<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

For the period ended SEPTEMBER 30, 2002

                                       OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

                          Commission File No.: 0-27878

                           NORTHGATE INNOVATIONS, INC.
                         (Name of issuer in its charter)

                Delaware                                 13-3779546
      (State or other jurisdiction                      (IRS Employer
    of incorporation or organization)                Identification No.)

              801 Sentous Street, City of Industry, California 91748
               (Address of principal executive offices)(Zip code)

                    Issuer's telephone number: (626) 923-6000

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

The number of shares outstanding of each of the issuer's classes of publicly
traded common equity; as of November 12, 2002 was 14,736,665 shares of Common
Stock.



<PAGE>

                           NORTHGATE INNOVATIONS, INC.

                               INDEX TO FORM 10-Q

PART I - FINANCIAL INFORMATION                                             Page
                                                                           ----

Item 1  Financial Statements

Consolidated Balance Sheets.................................................  3

Consolidated Statements of Operations.......................................  4

Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive
Income (Loss) ........................... ..................................  5

Consolidated Statements of Cash Flows.......................................  6

Condensed Notes to Consolidated Financial Statements........................  7

Item 2 - Management's Discussion and Analysis of Financial  Condition
and Results of Operations...................................................  8

Item 4 - Controls and Procedures............................................ 13

PART II - OTHER INFORMATION

Item 6 -  Exhibit and Reports on Form 8-K................................... 13

SIGNATURE................................................................... 13

CERTIFICATIONS ........................... ................................. 14



<PAGE>

                           NORTHGATE INNOVATIONS, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except par value)

                          ASSETS                     SEPTEMBER 30, DECEMBER 31,
                                                          2002         2001
                                                        --------     --------
                                                      (unaudited)

Current Assets:
Cash and cash equivalents                               $   163      $ 7,178
Certificates of deposit                                   1,201          187
Marketable securities                                       961        1,377
Accounts receivable, net of allowance for doubtful
  accounts and estimated returns of $280 at September
  30, 2002 and $254 at December 31, 2001                  5,967        9,475
Inventories                                               4,270        3,944
Advances to Mcglen Internet Group, Inc.                       -          845
Prepaid expenses and other current assets                   255          182
Deferred tax - current                                      391          123
                                                        --------     --------
              Total current assets                       13,208       23,311
                                                        --------     --------
Equipment, net                                              919          750
Deferred tax asset - long term                            1,325            -
Goodwill                                                  4,145            -
Other assets                                                 76           30
                                                        --------     --------
                                                        $19,673      $24,091
                                                        ========     ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
Accounts payable                                        $ 5,233      $10,048
Securities sold short                                         -          426
Accrued expenses                                            571        1,076
Line of credit                                            1,282            -
Accrued royalties                                         2,748        4,999
Income taxes payable                                        650        1,053
Convertible notes payable                                   100            -
Dividends payable                                             -          186
ESOP interest payable                                         -          278
                                                        --------     --------
              Total current liabilities                  10,584       18,066
                                                        --------     --------
Notes payable - long term                                 1,300        1,300
ESOP loan payable                                         7,496        7,963
                                                        --------     --------

              Total liabilities                          19,380       27,329
                                                        --------     --------

Stockholders' equity (deficit):
Preferred stock, no par value; 5,000 shares
  authorized, 1,350 issued and outstanding                  285          285
Common stock, $0.03 par value; authorized 50,000
  shares, 14,737 and 9,854 shares issued and
  outstanding in 2002 and 2001, respectively                442            -
Additional paid in capital                                3,308            -
Accumulated other comprehensive loss                       (853)        (496)
Retained earnings                                         3,786        3,748
                                                        --------     --------
                                                          6,730        3,537
Unearned ESOP shares                                     (6,675)      (6,775)
                                                        --------     --------
              Total stockholders' equity (deficit)          293       (3,238)
                                                        --------     --------
                                                        $19,673      $24,091
                                                        ========     ========

    See accompanying condensed notes to the consolidated financial statements

                                        3


<PAGE>
<TABLE>
                                         NORTHGATE INNOVATIONS, INC.
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                                 (unaudited) (in thousands,
                                    except per share data)
<CAPTION>

                                                        FOR THE THREE MONTHS    FOR THE NINE MONTHS
                                                         ENDED SEPTEMBER 30,    ENDED SEPTEMBER 30,
                                                         2002         2001       2002        2001
                                                       ---------   ---------   ---------   ---------
<S>                                                    <C>         <C>         <C>         <C>
Net sales                                               $18,562    $ 18,733     $53,639    $ 40,951

Cost of sales                                            16,171      16,163      46,297      35,752
                                                       ---------   ---------   ---------   ---------

Gross profit                                              2,391       2,570       7,342       5,199
Operating expenses                                        2,304       2,123       6,961       4,913
                                                       ---------   ---------   ---------   ---------
Income from operations                                       87         447         381         286
                                                       ---------   ---------   ---------   ---------

Interest expense                                            154         159         447         471

Interest income                                             (46)        (54)       (121)       (174)

Other expense (income)                                     (144)        (44)          5      (1,117)
                                                        ---------   ---------   ---------   ---------
  Total other                                               (36)         61         331        (820)
                                                        ---------   ---------   ---------   ---------
Income before taxes                                         123         386          50       1,106

Provision for income taxes                                   45         128          12         345
                                                       ---------   ---------   ---------   ---------

Net income                                             $     78    $    258    $     38      $  761
                                                       =========   =========   =========   =========

Basic and diluted net income per share                 $   0.00    $   0.03    $   0.00    $   0.08
                                                       =========   =========   =========   =========

Weighted average shares of common stock outstanding:
              Basic                                      14,737       9,854      13,381       9,854
                                                       =========   =========   =========   =========
              Diluted                                    16,927      10,129      15,571      10,454
                                                       =========   =========   =========   =========


                       See accompanying condensed notes to the consolidated financial statements

                                                      4
</TABLE>
<PAGE>
<TABLE>
                                                     NORTHGATE INNOVATIONS, INC.
                                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                                   AND COMPREHENSIVE INCOME (LOSS)
                                                             (unaudited)
                                                           (in thousands)
<CAPTION>

                                                                           ACCUMULATED                           TOTAL      COMPRE-
                                                                 ADDITIONAL   OTHER      UNEARNED             STOCKHOLDERS' HENSIVE
                        PREFERRED STOCK         COMMON STOCK      PAID-IN  COMPREHENSIVE  ESOP      RETAINED     EQUITY     INCOME
                       SHARES     AMOUNT     SHARES     AMOUNT    CAPITAL      LOSS       SHARES    EARNINGS    (DEFICIT)   (LOSS)
                      ---------  ---------  ---------  ---------  ---------  ---------   ---------  ---------   ---------  ---------
<S>                      <C>     <C>          <C>      <C>        <C>        <C>         <C>        <C>         <C>
Balance at
  January 1, 2002        1,350   $    285      3,150                         $   (496)   $ (6,775)  $  3,748    $ (3,238)
Unrealized loss
  on marketable
  securities, net
  of tax                                                                         (357)                              (357)  $   (357)
Stock split in
  connection with
  reverse acquisition                          6,704   $    296   $   (296)                                           --
Shares issued in
  recapitalization                             4,873        146      3,694                                         3,840
Shares issued to
  consultant                                      10                    10                                            10
Decrease in fair
  value of released
  ESOP shares, net
  of tax                                                              (100)                   100                     --
Net income                                                                                                38          38         38
                      ---------  ---------  ---------  ---------  ---------  ---------   ---------  ---------   ---------  ---------
Total comprehensive
  loss                                                                                                                     $   (319)
                                                                                                                           =========
Balance at September
  30, 2002               1,350   $    285     14,737   $    442   $  3,308   $   (853)   $ (6,675)  $  3,786    $   293
                      =========  =========  =========  =========  =========  =========   =========  =========   ========

                              See accompanying condensed notes to the consolidated financial statements

                                                                  5

</TABLE>

<PAGE>

                           NORTHGATE INNOVATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)
                                                             For the nine months
                                                             ended September 30,
                                                               2002       2001
                                                             --------   --------
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
   Net income                                               $     38    $   761
   Adjustments to reconcile net (loss) income to net
   cash (used in) provided by operating activities:
   Depreciation and amortization                                 195         79
   Stock issued for services                                      10          -
   Gain on debt settlements                                      (50)         -
   Deferred income taxes                                          45          -
   Provision for losses on accounts receivable                    24        (66)
   Inventory reserves                                             61         68
   Changes in operating assets and liabilities, net
   of Mcglen acquisition:
     Accounts receivable                                       4,059     (4,410)
     Inventories                                                 (39)      (687)
     Prepaid expenses and other current assets                   (45)      (795)
     Advances to Mcglen                                         (307)      (859)
     Other assets                                                (46)
     Accounts payable                                         (5,875)     2,616
     Accrued expenses                                           (890)      (131)
     Accrued royalties                                        (2,251)       977
     Income taxes payable                                       (403)       817
     ESOP interest payable                                      (278)      (656)
     Unearned revenue                                              -        585
                                                             --------   --------
   Total adjustments                                          (5,790)    (2,462)
                                                             --------   --------
Net cash used in operating activities                         (5,752)    (1,701)
                                                             --------   --------

Cash flows from investing activities:
         Purchases of equipment                                 (269)      (310)
         Purchases of marketable securities                   (3,006)   (18,748)
         Proceeds from sale of marketable securities           2,329     18,511
         Purchases of investments                               (200)         -
         Sales of investments                                     200          -
         Certificates of deposit                              (1,014)     1,095
         Cash acquired in Mcglen purchase                        108          -
                                                             --------   --------
Net cash (used in) provided by investing activities           (1,852)       548
                                                             --------   --------

Cash flows from financing activities:
     Payments of dividends                                      (186)       (96)
     Payment on ESOP debt                                       (467)      (617)
     Borrowings on line of credit                              1,282          -
     Payments on line of credit                                  (40)         -
                                                             --------   --------
Net cash provided by (used in) financing activities              589       (713)
                                                             --------   --------
   Net decrease in cash and cash equivalents                  (7,015)    (1,866)

   Cash and cash equivalents beginning of period               7,178      2,884
                                                             --------   --------

   Cash and cash equivalents end of period                   $   163    $ 1,018
                                                             ========   ========

The Company paid $825 and $1,097 for interest and $417 and $0 for taxes, during
the nine months ended September 30, 2002 and 2001, respectively. See Note 2 for
non-cash investing activities.

    See accompanying condensed notes to the consolidated financial statements

                                        6


<PAGE>

NORTHGATE INNOVATIONS, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The consolidated interim financial statements include the accounts of Northgate
Innovations, Inc. (a Delaware corporation) (formerly Mcglen Internet Group, Inc.
"Mcglen") and its wholly owned subsidiaries ("Northgate" or the "Company") and
have been prepared, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such regulations. These financial statements should be read in
conjunction with the audited financial statements and the notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31, 2001
and Form 8-K filed on May 20, 2002.

In the opinion of management, the accompanying financial statements contain all
adjustments necessary to present fairly the financial position of the Company at
September 30, 2002 and 2001, and the results of operations and cash flows for
the three and nine months ended September 30, 2002 and 2001. The results of
operations for the interim periods are not necessarily indicative of the results
of operations for the full year.

2. OVERVIEW AND RECENT DEVELOPMENTS

The Company is a developer, manufacturer and distributor of innovative PCs,
peripherals, software, and over 100,000 computer products. The Company
specializes in selling its computers through television shopping networks, mail
order catalog companies and large electronic chain stores as well as targeting
specific business-to-business and business-to-consumer markets through the
Internet. The operations division, which includes a call center, sourcing,
warehousing, fulfillment, accounting, business development and information
technology, supports order processing, logistics, customer service, financial
transactions and core technology for the business divisions located in the City
of Industry, California. The business divisions include sales, marketing,
content management, product management and service management teams focused on
building unique customer experiences for each business division.

On October 11, 2000, Northgate entered into an agreement and plan of merger with
Lan Plus Corporation (Lan Plus). Lan Plus is a manufacturer of both
private-label and branded turnkey computer products and services, with over ten
years of operating history. On March 21, 2001, the companies entered into an
amended and restated merger agreement that, among other things, eliminated
certain conditions to closing contained in the original merger agreement. The
amended and restated merger agreement was subsequently amended several times,
ending on March 14, 2002. Upon the close of the merger on March 20, 2002, Lan
Plus shareholders received approximately 3.128 shares of Northgate common stock
for each Lan Plus share they owned, and owned approximately seventy-five (75%)
of the outstanding stock of Northgate (after taking into account a 10:1 reverse
split that took place immediately prior to the close of the merger). The
historical equity section of the balance sheet and earnings per share
information have been retroactively restated to reflect the exchange ratio
established in the merger agreement. In addition, the Company changed its name
to Northgate Innovations, Inc. Pursuant to the merger agreement, upon close of
merger, the Company's accounts payable to, and advances from Lan Plus, in the
amount of approximately $2.3 million was converted to common stock eliminating
the debt; the stock was then retired to Treasury and cancelled.

Although Lan Plus was merged into a subsidiary of Northgate, the merger was
accounted for as a reverse acquisition since Lan Plus shareholders controlled
the combined entity after the merger. As a result, for financial accounting
purposes, the merger is treated as a purchase of Northgate by Lan Plus.
Therefore, the historical financial statements of Lan Plus are presented for
comparison purposes for all periods presented.

After the 10:1 reverse stock split, Mcglen shareholders held 4,872,583 shares of
Northgate's $0.03 par value common stock. For accounting purposes, the shares
retained by Mcglen in the merger were valued on Lan Plus' books as an issuance
of new shares at $0.788 per share (after the 10:1 reverse stock split and based
on the weighted average closing price of the shares just prior to and after the
merger date).

                                        7

<PAGE>

The following represents the estimated fair value of net assets acquired by Lan
Plus in the reverse acquisition at March 14, 2002 (in thousands):

        Cash                                                     $    108
        Other current assets                                          879
        Fixed assets                                                   95
        Deferred income taxes                                       1,400
        Intangibles                                                 4,145
        Accounts payable and accrued expenses                      (1,278)
        Inter-company payables                                     (1,152)
        Notes payable                                                (357)
                                                                 ---------
                                                                 $  3,840
                                                                 =========

Deferred income taxes represent the Company's estimate of Mcglen's net operating
loss carryforwards ("NOLs") that can be used to offset Northgate's future
taxable income, after considering limitations imposed on NOLs upon a change in
control.

Intangibles represent the excess of the purchase price of Mcglen over the
estimated fair value of the tangible assets acquired. The Company has not yet
determined if any specifically identifiable intangibles should be recorded
related to this purchase in accordance with Statement of Financial Accounting
Standards (SFAS) No. 141. Any unidentified intangibles will be reflected as
non-amortizable goodwill and will be evaluated periodically for recoverability
in accordance with SFAS No. 142. For the nine months ended September 30, 2002,
the Company has recorded no intangible amortization.

On a pro forma basis, the statements of operations would have been as follows
for the nine months ended September 30 if the acquisition had occurred on
January 1, 2002 and 2001, respectively:

         (in thousands, except per share data)        2002        2001
                                                    -------      -------
         Net sales                                  $58,078      $51,801
         Gross profit                                 7,832        6,943
         Income (loss) before taxes and
                  extraordinary item                     44         (601)
         Extraordinary item, gain on debt settlements     -          639
         Net income                                      32           38
         Net income per share                        ($0.00)      ($0.00)

In May and June 2002, the Company issued approximately 500,000 stock options to
employees with exercise prices ranging from $0.35 to $0.50. These options vest
over three to five years.

3. SUBSEQUENT EVENTS

In October 2002, the Company repaid its line of credit and extended the line to
January 31, 2003.

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

As used in the following section, "Northgate", "we", "the Company" and "our"
refer to Northgate Innovations, Inc., unless the context requires otherwise.

The following discussion and analysis of Northgate's financial condition and
results of operations should be read in conjunction with Northgate's unaudited
condensed consolidated financial statements and the notes thereto included
elsewhere herein. The following table sets forth for the periods indicated the
percentage of net sales represented by certain items reflected in the Company's
consolidated statements of operations. There can be no assurance that the trends
in sales growth or operating results will continue in the future.

OVERVIEW

Northgate was incorporated in the State of Delaware in 1994 and is a leading
marketer of personal computers, or PCs, and related products and services.
Northgate manufactures, markets, and supports a broad line of desktop PCs,
servers and workstations used by individuals, families, businesses, government
agencies and educational institutions. Northgate also offers diversified
products and services such as software, peripherals, Internet access services,
support programs and general merchandise.

                                        8


<PAGE>

Net sales of the Company are primarily derived from the sale of personal
computer hardware, software, peripherals and accessories. Gross profit consists
of net sales less product and shipping costs.

Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses Northgate's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the 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. On an on-going basis, management evaluates its
estimates and judgments, including those related to customer incentives, product
returns, bad debts, inventories, intangible assets, financing operations,
warranty obligations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Management believes the following critical accounting policies, among others,
affect its more significant judgments and estimates used in the preparation of
its consolidated financial statements:

Northgate maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. If the
financial condition of Northgate's customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may be
required.

Northgate provides for the estimated cost of product warranties at the time
revenue is recognized. While the products Northgate sells are covered by third
party manufacturer warranties, Northgate may have products returned by customers
that Northgate may not be able to recover from the manufacturer. Returns of this
nature have been immaterial in the past; however, should actual product failure
rates increase or the manufacturers go out of business, Northgate may be forced
to cover these warranty costs and the costs may differ from Northgate's
estimates.

Northgate writes down its inventory for estimated obsolescence or unmarketable
inventory equal to the difference between the cost of inventory and the
estimated market value based upon assumptions about future demand and market
conditions. If actual future demand or market conditions are less favorable than
those projected by management, additional inventory write-downs may be required.

Northgate's management assesses the impairment of identifiable intangibles, and
related goodwill whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Factors we consider important which could
trigger an impairment review include the following:

o        significant underperformance relative to historical or projected future
         operating results;
o        significant changes in the manner of our use of the acquired assets or
         the strategy for our overall business; and
o        significant negative industry or economic trends.

When management determines that the carrying value of intangibles, and related
goodwill may not be recoverable based upon the existence of one or more of the
above indicators of impairment, it measures the impairment based on a projected
discounted cash flow method using a discount rate determined by management to be
commensurate with the risk inherent in our current business model.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage of net
sales represented by certain items reflected in the Company's condensed
statements of operations. There can be no assurance that the trends in sales
growth or operating results will continue in the future.

                                        9


<PAGE>
<TABLE>
<CAPTION>

                                                   PERCENTAGE OF NET SALES
                                                    -----------------------
                                       THREE MONTHS ENDED SEPT 30,   NINE MONTHS ENDED SEPT 30,
                                       2002               2001         2002          2001
                                       ----               ----         ----          ----
<S>                                   <C>                <C>          <C>             <C>
     Net sales                        100.0%             100.0%       100.0%          100.0%
     Cost of sales                     87.1               86.3         86.3            87.3
                                      ------             ------       ------          ------
     Gross profit                      12.9               13.7         13.7            12.7
     Operating expenses                12.4               11.3         13.0            12.0
                                      ------             ------       ------          ------
     Income from operations             0.5                2.4          0.7             0.7
     Other (income) expense            (0.2)               0.3          0.6            (2.0)
                                      ------             ------       ------          ------
     Income before income taxes         0.7                2.1          0.1             2.7
     Provision for taxes                0.2                0.7          0.0             0.8
                                      ------             ------       ------          ------
     Net income                         0.5%               1.4%         0.1%            1.9%
                                      ======             ======       ======          ======
</TABLE>

Three Months Ended September 30, 2002 Compared to the Three Months Ended
September 30, 2001

Net sales decreased by $0.1 million, or 0.5%, to $18.6 million for the three
months ended September 30, 2002, compared to $18.7 million for the three months
ended September 30, 2001. The decrease in net sales was a result of a decrease
in the number of computer systems shipped during the period due to increased
competition in the marketplace. The results for the three months ended September
30, 2002 also include revenues for Mcglen for the period July 1, 2002 through
September 30, 2002.

Gross profit decreased by $0.2 million or 8.0% to $2.4 million for the three
months ended September 30, 2002, compared to $2.6 million for the period ended
September 30, 2001. The decrease in gross profit was due to the decrease in
sales and a higher percentage of peripheral sales in 2002. Gross profit, as a
percentage of net sales decreased to 12.9% from 13.7% for the three months ended
September 30, 2001 due to a larger percentage of web sales during the quarter
ended September 30, 2002 as compared to the prior year; web sales typically
carry a lower gross profit margin.

On a forward-looking basis, management believes future gross profit margins may
fluctuate due to competition in the personal computer market from Dell, Hewlett
Packard and Gateway, among others, as well as product supply and demand in the
market. The statement concerning future gross profit margins is a forward
looking statement that involves certain risks and uncertainties which could
result in a fluctuation of gross margins below those achieved for the three
months ended September 30, 2002. Although the Company believes it provides a
high quality product and after sale services, pricing and gross profit could be
negatively impacted by the activities of larger computer manufacturers and
product supply and demand.

Operating expenses increased by $0.2 million or 9.5%, to $2.3 million for the
three months ended September 30, 2002, from $2.1 million for the same period in
2001. The increase in operating expenses was attributable to an increase in
payroll and related costs and an increase in depreciation expense in 2002.
Payroll and related costs increased by approximately $220,000, or 8.9% for the
three months ended September 30, 2002 compared to the same period in 2001 due to
increased sales staff to launch the Company's authorized reseller program and
distribution sales as well as increased payroll costs related to the Company's
facility move in September 2002. Insurance costs increased by approximately
$120,000 as the Company incurred insurance for directors and officers and
increased premiums for workers compensation, general liability and health
insurance due to overall increases in the insurance market. Depreciation charges
increased by approximately $50,000 due to infrastructure investments in
Northgate's telephone system and enterprise software. These increases were
offset by a $100,000 decrease in professional fees, travel and commissions for
the three months ended September 30, 2002.

Other expense (income) increased by $97,000 to ($36,000) for the three months
ended September 30, 2002, from $61,000 for same period in the prior year. The
increase was the result of a $50,000 increase in gains on marketable securities
and a $50,000 gain on a debt settlement during the three months ended September
30, 2002.

The income tax provision for the three months ended September 30, 2002 was
$45,000 versus a provision of $128,000 for the same period in the prior year.
The decrease in the provision was due to lower income before taxes during the
three months ended September 30, 2002.

                                       10

<PAGE>

Nine Months Ended September 30, 2002 Compared to the Nine Months Ended September
30, 2001

Net sales increased by $12.6 million, or 30.7%, to $53.6 million for the nine
months ended September 30, 2002, compared to $41.0 million for the nine months
ended September 30, 2001. The increase in net sales was a result of an increase
in the number of desk top and laptop computer systems shipped during the period
as well as an increase in the average selling price per system due to a higher
selling price for the notebook systems as compared to desktop systems. The
results for the nine months ended September 30, 2002 also include revenues for
Mcglen for the period March 21, 2002 through September 30, 2002.

Gross profit increased by $2.1 million or 40.4% to $7.3 million for the nine
months ended September 30, 2002, compared to $5.2 million for the nine months
ended September 30, 2001. The increase in gross profit was due to the increase
in sales as well as more favorable pricing on certain components. Gross profit,
as a percentage of net sales increased to 13.7%, from 12.7% for the nine months
ended September 30, 2002 as compared to the nine months ended September 30,
2001. The increase in gross profit as a percentage of sales was due to higher
margins on the sale of notebooks as well as the Company taking advantage of
quarter end promotions from various manufacturers during the second quarter of
2002 which provided lower cost of goods sold.

Operating expenses increased by $2.1 million or 42.9%, to $7.0 million for the
nine months ended September 30, 2002, from $4.9 million for the same period in
2001. The increase in operating expenses was attributable to an increase in
payroll and related costs, credit card fees, insurance costs, and an increase in
bad debt expense in 2002. Payroll and related costs increased by approximately
$1.9 million, or 63.3% for the nine months ended September 30, 2002 compared to
2001 as Northgate increased production and call center staffing due to increased
sales, hired mid-level managers to help support the Company's growth and added
temporary staff for peak periods and increased staffing with the implementation
of the Company's new enterprise computer software. Credit card fees increased by
approximately $200,000, due to additional credit card sales through Mcglen.com
and AccessMicro.com where the Company's historical business had been through
open account sales. Insurance costs increased by approximately $100,000 as the
Company incurred insurance for its Directors and Officers, as well as increased
premiums for general liability and health insurance due to overall increases in
the insurance market . Bad debt expense increased by approximately $90,000 to
$24,000 for the nine months ended September 30, 2002 compared to bad debt
recoveries of $66,000 in the prior year. These increases were offset by an
increase of approximately $200,000 in advertising revenue for the nine months
ended September 30, 2002.

Other expense (income) decreased by $1.1 million to $0.3 million for the nine
months ended September 30, 2002, from ($0.8 million) for same period in the
prior year. The decrease was a result of losses on marketable securities of
$150,000 during the nine months ended September 30 2002 as compared to gains of
$1,100,000 for the nine months ended September 30, 2001.

The income tax provision for the nine months ended September 30, 2002 was
$12,000 versus a provision of $345,000 for the same period in the prior year.
The decrease in the provision was due to lower income before taxes during the
nine months ended September 30, 2002.

INCOME TAXES

For the periods ended September 30, 2002 and 2001, the difference between the
amount of income tax recorded and the amount of income tax expense calculated
using the federal statutory rate of 34% is due to state income taxes and other
permanent differences.

As a result of the Company's reverse merger in March 2002, the Company has
federal and state net operating loss carryforwards of approximately $23 million
and $12 million, respectively. The net operating loss carryforwards will expire
at various dates beginning in 2020 through 2022 for federal purposes and 2010
through 2012 for state purposes, if not utilized. Utilization of the net
operating loss carryforwards is subject to a substantial annual limitation due
to the ownership change limitations provided by the Internal Revenue Code of
1986, as amended, and similar state provisions. The annual limitation will
result in the Company being able to only utilize $3.9 million and $0.5 million,
to offset federal and state income, respectively. The remaining net operating
loss carryforwards will go unused.

LIQUIDITY AND CAPITAL RESOURCES

Northgate's primary capital need has been the funding of working capital
requirements created by its growth. Historically, Northgate's primary sources of
financing have been cash provided by operations and borrowings from private
investors, and financial institutions. Cash used in operations was approximately
($5.8 million) and ($1.7 million) for the nine months ended September 30, 2002


                                       11

<PAGE>

and 2001, respectively. Cash was used to pay down Northgate's working capital
obligations during the nine months ended September 30, 2002.

During the nine months ended September 30, 2002, Northgate's capital
expenditures were approximately $269,000 compared to $310,000 for the same
period in 2001, primarily for computer software and hardware, and leasehold
improvements related to Northgate's new facility that it occupied in September
2002.

The Company has a $2,500,000 line of credit with a bank. The line of credit
provides for borrowings secured by substantially all of the Company's assets and
is guaranteed by the Company's majority shareholder. Borrowings under the line
are advanced based upon 70% of eligible accounts receivable, as defined, less
any letters of credit issued on the Company's behalf. The line of credit was
renewed in October 2002 and expires in January 2003. Advances under the line
bear interest at the bank's prime rate plus 0.5% (5.25% at September 30, 2002).
The line contains certain covenants that require Northgate to maintain on a
quarterly basis: a minimum level of tangible net worth (as defined),
profitability for at least one quarter in three, a Current Ratio of at least
1.2:1, Effective Tangible Net Worth (as defined)of not less than ($4,500,000),
Working Capital of at least $2.5 million, and limits the capital expenditures
the Company can make in any one year to $750,000.

At September 30, 2002, approximately $1.0 million of the Company's short term
investments were held as collateral for letters of credit taken out to secure
open account terms with one of the Company's primary vendors. The Company
believes that current working capital, together with cash flows from operations
and available lines of credit, will be adequate to support the Company's current
operating plans through 2002.

In August 2002, the Company renegotiated its $1.3 million note payable,
extending the due date to January 1, 2005. As such, this note is shown as a long
term liability as of September 30, 2002. In September 2002, the Company reached
a settlement with the Mcglen line of credit holder whereby Northgate repaid
$40,000 of the $90,000 due under the line. The resulting gain of $50,000 is
included in other income for the three and nine months ended September 30, 2002.

At September 30, 2002 and 2001, the Company had cash and short-term investments
of $1.1 million and $2.4 million, respectively, and working capital of
approximately $2.4 million and $3.7 million, respectively. However, if the
Company needs extra funds, such as for acquisitions or expansion or to fund a
significant downturn in sales that causes losses, there are no assurances that
adequate financing will be available at acceptable terms, if at all. The Company
operates in a very competitive market against many companies that are
substantially larger than Northgate. Pricing and gross profit could be
negatively impacted by the activities of larger computer manufacturers and
product supply and demand in the market.

Since computer retailers typically have low product gross margins, Northgate's
ability to remain profitable is dependent upon its ability to continue to drive
down the cost of its computer systems through its product sourcing, inventory
management and labor management systems. To the extent that Northgate does not
continue to effectively manage its business, Northgate may be materially
adversely affected.

Northgate may experience significant fluctuations in its future operating
results due to a variety of factors, many of which are outside its control.
Factors that may affect its operating results include: the frequency and success
of new product introductions, mix of product sales and seasonality of sales
typically experienced by retailers, labor strikes such as the recent labor
activities on the shipping ports on the Western U.S., and the pricing of
component parts in the world-wide marketplace. Many of Northgate's competitors
offer broader product lines, have substantially greater financial, technical,
marketing and other resources than Northgate and may benefit from component
volume purchasing arrangements that are more favorable in terms of pricing and
component availability than the arrangements enjoyed by the Company. Sales in
the computer retail industry are significantly affected by the release of new
products. Infrequent or delayed new product releases can negatively impact the
overall growth in retail sales.

As part of its growth strategy, Northgate may, in the future, acquire other
companies, in the same or complementary lines of business, in addition to the
acquisition of Mcglen described elsewhere herein. Any such acquisition and the
ensuing integration of the operations of the acquired company with those of
Northgate would place additional demands on Northgate's management, and
operating and financial resources.

                                       12


<PAGE>

BUSINESS FACTORS

Except for historical information, all of the statements, expectations and
assumptions contained in the foregoing are forward-looking statements. The
realization of any or all of these expectations is subject to a number of risks
and uncertainties and it is possible that the assumptions made by management may
not materialize. In addition, there can be no assurances that current sales
levels will be sustained, and that the nine-month trends for sales will continue
in future periods. In addition to the factors set forth above, other important
factors that could cause actual results to differ materially from expectations
include lack of working capital to carry out our business plan; competition from
companies either currently in the market or entering the market; competition
from other Internet, catalog and retail store resellers and price pressures
related thereto; uncertainties surrounding the supply of and demand for computer
and computer related products; reliance on our vendors; and risks due to shifts
in market demand and/or price erosion of owned inventory. This list of risk
factors is not intended to be exhaustive. Reference should also be made to the
risk factors set forth elsewhere in this document and from time to time in our
other SEC reports and filings.

Item 4.- Controls and Procedures

Within the 90 days prior to the filing date of this report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures. Disclosure controls and procedures are
designed to ensure that information required to be disclosed in our periodic
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective. There have been no significant changes in
our internal controls or in other factors that could significantly affect
internal controls subsequent to the date we carried out this evaluation.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

         a. Reports on Form 8-K -

None.

                                    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.

                                     Northgate Innovations, Inc.

Date: November 13, 2002                 By   /s/ Grant Trexler
                                        ---------------------------------------
                                          Grant Trexler
                                          Chief Financial Officer

                                     (Duly Authorized Officer of the Registrant
                                      and Principal Financial Officer)

                                       13


<PAGE>


CERTIFICATIONS

I, Andy Teng, Chief Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Northgate Innovations,
Inc.;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

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

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

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

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

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

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: November 13, 2002 By:        /s/ Andy Teng
                           ---------------------------------------
                                    Andy Teng
                                    Chief Executive Officer


                                       14

<PAGE>


I, Grant Trexler, Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Northgate Innovations,
Inc.;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

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

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

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

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

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

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: November 13, 2002   By:       /s/ Grant Trexler
                            ---------------------------------------
                                    Grant Trexler
                                    Chief Financial Officer


                                       15