForge and Alessandro A.
Piol in their capacities as the Companys current and
former directors and officers. The Company initially reported
these legal proceedings in the Companys Quarterly Report
on Form 10-Q for the quarter ended September 28, 2001
and subsequently reported them in the Companys Quarterly
Report on Form 10-Q for the quarter ended December 28,
2001 and the Companys Annual Report on Form 10-K for
the fiscal year ended March 29, 2002.

In the stockholder derivative action, the
plaintiffs alleged that, among other things, the defendants
(i) made untrue representations in connection with the
acquisition agreement, (ii) entered into the acquisition
agreement with no intention of committing the resources
necessary to the success of the Gwydion project, and
(iii) contributed to the decrease in value of the
Companys stock; claimed fraud, intentional and negligent
misrepresentation, and breach of fiduciary duty; and requested
damages and attorneys fees. In the direct lawsuit, the
plaintiffs allege that, among other things, the defendants
engaged in conduct that precluded the plaintiffs from fulfilling
their obligations under the Gwydion acquisition agreement, claim
breach of contract and fraud, and request compensatory and
punitive and/or exemplary damages, costs and attorneys
fees. On January 10, 2002, the Companys challenge to
the stockholder derivative lawsuit was sustained without leave
to amend and on January 17, 2002, the court entered
judgment in favor of the Company and against Gwydion and its
members. The direct suit for breach of contract and fraud
remains pending. While the Company

31



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##### Table of Contents



believes that the plaintiffs direct claims
are without merit and intends to vigorously defend itself
against them, the Company cannot predict the ultimate outcome of
the pending action.


On November 16, 2001, the Company,
Chris L. Branscum, Kenneth Kenitzer, Timothy Marcotte and
certain underwriters of the Companys initial public
offering (IPO) of its common stock were named as
defendants in a class action shareholder complaint filed in the
United States District Court for the Southern District of New
York, now consolidated under the caption In re Repeater
Technologies, Inc. Initial Public Offering Securities
Litigation, Case No. 01-CV-10140. This lawsuit purports to
bring suit on behalf of all purchasers of the Companys
common stock between August 8, 2000, the effective date of
the Companys IPO, and December 6, 2000. In the
complaint, the plaintiffs allege that the Company, certain of
its officers and directors and the underwriters of its IPO
violated the federal securities laws because the Companys
IPO registration statement and prospectus contained untrue
statements of material fact or omitted material facts regarding
the compensation to be received by, and the stock allocation
practices of, the IPO underwriters. The plaintiffs seek
unspecified monetary damages and other relief. Similar
complaints were filed in the same Court against hundreds of
other public companies that conducted IPOs of their common stock
in the late 1990s (the IPO Lawsuits).

On August 8, 2001, the IPO Lawsuits were
consolidated for pretrial purposes before United States Judge
Shira Scheindlin of the Southern District of New York. Judge
Scheindlin held an initial case management conference on
September 7, 2001, at which time she ordered, among other
things, that the time for all defendants to respond to any
complaint be postponed until further order of the Court. Thus,
the Company has not been required to answer the complaint, and
no discovery has been served on the Company.

In accordance with Judge Scheindlins orders
at further status conferences in March and April 2002, the
appointed lead plaintiffs counsel filed amended,
consolidated complaints in the IPO Lawsuits on April 19,
2002. Defendants then filed a global motion to dismiss the IPO
Lawsuits on July 15, 2002, as to which the Court does not
expect to issue a decision until at least November 2002. The
Company believes that this lawsuit is without merit and intends
to defend against it vigorously. The Company initially reported
these legal proceedings in its Quarterly Report on
Form 10-Q for the quarter ended December 28, 2001 and
subsequently reported them in its Annual Report on
Form 10-K for the fiscal year ended March 29, 2002.






|        |                                              
|------- | ---------------------------------------------
|Item 2. | Changes in Securities and Use of
    Proceeds

On August 8, 2000, the Securities and
Exchange Commission declared effective our registration
statement on Form S-1 (No. 333-31266) relating to the
initial public offering of our common stock.

The net offering proceeds to us from our initial
public offering, after deducting the underwriting discounts and
commissions and offering expenses, were approximately
$42.3 million. The majority of the proceeds have been used
for expansion of sales, marketing and future development of our
products and for general corporate purposes, including working
capital. We intend to use the remaining proceeds to support our
operations and to provide working capital.






|        |                                    
|------- | -----------------------------------
|Item 3. | Defaults Upon Senior
    Securities

Not applicable.






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

Not applicable.






|        |                  
|------- | -----------------
|Item 5. | Other Information

Not applicable.

32



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##### Table of Contents








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

(a) Exhibits

|        |           |                         |  |                                                                                                                                                                                                       
|------- | --------- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |           |                        
|Number  |           | Description of Document
|        |           |                        
|        | 3.1(1)    |                         |  | Amended and Restated Certificate of Incorporation
    of the registrant.                                                                                                                              
|        | 3.3(2)    |                         |  | Bylaws of the registrant, as currently in effect.                                                                                                                                                     
|        | 4.1(2)    |                         |  | Specimen Common Stock Certificate.                                                                                                                                                                    
|        | 4.2(2)    |                         |  | Amended and Restated Preferred Stock Purchase
    Warrant, dated August 6, 1997, issued to Lighthouse Capital
    Partners II, L.P.                                                                   
|        | 4.3(2)    |                         |  | Warrant to Purchase Shares of Series DD
    Preferred Stock of Repeater Technologies, Inc., dated
    January 25, 1999, issued to Phoenix Leasing Incorporated.                                       
|        | 4.4(2)    |                         |  | Stock Subscription Warrant to Purchase
    Series DD Preferred Stock of Repeater Technologies, Inc.,
    dated July 8, 1999, issued to TBCC Funding Trust II.                                         
|        | 4.5(2)    |                         |  | Seventh Amended and Restated Investors
    Rights Agreement, dated July 11, 2000.                                                                                                                    
|        | 4.6(2)    |                         |  | Form of Warrant to Purchase Shares of
    Series EE Preferred Stock.                                                                                                                                  
|        | 4.7(3)    |                         |  | Certificate of Designation of Series A
    Junior Participating Preferred Stock.                                                                                                                      
|        | 4.8(3)    |                         |  | Rights Agreement, dated as of August 9,
    2001, between Repeater Technologies, Inc. and U.S. Stock
    Transfer Corporation, including Form of Right Certificate.                                   
|        | 10.13(4)* |                         |  | Change of Control Agreement, dated May 3,
    2002, between Chris L. Branscum and Repeater Technologies,
    Inc.                                                                                     
|        | 10.14(4)* |                         |  | Change of Control Agreement, dated May 3,
    2002, between Joel J. Spina and Repeater Technologies, Inc.                                                                                             
|        | 10.15(4)* |                         |  | Change of Control Agreement, dated May 3,
    2002, between John L. Soliday and Repeater Technologies,
    Inc.                                                                                       
|        | 10.16(4)* |                         |  | Change of Control Agreement, dated May 15,
    2002, between John E. Bosch and Repeater Technologies, Inc.                                                                                            
|        | 10.18(4)* |                         |  | Form of Retention Agreement between Repeater
    Technologies, Inc. and each of Chris L. Branscum,
    Timothy A. Marcotte, Joel J. Spina and John L.
    Soliday.                                    
|        | 10.19     |                         |  | Amendment to Settlement and Release Agreement,
    dated as of July 5, 2002, between Repeater Technologies,
    Inc. and Sanmina-SCI Corporation.                                                     
|        | 99.1      |                         |  | Certification of the registrants Chief
    Executive Officer and Chief Financial Officer pursuant to
    Section 906 of the Public Company Accounting Reform and
    Investor Protection Act of 2002.



---



|    |                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 30, 2000, filed with the Commission on
    September 20, 2000.
|   
|(2) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants
    Registration Statement on Form S-1, as amended
    (No. 333-31266), declared effective by the Commission on
    August 8, 2000.     
|   
|(3) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 29, 2001, filed with the Commission on
    August 13, 2001.   
|   
|(4) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants Annual
    Report on Form 10-K for the fiscal year ended
    March 29, 2002, filed with the Commission on June 27,
    2002.            
|   
|*   | Denotes a management contract or compensatory
    plan or arrangement.                                                                                                                                                              



| |     |                    
| | --- | -------------------
| | (b) | Reports on Form 8-K

No reports on Form 8-K were filed during the
three months ended June 28, 2002.

33



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##### Table of Contents






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.



| |                            
| | ---------------------------
| | REPEATER TECHNOLOGIES, INC.



| |     |                        
| | --- | -----------------------
| | BY: | /s/ TIMOTHY A. MARCOTTE

| |                                             
| | --------------------------------------------
| |                                             
| | Timothy A. Marcotte                         
| | Executive Vice President,                   
| | Chief Operating Officer                     
| | and Chief Financial Officer                 
| | (Principal Financial and Accounting Officer)

Date: August 9, 2002

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##### Table of Contents






EXHIBIT INDEX

|        |           |                         |  |                                                                                                                                                                                                       
|------- | --------- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |           |                        
|Number  |           | Description of Document
|        |           |                        
|        | 3.1(1)    |                         |  | Amended and Restated Certificate of Incorporation
    of the registrant.                                                                                                                              
|        | 3.3(2)    |                         |  | Bylaws of the registrant, as currently in effect.                                                                                                                                                     
|        | 4.1(2)    |                         |  | Specimen Common Stock Certificate.                                                                                                                                                                    
|        | 4.2(2)    |                         |  | Amended and Restated Preferred Stock Purchase
    Warrant, dated August 6, 1997, issued to Lighthouse Capital
    Partners II, L.P.                                                                   
|        | 4.3(2)    |                         |  | Warrant to Purchase Shares of Series DD
    Preferred Stock of Repeater Technologies, Inc., dated
    January 25, 1999, issued to Phoenix Leasing Incorporated.                                       
|        | 4.4(2)    |                         |  | Stock Subscription Warrant to Purchase
    Series DD Preferred Stock of Repeater Technologies, Inc.,
    dated July 8, 1999, issued to TBCC Funding Trust II.                                         
|        | 4.5(2)    |                         |  | Seventh Amended and Restated Investors
    Rights Agreement, dated July 11, 2000.                                                                                                                    
|        | 4.6(2)    |                         |  | Form of Warrant to Purchase Shares of
    Series EE Preferred Stock.                                                                                                                                  
|        | 4.7(3)    |                         |  | Certificate of Designation of Series A
    Junior Participating Preferred Stock.                                                                                                                      
|        | 4.8(3)    |                         |  | Rights Agreement, dated as of August 9,
    2001, between Repeater Technologies, Inc. and U.S. Stock
    Transfer Corporation, including Form of Right Certificate.                                   
|        | 10.13(4)* |                         |  | Change of Control Agreement, dated May 3,
    2002, between Chris L. Branscum and Repeater Technologies, Inc.                                                                                         
|        | 10.14(4)* |                         |  | Change of Control Agreement, dated May 3,
    2002, between Joel J. Spina and Repeater Technologies, Inc.                                                                                             
|        | 10.15(4)* |                         |  | Change of Control Agreement, dated May 3,
    2002, between John L. Soliday and Repeater Technologies,
    Inc.                                                                                       
|        | 10.16(4)* |                         |  | Change of Control Agreement, dated May 15,
    2002, between John E. Bosch and Repeater Technologies, Inc.                                                                                            
|        | 10.18(4)* |                         |  | Form of Retention Agreement between Repeater
    Technologies, Inc. and each of Chris L. Branscum,
    Timothy A. Marcotte, Joel J. Spina and John L.
    Soliday.                                    
|        | 10.19     |                         |  | Amendment to Settlement and Release Agreement,
    dated as of July 5, 2002, between Repeater Technologies,
    Inc. and Sanmina-SCI Corporation.                                                     
|        | 99.1      |                         |  | Certification of the registrants Chief
    Executive Officer and Chief Financial Officer pursuant to
    Section 906 of the Public Company Accounting Reform and
    Investor Protection Act of 2002.



---



|    |                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 30, 2000, filed with the Commission on
    September 20, 2000.
|   
|(2) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants
    Registration Statement on Form S-1, as amended
    (No. 333-31266), declared effective by the Commission on
    August 8, 2000.     
|   
|(3) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants
    Quarterly Report on Form 10-Q for the quarterly period
    ended June 29, 2001, filed with the Commission on
    August 13, 2001.   
|   
|(4) | Incorporated by reference from the
    correspondingly numbered exhibit to the registrants Annual
    Report on Form 10-K for the fiscal year ended
    March 29, 2002, filed with the Commission on June 27,
    2002.            
|   
|*   | Denotes a management contract or compensatory
    plan or arrangement.                                                                                                                                                              

35