<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              ---------------------

                                   FORM 10-KSB

     [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 For the Fiscal Year Ended: November 30, 2002

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

          For the transition period from ___________ to __________

                         Commission File Number: 0-21367

                             DATA TRANSLATION, INC.
             (Exact name of registrant as specified in its charter)

          Delaware                                    04-3332230
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

                                 100 Locke Drive
                       Marlboro, Massachusetts 01752-1192
          (Address of principal executive offices, including zip code)

                                 (508) 481-3700
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                                     (none)

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $0.01 par value

                                (Title of class)

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

        Yes         X                           No
             ---------------                         --------------

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [ ].

The issuer's revenues for its most recent fiscal year were: $11,550,000.

The aggregate market value of the Company's voting and non-voting common equity
stock held by non-affiliates of the registrant was approximately $1,439,638 as
of January 31, 2003. The number of shares of Common Stock, $0.01 par value,
outstanding as of January 31, 2003 was 3,511,312.

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                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 16, 2003 are incorporated by reference into
Part III.

<PAGE>

                                     PART 1

Item 1. Business

Introduction

     Data Translation, Inc., f/k/a Data Translation II, Inc., (the "Company")
was incorporated in September 1996 as a wholly-owned subsidiary of Media 100
Inc., f/k/a Data Translation, Inc., ("Parent"). On November 29, 1996, Parent
contributed to the Company substantially all of the assets and liabilities of
Parent's data acquisition and imaging, commercial products and networking
distribution groups (the "Contributed Businesses"). In November 1996, Parent
sold a substantial portion of the assets of the networking distribution business
and during 1998 the Company discontinued the remainder of such business. The
Company continues to operate the data acquisition and imaging and commercial
products groups. On December 2, 1996 (the "Distribution Date"), Parent
distributed to its stockholders in the form of a dividend all of the outstanding
shares of capital stock of the Company (the "Distribution"). References to the
"Company" below refer to the Contributed Businesses as operated by the Company
after the Distribution, or as operated by Parent prior to the Distribution, as
the context requires.

     The Company is a leader in the design, development and manufacture of high
performance data acquisition, imaging and machine vision products. For more than
two decades, the Company's products have provided engineers and scientists with
accurate and timely data for measurement, analysis and process control in a wide
range of industrial, scientific and medical applications. The Company's
principal products in this area are data acquisition and imaging hardware, which
are used in personal computers ("PCs") to receive analog signals, convert them
to digital form and process the digital data. In addition, the Company supports
its existing hardware product lines with a blend of software offerings that
enables the customer to further analyze the data produced by the hardware. The
Company's strategy is to identify and capitalize on growth opportunities in the
data acquisition, imaging and machine vision markets.

     An outgrowth of the Company's core technology of analog to digital
conversion is its commercial products line which includes a low-cost,
high-performance video capture and encoding system for Microsoft(R) Windows(R)
95/98-based PCs called Broadway(TM). Broadway captures analog video, digitizes
it, compresses it into an editable MPEG-1 format, and writes it to disk in real
time. The Company's Broadway product has many applications, including
incorporation of video into web pages on the World Wide Web (the "Web"),
multimedia presentations, Webstreaming, CD-ROM titles and computer-based
training.

Data Acquisition, Imaging and Machine Vision

   Market

     The market for the Company's data acquisition, imaging products and machine
vision products, which are the Company's core products, is composed primarily of
technical users, such as engineers and scientists, interested in incorporating
the Company's products in their final products. These products are designed for
the scientific research and analysis, test and measurement and industrial
machine vision inspection markets. End users include original equipment
manufacturers, industrial manufacturers, research laboratories, universities,
hospitals and government agencies. Users require highly accurate, real-time
measurement and control of analog signals, such as temperature, pressure, sound
and video.

     The data acquisition and imaging markets are highly fragmented and have
been adversely affected in recent years by reduced prices for PCs and
peripherals.


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   Business Strategy

     In the data acquisition, imaging and machine vision area, the Company is
focused on providing system solutions built around development of its Peripheral
Component Interconnect ("PCI") and Universal Serial Bus ("USB") based products
in combination with its software offerings. These developments are being driven
by rapid adoption of PCI and USB slots by personal computer manufacturers.

   Products and Services

     The Company's data acquisition, imaging and machine vision products are
designed to facilitate (i) the high-speed capture of analog signals representing
physical events, such as temperature, pressure, sound and video, (ii) the
conversion of such signals into digital form and (iii) the use of such digital
signals in PCs for processing. These capabilities permit customers to use PCs
for data acquisition, to identify, measure, analyze and control physical
phenomena, and for imaging and machine vision, to analyze or enhance video
images.

     The Company's data acquisition, imaging and machine vision systems consist
of plug-in cards and Microsoft(R) Windows(R)-based software which provide an
integrated, high performance systems solution to the general scientific and
measurement marketplace.

     The Company sells over 100 data acquisition, imaging and machine vision
products, which range in retail price from $200 to $4,000. Domestically, the
Company sells such products to end users, value-added resellers ("VARs"), system
integrators and original equipment manufacturers ("OEMs"). Internationally, the
Company sells through its wholly-owned subsidiaries, as well as through
resellers and independent distributors. Such prices do not reflect distributor
discounts for international sales, which range from approximately 20% to 35% on
hardware products and up to approximately 50% on software applications.

     Data acquisition products provide capabilities ranging from simple
measurement to advanced digital signal processing functions. While researchers,
system integrators and OEMs have been the predominant data acquisition users in
the past, new data acquisition markets have emerged in the industrial and
medical areas, such as industrial inspection, medical diagnostic/therapeutic
applications, high-performance control, vibration analysis, acoustics and test
and measurement applications. Customers incorporate the Company's data
acquisition boards and software into PCs to measure real-world parameters,
including temperature, pressure, acceleration and sound; to analyze this data;
and to use the results to control real-world events and processes.

     The Company's imaging and machine vision products may be used in a number
of applications. In machine vision applications, images can be captured and
processed immediately, in real time, for fast, accurate inspection of
manufactured parts. In scientific imaging applications, images can be captured
from video cameras for analysis, or images can be captured from cameras mounted
on microscopes to identify and count cells. In medical applications, images can
be captured from different diagnostic devices, such as CAT scanners or
ultrasound imaging devices, for enhancement, analysis and display.

   Customers and Sales

     The Company sells its data acquisition, imaging and machine vision products
to end users, VARs, system integrators and OEMs for use primarily in the
scientific, medical and industrial markets. End users include manufacturers,
research laboratories, universities, hospitals and government agencies.

     The Company sells its data acquisition, imaging and machine vision products
through a comprehensive, widely distributed annual catalog, an in-house
telesales force, OEM-focused direct sales, indirect channels (VARs, distributors
and system integrators), and extensive advertising and promotional campaigns.
The Company has a full-time sales and administrative staff of 10 employees in
the United States to support sales. Two subsidiaries and various distributors
throughout Europe, Asia and the Pacific Rim support international sales.


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   Competition

     The Company competes in the data acquisition market principally with
National Instruments Corporation, Measurement Computing Corporation and IOtech
Incorporated. In the imaging and machine vision markets the Company competes
with Matrox Electronic Systems, Coreco, Inc., and Cognex Corporation. The
aforementioned competitors may have substantially greater financial, technical
and marketing resources than the Company. The Company also competes with a
number of smaller companies in each of these markets. The Company's data
acquisition, imaging and machine vision products compete based upon their
ability to supply extensive hardware and software components with competitive
performance and price.

Commercial Products

   Market

     The convergence of voice, video and data, the advances in personal
computing, and the growth of the Internet have changed the way in which the
world communicates. As computing processor power and telecom/digital/cable modem
technologies evolve, so too does the PC user's ability to harness these venues
for creating and delivering video content. As PC costs continue to reach new
lows with substantial increases in computing power, the majority of PC users
will have access to an affordable tool for video creation. The Company believes
the most lucrative market segments for PC video are Web page creators/hosts,
business users for use in presentations, training, sales and marketing and
CD-ROM/Digital Video Disk ("DVD") title producers developing entertainment,
gaming and education content.

   Product and Technology

     Broadway is a high-performance video capture and encoding system for
Windows(R) based PCs. Broadway is a complete streaming and video editing
solution, and its videos may also be integrated with third party video editing
software packages to edit and produce Web streaming video based on Real Networks
technology, as well as VHS quality digital video clips with CD-quality stereo
sound. Using Broadway, a computer user can capture video from most analog
sources, edit the digitized version created by Broadway, fully compress it to
MPEG-1 and then distribute it on the Web or in hard media form. Users can also
incorporate the finished video into multimedia applications, such as Web home
pages, multimedia presentations and CD-ROMs. Broadway is composed of a PCI
integrated circuit board and a graphical user interface compatible with
Microsoft(R) Windows(R) based operating systems. The Company's standard Broadway
package is shipped complete with Ulead Systems, Inc.'s MediaStudio Pro(TM) video
editing software. Broadway is also designed to be integrated with a variety of
other video editing packages, including Adobe Premiere(R).

     Broadway uses a robust implementation of the MPEG-1 and MPEG-2 standard
that uses a combination of hardware and software to fully compress video clips
into the MPEG-1 and MPEG-2 format. Users of the latest Pentium III+ processors
can compress into MPEG-1 format in real-time. PCs with slower processors utilize
hardware compression to achieve real-time compression. Advances in processor
speed may make use of various software techniques to achieve faster compression
and enhanced editing capability.

     Using the MPEG-1 and MPEG-2 standard allows Broadway to produce compressed
videos, which may be played back at 30 frames per second: the standard,
full-motion video speed. Additionally, many users choose to share video content
via the Internet. These clips may be streamed, utilizing RealNetworks technology
and played back at their destination via a RealNetworks player. Since many users
have installed this player on their PC, this ability to communicate with video
is rapidly gaining adherents.

   Customers and Sales

     The Company's sales and marketing strategy is to move down the technical
sophistication curve and up the volume curve by targeting as primary customers
audio/video professionals, business presentation and education developers, home
hobbyists and family/home users.


                                       3

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     Worldwide, the Company's commercial products are sold directly on-line, as
well as through a two-tier distribution network. Users can order directly from
the Company's Web site for rapid delivery. The Company maintains direct
relationships with international mass-market distributors as well as OEMs,
resellers and VARs. The distributors sell the commercial products to retail
outlets as well as smaller computer resellers and VARs. This allows the
Company's products to be available through virtually any method used by its
customers to purchase their products. The Company currently offers a 30-day
money back guarantee on its commercial products.

     The Company currently provides end users with 90 days of free technical
support with the purchase of any product. Broadway includes extensive on-line
technical support via the Company's Web site, as well as documentation which
provides a video tutorial to the non-video user and an intuitive installation
guide.

   Competition

     The Company has a number of competitors. Some competitors sell products,
which like Broadway, employ MPEG encoding, while others sell products based on
different platforms and video standards. The Company's Broadway product competes
principally on the basis of ease of installation and use, brand name awareness,
and price.

     The Company's principal competition for the Broadway product includes other
products with MPEG encoding such as Pinnacle System's DV500 DVD, Matrox's
RT2500, Videonics' Python and Dazzle Multimedia's Snazzy and Dazzle products.
These companies may have substantially greater financial, technical and
marketing resources than the Company. In addition, there are a number of other
competitors whose products are based on platforms and video standards other than
those used by the Company.

Research and Development

     The Company intends to continue to invest in research and development for
new products and for enhancements to existing products. The Company is currently
targeting spending on research and development at an annual rate of
approximately 28.0% of net sales. For the fiscal year ended November 30, 2002,
the Company invested approximately $2,844,000, or 24.8% of net sales, in product
development compared to $3,050,000, or 20.5% of net sales in the prior fiscal
year.

     The Company employed, as of November 30, 2002, approximately 19 full-time
engineers whose primary duties relate to product development. Outside firms and
consultants are selectively engaged to develop or assist with development of
products when favorable opportunities exist.

     In the data acquisition and imaging area, the Company's focus on hardware
development includes the integration of application specific integrated circuits
("ASICs") into circuit boards, which may reduce cost and advance the development
of new computer bus technologies (e.g., PCI). The Company's software development
in data acquisition, imaging and machine vision centers on supporting
Microsoft(R) Windows(R)-based operating systems.

Manufacturing

     The Company manufactures all of its products at a leased facility in
Marlboro, Massachusetts. The Company believes its control of manufacturing
significantly contributes to hardware design improvements, and allows for more
rapid turn-around of product development to the marketplace. The Company
periodically assesses its production efficiencies against the benefits of
outsourcing certain hardware production. The Company has been ISO 9001 certified
since 1994.

     The Company's fully integrated assembly and test operations have sufficient
capacity to meet the Company's current needs for assembled printed circuit
boards. In addition, the Company designs circuit boards and modules using
advanced computer-aided-design technology. The Company's manufacturing
capabilities include the assembly of fine pitch, surface mounted electronic
devices utilizing state of the art pick and place robotics for high density,


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multi-layered, single or double sided boards. A majority of the Company's
shipments incorporate surface-mount components. Initial testing is performed to
assure that products are free from process-related defects after assembly.
Following initial testing, a complete functional test is performed twice on each
board, with an environmental stress screen between tests to eliminate defects
and assure long-term reliability of products. The Company uses automated test
equipment to assure product quality, improve throughput and increase production
yields.

     Components used in circuit board assembly are generally available from
several distributors and manufacturers. Suppliers are selected based on their
ability to provide defect-free products quickly at low cost. The Company
continuously measures the performance of key suppliers. Special programs are
used to speed availability of material and protect the Company from unplanned
shifts in product demand. These programs include ship-to-stock, and point-of-use
bonding, a program in which suppliers hold material on-site at the Company and
as the material is used, title transfers to the Company and payment is made.
Certain components used by the Company do not have ready substitutes or have
been subject to industry-wide shortages. There can be no assurance that the
Company's inventories would be adequate to meet the Company's production needs
during any interruption of supply. The Company's inability to develop
alternative supply sources, if required, or a reduction or stoppage in supply,
could adversely affect its operations until new sources of supply became
available.

Proprietary Rights

     The Company holds twelve United States patents, expiring from July 2003
through May 2019, and has two pending patent applications in the United States,
none of which the Company believes is material to its business or operations.
Pursuant to an agreement with Parent, the Company also has cross-licenses to
technology under Parent's current patents and patent applications, together with
technology resulting from patent applications, which Parent applied for through
December 2, 1998.

     The Company believes that its success depends primarily upon the
proprietary know-how, innovative skills, technical competence and marketing
abilities of its employees.

Backlog

     Most of the Company's customers order products on an as-needed basis,
relying, in the case of most products, on the Company's five-day delivery
capability. As a result, the Company believes that its backlog at any point in
time is not indicative of its future sales and is not material to operations.

Employees

     As of November 30, 2002, the Company employed approximately 83 persons
worldwide. None of the employees is represented by a labor union. The Company
believes it has good relations with its employees.

     Competition for employees with the product knowledge and skill set required
by the Company is intense in the geographic areas in which the Company's
operations are located. The Company believes that its future success will depend
on its continued ability to attract and retain qualified employees, especially
in research and development.


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Executive Officers of the Company

Name                       Age      Position with the Company
----                       ---      --------------------------
Alfred A. Molinari, Jr.     61      Chairman and Chief Executive Officer
Jeffrey M. Cronin           38      Vice President, Operations
Michael A. DiPoto           35      Vice President, Finance, CFO and Treasurer
Ellen W. Harpin             47      Vice President Engineering
Andreas C. Randow           32      Vice President Technology

     Mr. Molinari has been the Chief Executive Officer and Chairman of the
Company since December 1996. Mr. Molinari is the founder of Parent and served as
the Chief Executive Officer and a director of Parent from its inception in 1973
until November 1996.

     Mr. Cronin was appointed Vice President, Operations in February 1999. Prior
to that Mr. Cronin served as Director of Operations and Manufacturing of the
Company from December 1996 to February 1999 and as Director of Manufacturing of
Parent from March 1992 to December 1996.

     Mr. DiPoto was appointed Vice President of Finance, Chief Financial and
Treasurer in July 1999. Prior to that Mr. DiPoto served as the Chief Accounting
Officer of the Company from March 1999 to June 1999. Prior to joining the
Company Mr. DiPoto served as Corporate Controller of NuMega Technologies, Inc.
from January 1996 to March 1999. Prior to that Mr. DiPoto served as Accounting
Manager and Corporate Controller of Acuity Imaging, Inc. from January 1994 to
December 1995.

     Ms. Harpin was appointed Vice President of Engineering in July 2001. Ms.
Harpin has been the Secretary and a director of the Company since 1997. Ms.
Harpin previously served as Vice President, Administration from October 1998 to
May 1999 and as Vice President, Sales from October 1997 to October 1998. Ms.
Harpin served as Vice President of Administration of Parent from July 1995 to
September 1996. Ms. Harpin was employed by the Parent from March 1983 until
November 1996 serving as Chief Financial Officer, Treasurer, Vice President,
Manufacturing and Director of Sales.

     Mr. Randow was appointed Vice President of Technology in August 2002. Prior
to joining the Company Mr. Randow served as Director of GTM Measure Precise,
GmbH from May 1998 to July 2002. Prior to that Mr. Randow served as Director of
Randow Softwaretechnik from January 1996 to April 1998.

Item 2. Properties

     The Company maintains its principal executive, engineering, manufacturing
and sales operations in a 100,000 square foot facility located in Marlboro,
Massachusetts. The building is leased from a related party trust under an
agreement expiring in 2009. The Company sublets a portion of the building to
certain tenants. The minimum annual net basic rent for the building is
approximately $1,300,000, which is allocated between the Company and its tenants
pursuant to certain sub-lease agreements.

     The Company's United Kingdom sales operations are conducted in a 1,000
square foot office facility in Basingstoke, Hants, England that is leased under
a five-year renewable lease, expiring in 2004, by Data Translation Ltd. The
minimum annual basic rent is approximately $43,000 per year.

     The Company's German sales operations are conducted in a 2,420 square foot
office facility in Bietigheim-Bissingen, Germany that is leased under a
five-year renewable lease, expiring in 2005, by Data Translation GmbH. The
minimum annual basic rent is approximately $43,000 per year.


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Item 3. Legal Proceedings

     From time to time, the Company is involved in disputes and/or litigation
with respect to its products and operations in its normal course of business.
The Company does not believe that the ultimate impact of the resolution of such
matters will have a material adverse effect on the Company's financial condition
or results of operations.

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

     There were no matters submitted to a vote of stockholders during the fourth
quarter of fiscal 2002.


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PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters

     Until January 10, 2003, the common stock of the Company was traded in the
over-the-counter market and was reported on the Nasdaq SmallCap Market System
under the symbol "DATX." On that date the Company's listing of its common stock
was terminated and the common stock is now traded on the over-the-counter
bulletin board under the symbol "DATX.OB." The Company's stock began trading on
December 16, 1996 subsequent to the stock dividend issued in connection with the
Distribution. The high and low sale prices of the Company's Common Stock since
the Distribution Date through January 31, 2003 as reported on the Nasdaq
SmallCap Market System and the over-the-counter bulletin board were $9.91 and
$.37, respectively. The table below sets forth the high and low quarterly sales
prices of the Common Stock during the two most recent fiscal years:

                                 2002        2002        2001       2001
                                 High         Low        High        Low
                          ----------------------------------------------
First quarter                   $1.53       $.610      $2.875     $1.500
Second quarter                  1.400        .750       2.400      1.250
Third quarter                   1.300       0.500       2.350      0.800
Fourth quarter                   .790       0.370       1.250      0.800

     The Company has never paid a cash dividend on its Common Stock, and the
Board of Directors does not anticipate paying cash dividends in the foreseeable
future. As of January 31, 2003, there were approximately 150 stockholders of
record of the Company's common stock.


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Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Forward Looking Statements

     Certain statements in Management's Discussion and Analysis of Financial
Condition and Results of Operations contain "forward-looking" information (as
defined in the Private Securities Litigation Reform Act of 1995). The words
"believe", "expect", "anticipate", "intend", "estimate", "assume" and other
similar expressions which are predictions of or indicate future events and
trends and which do not relate to historical matters identify forward-looking
statements. Reliance should not be placed on forward-looking statements because
they involve known and unknown risks, uncertainties and other factors, which are
in some cases beyond the control of the Company and may cause the actual
results, performance or achievements of the Company to differ materially from
anticipated future results, performance or achievements expressed or implied by
such forward-looking statements.

     For further discussion identifying important factors that could cause
actual results to differ materially from those anticipated in forward-looking
statements, see "Certain Factors that May Affect Future Results" herein.

Background

     Data Translation, Inc., f/k/a Data Translation II, Inc., (the "Company")
was incorporated in September 1996 as a wholly-owned subsidiary of Media 100
Inc., f/k/a Data Translation, Inc., ("Parent"). On November 29, 1996, Parent
contributed to the Company substantially all of the assets and liabilities of
Parent's data acquisition and imaging, commercial products and networking
distribution groups (the "Contributed Businesses"). On November 11, 1996, Parent
sold a substantial portion of the assets of the networking distribution
business, and during 1998 the Company discontinued the remainder of such
business. The Company will continue to operate the data acquisition and imaging
and commercial products groups. On December 2, 1996 (the "Distribution Date"),
Parent distributed to its stockholders in the form of a dividend all of the
outstanding shares of capital stock of the Company (the "Distribution").

     Following the Distribution, the Company became a stand-alone entity with
objectives and strategies separate from those of Parent. The Company is focused
on providing products in the data acquisition, imaging, machine vision and PC
video editing industries.

Critical Accounting Policies

     (a) Revenue Recognition

     The Company recognizes revenue from sales to end users, resellers and
distributors upon shipment, provided persuasive evidence of an arrangement
exists, the sales price is fixed or determinable and collection of the related
receivable is probable. Warranty costs are estimated and recorded by the Company
at the time of revenue recognition.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements.
This bulletin established additional guidelines for revenue recognition. The
Company's revenue recognition policy complies with this pronouncement.

     (b) Inventories and Obsolete and Excess Inventory

     Inventories are valued at the lower of first-in, first-out ("FIFO") cost or
market value; as such, costs have been reduced to reflect decreases in market
value based on excess and obsolete inventories. The estimated allowance is based
on management's review of inventories on hand compared to estimated future usage
and sales.


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     (c) Allowance for Uncollectible Accounts Receivable

     We perform ongoing credit evaluations of our customers and adjust credit
limits based upon payment history and the customer's current credit worthiness,
as determined by our review of their current credit information. We continuously
monitor collections and payments from our customers and maintain a provision for
uncollectible receivables based upon our historical experience and any specific
customer collection issues that we have identified. While such credit losses
have historically been within our expectations and the provisions established,
we cannot guarantee that we will continue to experience the same credit loss
rates that we have in the past. A significant change in the liquidity or
financial position of a key customer could have a material adverse impact on the
collectability of our accounts receivables and our future operating results.

Comparison of Fiscal Year Ended November 30, 2002 to Fiscal Year Ended November
30, 2001

     Net sales for the fiscal year ended November 30, 2002 were $11,550,000
compared to $14,885,000 for the same period in the prior year, which represents
a decrease of approximately 22.4% or $3,335,000. Sales from the Company's data
acquisition, imaging and machine vision products decreased approximately
$2,172,000, or 18.3% from the prior fiscal year. The Company believes that the
decrease in sales is primarily attributable to the impact of the global economic
downturn. Discretionary spending by our customers has been reduced, causing
delays and postponement of orders. The decrease is also attributable to reduced
sales of the Company's legacy products as well as a shift in the data
acquisition and imaging markets toward new, lower priced hardware and software
products (particularly in PC prices) and competitive pricing pressures. Sales
from the Company's commercial product, Broadway, decreased approximately
$562,000, or 50.9%, from the comparable period in fiscal 2001, which the Company
believes is due primarily to increased competition and pricing pressures within
the video capture and encoding marketplace.

     Gross profit for the fiscal year ended November 30, 2002 was 53.6%,
compared to 53.7% in the comparable period of the prior year. The slight
decrease in gross profit from the comparable prior year period was the result of
a less favorable product mix.

     The Company's loss from operations for fiscal 2002 was $1,206,000, compared
to loss from operations of $1,405,000 in the comparable period of the prior
year. A decrease in operating expenses as well as a higher gross margin
percentage contributed to the decrease in loss from operations. Operating
expenses for fiscal 2002 were $7,391,000 representing 64.0% of sales, compared
to $9,400,000, representing 63.2% of sales, in the prior year. Fiscal year 2002
operating expenses include a significant investment in engineering development
for the Company's fiscal 2003 product releases. Research and development
expenses in fiscal year 2002 were $2,844,000, representing 24.6% of sales,
compared to $3,050,000, representing 20.5% of sales, in the prior year period.
The slight reduction in research and development expenses is primarily the
result of reduced salaries within the engineering department. The expenses in
research and development are comprised largely of expenses related to the
Company's core product lines. Research and development expenses related to core
engineering development in fiscal year 2002 were $2,824,000, representing 24.5%
of sales, compared to $3,041,000, representing 20.4% of sales, in the prior year
period. As a percentage of the Company's overall research and development
expense, core development activities represented approximately 99% of the total
research and development expenses in fiscal year 2002, compared to 99% in the
prior year period. Sales and marketing expenses in fiscal year 2002 were
$3,132,000, representing 27.1% of sales, compared to $4,627,000, representing
31.0% of sales, in the prior year period. The decrease in sales and marketing
expenses is primarily a result of decreased spending in advertising, promotion
and sales channel development as well as reduced headcount within the sales and
marketing departments. General and administrative expenses in fiscal year 2002
were $1,415,000, representing 12.3% of sales, compared to $1,723,000,
representing 11.6% of sales, for the comparable period in fiscal 2001. The
decrease in general and administrative expenses is primarily the result of
reduced headcount, salaries and professional fees within the general and
administrative departments.

     Interest income for the fiscal year ended November 30, 2002 was $47,000,
compared to interest income of $76,000, for the same period in fiscal 2001. The
decrease in interest income was a result of less favorable interest rates during
fiscal 2002 and lower cash balances.

     Net loss for the fiscal year ended November 30, 2002 was $1,159,000, or
$0.33 per diluted share, compared to a net loss of $1,329,000, or $0.52 per
diluted share, for the same period in fiscal 2001.


                                       10

<PAGE>

Comparison of Fiscal Year Ended November 30, 2001 to Fiscal Year Ended November
30, 2000

     Net sales for the fiscal year ended November 30, 2001 were $14,885,000
compared to $15,924,000 for the same period in the prior year, which represents
a decrease of approximately 6.5% or $1,040,000. Sales from the Company's data
acquisition, imaging and machine vision products decreased approximately
$744,000, or 5.9% from the prior fiscal year. The Company believes that the
decrease in sales is primarily attributable to the impact of the global economic
downturn. Discretionary spending by our customers has been reduced, causing
delays and postponement of orders. The decrease is also attributable to reduced
sales of the Company's legacy products as well as a shift in the data
acquisition and imaging markets toward new, lower priced hardware and software
products (particularly in PC prices) and competitive pricing pressures. Sales
from the Company's commercial product, Broadway, decreased approximately
$821,000, or 42.6%, from the comparable period in fiscal 2000, which the Company
believes is due primarily to increased competition and pricing pressures within
the video capture and encoding marketplace.

     Gross profit for the fiscal year ended November 30, 2001 was 53.7%,
compared to 52.3% in the comparable period of the prior year. The increase in
gross profit from the comparable prior year period was the result of lower
manufacturing overhead expenses as well as a more favorable product mix.

     The Company's loss from operations for fiscal 2001 was $1,405,000, compared
to loss from operations of $1,827,000 in the comparable period of the prior
year. A decrease in operating expenses as well as a higher gross margin
percentage contributed to the increase in income from operations. Operating
expenses for fiscal 2001 were $9,400,000 representing 63.2% of sales, compared
to $10,161,000, representing 63.8% of sales, in the prior year. Fiscal year 2001
operating expenses include a significant investment in engineering development
for the Company's fiscal 2002 product releases. Research and development
expenses in fiscal year 2001 were $3,050,000, representing 20.5% of sales,
compared to $3,031,000, representing 19.0% of sales, in the prior year period.
The expenses in research and development are comprised largely of expenses
related to the Company's core product lines. Research and development expenses
related to core engineering development in fiscal year 2001 were $3,041,000,
representing 20.4% of sales, compared to $2,830,000, representing 17.8% of sales
in the prior year period. As a percentage of the Company's overall research and
development expense, core development activities represented approximately 99%
of the total research and development expenses in fiscal 2001, compared to 93%
in the prior year period. Sales and marketing expenses in fiscal year 2001 were
$4,627,000, representing 31.0% of sales, compared to $5,113,000, representing
32.1% of sales, in the prior year period. The decrease in sales and marketing
expenses is primarily a result of decreased spending in advertising, promotion
and sales channel development as well as reduced headcount within the sales and
marketing departments. General and administrative expenses in fiscal year 2001
were $1,723,000, representing 11.6% of sales, compared to $2,017,000,
representing 12.7% of sales, for the comparable period in fiscal 2000. The
decrease in general and administrative expenses is primarily the result of
reduced headcount, salaries and professional fees within the general and
administrative departments.

     Interest income for the fiscal year ended November 30, 2001 was $76,000,
compared to interest income of $114,000, for the same period in fiscal 2000. The
decrease in interest income was a result of less favorable interest rates during
fiscal 2001. The primary source of interest income is from the investment of
proceeds received from a rights offering consummated in August 2001 and other
existing cash balances.

     Net loss for the fiscal year ended November 30, 2001 was $1,329,000, or
$0.52 per diluted share, compared to a net loss of $1,713,000, or $0.78 per
diluted share, for the same period in fiscal 2000.

Liquidity and Capital Resources

     As of November 30, 2002, the Company had cash, cash equivalents and short
term investments totaling $3,159,000, as compared to cash, cash equivalents and
short term investments of $3,733,000 as of November 30, 2001.

     During fiscal 2002, the Company used $496,000 in operating activities,
resulting from the net loss for the fiscal year, a decrease in accrued expenses,
partially offset by decreases in inventory, accounts receivable, prepaid
expenses and an increase in accounts payable.

     The Company used $114,000 in investing activities during fiscal 2002,
mainly as a result of acquisitions of property and equipment.


                                       11

<PAGE>

      The Company did not generate any funds from financing activities during
fiscal 2002.

     The Company believes that its existing cash, cash equivalents and
short-term investment balances and cash flows expected to be generated from
future operations will be sufficient to meet its capital requirements for at
least the next twelve months. The Company's future capital requirements will
depend on many factors, including the rate of revenue growth, the timing and
extent of spending to support product development efforts and expansion of sales
and marketing, the timing of introductions of new products and enhancements to
existing products, and market acceptance of the Company's products. There can be
no assurances that additional funding, if required, will be available on
acceptable terms or at all.

Results of Operations

     The following table shows certain statement of operations data as a
percentage of net sales.

                                                       Fiscal Year Ended
                                                          November 30,
                                                ------------------------------
                                                  2002       2001       2000
                                                --------   --------   --------
 Net sales                                         100.0%     100.0%     100.0%

 Gross margin                                       53.6       53.7       52.3
 Research and development expenses                  24.6       20.5       19.0
 Selling and marketing expenses                     27.1       31.0       32.1
 General and administrative expenses                12.3       11.6       12.7
                                                --------   --------   --------
 Income (loss) from operations                     (10.4)      (9.4)     (11.5)
 Interest income (expense) and other, net            0.4        0.5        0.7
                                                --------   --------   --------
 Income (loss) from operations before
    provision for income taxes                     (10.0)      (8.9)     (10.8)
 Provision for income taxes                          0.0        0.0        0.0
                                                --------   --------   --------
 Net income (loss)                                 (10.0)%     (8.9)%    (10.8)%
                                                ========   ========   ========


                                       12

<PAGE>

Certain Factors That May Affect Future Results

     Except for the historical information contained herein, the matters
discussed in this Annual Report on Form 10-KSB are forward-looking statements,
are based on current expectations, and involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from those expressed in such forward-looking statements. The risks and
uncertainties associated with such statements include the following:

Significant fluctuations and unpredictability of operating results

     Our quarterly operating results may vary significantly for a number of
reasons, including new product announcements and introductions by us or our
competitors, changes in pricing, and the volume and timing of orders received
during each quarter. Historically a significant percentage of our net sales have
resulted from orders received from universities, research laboratories and
government agencies. These sales are historically slower during our third fiscal
quarter as a result of seasonal vacation schedules and university shutdowns. We
have also in the past experienced delays in the development of new products and
enhancements, and such delays may occur in the future. These factors make the
forecasting of revenue inherently uncertain. Additionally, a significant portion
of our operating expenses are relatively fixed, and operating expense levels are
based primarily on internal expectations of future revenue. As a consequence,
quarterly operating expense levels cannot be reduced rapidly in the event that
quarterly revenue levels fail to meet internal expectations. Therefore, if
quarterly revenue levels fail to meet internal expectations, our operating
results would be adversely affected.

Development and introduction of new products

     Our future success depends upon our ability to address the rapidly changing
needs of our customers by developing and introducing high-quality,
cost-effective products, product enhancements and services on a timely basis and
by keeping pace with technological developments and emerging industry standards.
We have new product launches and upgrades to our existing products planned for
fiscal year 2003. Our future revenue growth will be dependent on the success of
these new product launches as legacy product sales continue to erode. We have in
the past experienced delays in product development and such delays may occur in
the future. In addition, as we introduce new or enhanced products, we will have
to manage successfully the transition from older products in order to minimize
disruption in our customers' ordering patterns, avoid excessive levels of older
product inventories and ensure that enough supplies of new products can be
delivered to meet our customers' demands. Our ability to develop and
successfully introduce new products and product enhancements, which are broadly
accepted, will affect our revenues.

Dependence on a few key original equipment manufacturers (OEMs)

     We depend on a few key original equipment manufacturer customers (OEMs).
For example, in the year ended November 30, 2002, sales to our OEM channel
represented 39% of our total revenue. We anticipate that our operating results
will continue to depend on sales to the OEM channel. Therefore, the loss of any
of our OEMs or a significant reduction in sales to these OEMs could
substantially reduce our revenues.

Ability to manage distribution channel

     We rely primarily on a worldwide network of independent value-added
resellers (VARs) to distribute and sell our products to end-users. Our resellers
generally offer products of several different companies, including, in some
cases, products which are competitive with our products. In addition, many of
these VARs are small organizations with limited capital resources. There can be
no assurance that the our resellers will continue to purchase our products or
provide them with adequate levels of support, or that our efforts to expand our
VAR network will be successful. Any significant failure of the preceding factors
could have a material adverse effect on our business and operating results.


                                       13

<PAGE>

Reliance on international sales

     Sales of our products outside of North America represented approximately
44% of our net sales for the fiscal year ended November 30, 2002. International
sales and operations may be subject to risks such as the imposition of
government controls, export license requirements, restrictions on the export of
critical technology, less effective enforcement or proprietary rights, currency
exchange fluctuations, generally longer collection periods, political
instability, trade restrictions, changes in tariffs, difficulties in staffing
and managing international operations, potential insolvency of international
resellers and difficulty in collecting accounts receivable. Our international
sales are also subject to more seasonal fluctuation than domestic sales. In this
regard, the traditional summer vacation period, which occurs during our third
fiscal quarter, may result in a decrease in sales, particularly in Europe. There
can be no assurance that these factors will not have an adverse effect on our
future international operations and consequently, on our business and operating
results.

Dependence on single or limited source suppliers

     We are dependent on single or limited source suppliers for several key
components used in our products. The availability of many of these components is
dependent on our ability to provide suppliers with accurate forecasts of our
future requirements, and certain components used by us have been subject to
industry-wide shortages. We do not carry significant inventories of these
components and have no guaranteed supply arrangements with such suppliers. There
can be no assurance that our inventories would be adequate to meet our
production needs during any interruption of supply. Our inability to develop
alternative supply sources, if required, or a reduction or stoppage in supply,
could delay product shipments until new sources of supply become available, and
any such delay could adversely affect our business and operating results in any
given period.

Dependence on key personnel

     Competition for employees with the skills required by us is intense in the
geographic areas in which our operations are located. We believe that our future
success will depend on our continued ability to attract and retain qualified
employees, especially in research and development. In addition, companies in our
industry whose employees accept positions with competitors frequently claim that
their competitors have engaged in unfair hiring practices. We cannot assure you
that we will not receive such claims in the future as we seek to hire qualified
personnel or that such claims will not result in material litigation. We could
incur substantial costs in defending ourselves against these claims, regardless
of their merits.

Intellectual property rights

     Our products may infringe the intellectual property rights of others, which
may cause us to incur unexpected costs or prevent us from selling our products.
We cannot be certain that our products do not infringe issued patents or other
intellectual property rights of others. Because patent applications in the
United States are not publicly disclosed until the patent is issued,
applications relating to our products may have been filed without our knowledge.
We may be subject to legal proceedings and claims from time to time, including
claims of alleged infringement of the patents, trademarks and other intellectual
property rights of third parties by us or our licensees in connection with their
use of our products. Intellectual property litigation is expensive and
time-consuming, and could divert our management's attention away from running
our business and could seriously harm our business. If we were to discover that
our products violated the intellectual property rights of others, we would have
to obtain licenses from these parties in order to continue marketing our
products without substantial reengineering. We might not be able to obtain the
necessary licenses on acceptable terms or at all, and if we could not obtain
such licenses, we might not be able to reengineer our products successfully or
in a timely fashion. If we fail to address any infringement issues successfully,
we will be forced to incur significant costs and could be prevented from selling
our products. Our intellectual property or proprietary rights could be
misappropriated, which could force us to become involved in expensive and
time-consuming litigation.


                                       14

<PAGE>

Recently enacted and proposed regulatory changes

     Recently enacted and proposed changes in the laws and regulations affecting
public companies, including the provisions of the Sarbanes-Oxley Act of 2002 and
rules proposed by the SEC and NASDAQ could cause us to incur increased costs as
we evaluate the implications of new rules and respond to new requirements. The
new rules could make it more difficult for us to obtain certain types of
insurance, including directors and officers liability insurance, and we may be
forced to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. The impact of these events
could also make it more difficult for us to attract and retain qualified persons
to serve on the Company's board of directors, or as executive officers. We are
presently evaluating and monitoring developments with respect to these new and
proposed rules, and we cannot predict or estimate the amount of the additional
costs we may incur or the timing of such costs.

                                       15

<PAGE>


                     DATA TRANSLATION, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----
Report of Independent Certified Public Accountants-BDO Seidman, LLP ......   F-2
Report of Independent Certified Public Accountants-Arthur Andersen LLP ...   F-3
Consolidated Balance Sheets as of November 30, 2002 and 2001 .............   F-4
Consolidated Statements of Operations for the Fiscal Years Ended
  November 30, 2002, 2001 and 2000 .......................................   F-5
Consolidated Statements of Stockholders' Investment and Comprehensive
  Loss for the Fiscal Years Ended November 30, 2002, 2001 and 2000 .......   F-6
Consolidated Statements of Cash Flows for the Fiscal Years
  Ended November 30, 2002, 2001 and 2000 .................................   F-7
Notes to Consolidated Financial Statements ...............................   F-8


                                      F-1



<PAGE>

Item 7.  Financial Statements and Supplementary Data

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders and Directors of Data Translation, Inc.:

     We have audited the accompanying consolidated balance sheet of Data
Translation, Inc. (a Delaware corporation) and subsidiaries as of November 30,
2002 and the related consolidated statements of operations, stockholders'
investment and comprehensive loss and cash flows for the year then ended. These
financial statements are the responsibility of Data Translation, Inc.'s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

     We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Data Translation, Inc. and
subsidiaries as of November 30, 2002 and the results of their operations and
their cash flows for the year then ended , in conformity with accounting
principles generally accepted in the United States of America.

                                        BDO SEIDMAN, LLP

Boston, Massachusetts
December 20, 2002

                                      F-2



<PAGE>

This is a copy of the audit report previously issued by Arthur Andersen LLP in
connection with Data Translation Inc.'s filing on Form 10-KSB for the year ended
November 30, 2001. This audit report has not been reissued by Arthur Andersen
LLP in connection with this filing on Form 10-KSB, as Arthur Andersen LLP ceased
providing audit services as of August 31, 2002. The consolidated balance sheet
as of November 30, 2000 and the consolidated statements of operations,
stockholders' investment and comprehensive loss and cash flows for the year
ended November 30, 1999 referred to in this report have not been included in the
accompanying financial statements.

To Data Translation, Inc.:

     We have audited the accompanying consolidated balance sheets of Data
Translation, Inc. (a Delaware corporation) and subsidiaries as of November 30,
2001 and 2000 and the related consolidated statements of operations,
stockholders' investment and comprehensive income (loss) and cash flows for each
of the three years in the period ended November 30, 2001. These financial
statements are the responsibility of Data Translation, Inc.'s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Data Translation, Inc. and
subsidiaries as of November 30, 2001 and 2000 and the results of their
operations and their cash flows for each of the three years in the period ended
November 30, 2001, in conformity with accounting principles generally accepted
in the United States.


                                        ARTHUR ANDERSEN LLP

Boston, Massachusetts
December 20, 2001 (except with respect
  to the matters discussed in Note 12, as to
  which the date is February 21, 2002)

                                      F-3



<PAGE>


                     DATA TRANSLATION, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                                             November 30,
                                                             ------------
                                                          2002          2001
                                                          ----          ----
Current Assets:
  Cash and cash equivalents ........................  $ 2,034,000   $ 3,618,000
  Short term investments ...........................    1,010,000            --
  Marketable securities ............................      115,000       115,000
  Accounts receivable, net .........................    1,121,000     1,480,000
  Inventories ......................................    1,269,000     1,324,000
  Prepaid expenses .................................      287,000       390,000
                                                      -----------   -----------
     Total current assets ..........................    5,836,000     6,927,000

Property and equipment, net ........................      304,000       469,000
Other assets .......................................       34,000        77,000
                                                      -----------   -----------
     Total assets ..................................  $ 6,174,000   $ 7,473,000
                                                      ===========   ===========

Current Liabilities:
  Accounts payable .................................  $   934,000   $   857,000
  Accrued expenses (Note 9) ........................    1,592,000     1,844,000
                                                      -----------   -----------
     Total current liabilities .....................    2,526,000     2,701,000


Commitments and Contingencies (Note 6)

Stockholders' Investment (Note 4):
  Preferred stock, $0.01 par value--
     Authorized: 5,000,000 shares; none issued
       or outstanding ..............................           --            --
  Common stock, $0.01 par value--
     Authorized: 30,000,000 shares; 3,568,412
       shares issued at November 30, 2002 and 2001,
       3,511,947 shares outstanding at November 30,
       2002 and 2001  ..............................       36,000        36,000

  Additional paid-in capital .......................   14,642,000    14,642,000
     Treasury stock, common, at cost,
       56,465 shares at November 2002 and 2001 .....     (227,000)     (227,000)
     Accumulated deficit ...........................  (10,770,000)   (9,611,000)
  Cumulative translation adjustment ................      (33,000)      (68,000)
                                                      -----------   -----------
     Total stockholders' investment ................    3,648,000     4,772,000
                                                      -----------   -----------
     Total liabilities and stockholders'
        investment .................................  $ 6,174,000   $ 7,473,000
                                                      ===========   ===========

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

                                      F-4



<PAGE>

                     DATA TRANSLATION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                       Fiscal Years Ended November 30,
                                                                       -------------------------------
                                                                  2002             2001              2000
                                                                  ----             ----              ----
<S>                                                           <C>               <C>               <C>
Net sales .................................................   $11,550,000       $14,885,000       $15,924,000
Cost of sales .............................................     5,365,000         6,890,000         7,590,000
                                                              -----------       -----------       -----------
      Gross profit ........................................     6,185,000         7,995,000         8,334,000
Research and development expenses .........................     2,844,000         3,050,000         3,031,000
Selling and marketing expenses ............................     3,132,000         4,627,000         5,113,000
General and administrative expenses .......................     1,415,000         1,723,000         2,017,000
                                                              -----------       -----------       -----------
      Loss from operations ................................    (1,206,000)       (1,405,000)       (1,827,000)
Interest income ...........................................        47,000            76,000           114,000
                                                              -----------       -----------       -----------
      Loss before provision for income taxes ..............    (1,159,000)       (1,329,000)       (1,713,000)
Provision for income taxes (Note 7) .......................            --                --               --
                                                              -----------       -----------       -----------
      Net loss ............................................   $(1,159,000)      $(1,329,000)      $(1,713,000)
                                                              ===========       ===========       ===========
Basic and diluted net loss per common share (Note 3) ......   $     (0.33)      $     (0.52)      $     (0.78)
                                                              ===========       ===========       ===========
Basic and diluted weighted average number of common
   shares outstanding .....................................     3,511,000         2,579,000         2,205,000
                                                              ===========       ===========       ===========
</TABLE>


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

                                       F-5



<PAGE>

                     DATA TRANSLATION, INC. AND SUBSIDIARIES

   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT AND COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
                                 Common Stock              Treasury Stock
                       --------------------------------  -------------------
                                   $0.01    Additional  Number                             Cumulative      Total
                        Number      Par      Paid-in      of                Accumulated   Translation  Stockholders'   Comprehensive
                       of Shares   Value     Capital    Shares    Amount      Deficit      Adjustment    Investment         Loss
                       ---------  -------  -----------  ------  ----------  ------------  -----------  -------------   -------------
<S>                    <C>        <C>      <C>          <C>     <C>         <C>           <C>          <C>             <C>
Balance, November
 30, 1999 ...........  2,175,780  $22,000  $12,891,000  15,000  $ (43,000)  $ (6,569,000)  $ (51,000)   $ 6,250,000              --
   Proceeds from
    stock plans .....    106,141    1,000      254,000      --         --             --         --         255,000              --
   Purchase of
    treasury stock ..         --       --           --  41,465   (184,000)            --         --        (184,000)             --
   Translation
    adjustment ......         --       --           --      --         --             --     (35,000)       (35,000)        (35,000)
   Net loss .........         --       --           --      --         --     (1,713,000)        --      (1,713,000)     (1,713,000)
                       ---------  -------  -----------  ------  ---------   ------------   ---------     ----------     -----------
Total Comprehensive
 Loss ...............                                                                                                   $(1,748,000)
                                                                                                                        ===========
Balance, November
 30, 2000 ...........  2,281,921   23,000   13,145,000  56,465   (227,000)    (8,282,000)    (86,000)     4,573,000
   Proceeds from
    stock plans .....     48,222    1,000       63,000      --         --             --          --         64,000             --
   Proceeds
    from rights
    offering, net
    of $102,000 in
    issuance costs ..  1,238,269   12,000    1,434,000      --         --             --          --      1,446,000             --
   Translation
    adjustment ......         --       --           --      --         --             --      18,000         18,000          18,000
   Net loss .........         --       --           --      --         --     (1,329,000)         --     (1,329,000)     (1,329,000)
                       ---------  -------  -----------  ------  ---------   ------------   ---------     ----------     -----------
Total Comprehensive
 Loss ...............                                                                                                   $(1,311,000)
                                                                                                                        ===========
Balance, November
 30, 2001 ...........  3,568,412   36,000   14,642,000  56,465   (227,000)    (9,611,000)    (68,000)     4,772,000
   Translation
    adjustment ......         --       --           --      --         --             --      35,000         35,000          35,000
   Net loss .........         --       --           --      --         --     (1,159,000)         --     (1,159,000)     (1,159,000)
                       ---------  -------  -----------  ------  ---------   ------------   ---------     ----------     -----------
Total Comprehensive
 Loss ...............                                                                                                   $(1,124,000)
                                                                                                                        ===========
Balance, November
 30, 2002 ...........  3,568,412  $36,000  $14,642,000  56,465  $(227,000)  $(10,770,000   $ (33,000)   $ 3,648,000
                       ---------  -------  -----------  ------  ---------   ------------   ---------     ----------
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-6




<PAGE>

                     DATA TRANSLATION, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                 Fiscal Years Ended November 30,
                                                                 -------------------------------
                                                             2002               2001              2000
                                                             -----              ----              ----
 <S>                                                      <C>                 <C>             <C>
 Cash Flows from Operating Activities:
    Net loss ........................................     $(1,159,000)      $(1,329,000)      $(1,713,000)
    Adjustments to reconcile net loss to net
     cash used in operating activities:
      Depreciation and amortization .................         321,000           484,000           677,000
      Reserve for doubtful accounts .................          12,000            23,000            12,000
      Changes in current assets and liabilities:
        Accounts receivable .........................         347,000           477,000            43,000
        Inventories .................................          55,000           253,000          (283,000)
        Prepaid expenses ............................         103,000           154,000          (187,000)
        Accounts payable ............................          77,000          (593,000)          804,000
        Accrued expenses ............................        (252,000)          (51,000)         (254,000)
        Deferred income taxes .......................              --                --            (3,000)
                                                          -----------       -----------       -----------
        Net cash used in operating activities .......        (496,000)         (582,000)         (904,000)
                                                          -----------       -----------       -----------
 Cash Flows from Investing Activities:
    Purchases of property and equipment .............        (156,000)          (64,000)         (324,000)
    Purchase of marketable securities ...............        (115,000)         (115,000)         (114,000)
    Maturity of marketable securities ...............         115,000           114,000           109,000
    Decrease (increase) in other assets .............          42,000            (5,000)          (50,000)
                                                          -----------       -----------       -----------
        Net cash used in investing activities .......        (114,000)          (70,000)         (379,000)
                                                          -----------       -----------       -----------
 Cash Flows from Financing Activities:
    Purchase of treasury stock ......................              --                --          (184,000)
    Proceeds from stock plans .......................              --            64,000           255,000
    Proceeds from rights offering ...................                         1,446,000                --
                                                          -----------       -----------       -----------
        Net cash provided by financing
          activities ................................              --         1,510,000            71,000
 Exchange Rate Effects ..............................          36,000            19,000           (36,000)
                                                          -----------       -----------       -----------
 Net (decrease) increase in cash and cash
   equivalents ......................................        (574,000)          877,000        (1,248,000)

 Cash and cash equivalents, beginning of year .......       3,618,000         2,741,000         3,989,000
                                                          -----------       -----------       -----------
 Cash and cash equivalents, end of year .............     $ 3,044,000       $ 3,618,000       $ 2,741,000
                                                          ===========       ===========       ===========
</TABLE>

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

                                      F-7




<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   Background and Basis of Presentation

     Data Translation, Inc., formerly known as Data Translation II, Inc. (the
"Company"), was incorporated in September 1996 as a wholly owned subsidiary of
Media 100 Inc., formerly known as Data Translation, Inc. ("Parent"). The Company
designs, develops and manufactures high performance data acquisition and imaging
products for use with personal computers. The Company's principal products are
digital signal processing boards and software, which receive analog signals,
convert them to digital form and process the digital data.

     On November 29, 1996, Parent contributed to the Company substantially all
of the assets and liabilities of Parent's data acquisition and imaging,
commercial products and networking distribution groups (the "Contributed
Businesses"). On November 11, 1996, Parent sold a substantial portion of the
assets of the networking distribution business, and the Company completed the
winding-up of the remainder of such business during 1998. On December 2, 1996
(the "Distribution Date"), Parent distributed to its stockholders in the form of
a dividend all of the outstanding shares of capital stock of the Company (the
"Distribution"). The Company continues to operate the data acquisition and
imaging and commercial products groups.

2.   Summary of Significant Accounting Policies

     (a) Principles of Consolidation

     The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries, Data Translation Ltd., and Data
Translation GmbH. All material intercompany accounts and transactions have been
eliminated in consolidation.

     (b) Use of Estimates

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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.

     (c) Cash and Cash Equivalents

     Cash equivalents are carried at cost, which approximates market value, and
have original maturities of less than three months. Cash equivalents include
money market accounts, U.S. Treasury bills and repurchase agreements with
overnight maturities.

     The Company accounts for marketable securities in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Under this standard, the Company is
required to classify all investments in debt and equity securities into one or
more of the following three categories: held-to-maturity, available-for-sale or
trading. The Company's marketable security as of November 30, 2002 matures in
August 2003 and is classified as held-to-maturity as the Company has the
positive intent and ability to hold to maturity. Marketable securities are
reported at amortized cost, which approximates fair market value. The Company's
cash equivalents and marketable securities are invested in highly rated
government securities and highly liquid money market funds.

                                       F-8


<PAGE>


                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     (d) Inventories

     Inventories are stated at the lower of first-in, first-out ("FIFO") cost or
market and consist of the following:

                                                      November 30,
                                                      ------------
                                                  2002             2001
                                                  ----             ----
      Raw materials ......................... $  953,000       $  951,000
      Work-in-process .......................    128,000          116,000
      Finished goods ........................    188,000          257,000
                                              ----------       ----------
                                              $1,269,000       $1,324,000
                                              ==========       ==========

     Work-in-process and finished goods inventories include material, labor and
manufacturing overhead. Management performs periodic reviews of inventory and
disposes of items not required by their manufacturing plan and reduces the
carrying cost of inventory items to the lower of cost or market (with market
value generally defined as the lower of replacement cost or net realizable
value).

     (e) Depreciation and Amortization

     The Company provides for depreciation and amortization, using the
straight-line method, by charges to operations in amounts that allocate the cost
of the equipment and leasehold improvements over their following estimated
useful lives:

                                                                     Useful
      Description                                                    Lives
      -----------                                                 ------------
      Machinery and equipment ..................................  3 to 5 years
      Furniture and fixtures ...................................    7 years
      Vehicles .................................................    3 years

     Leasehold improvements are amortized over the shorter of their economic
life or the life of the lease.

   (f) Property and Equipment

     Property and equipment are stated at cost, less accumulated depreciation
and amortization, and consist of the following:

                                                          November 30,
                                                   ------------------------
                                                      2002           2001
                                                      ----           ----
      Machinery and equipment .................... $3,819,000    $4,231,000
      Furniture and fixtures .....................    149,000       148,000
      Vehicles ...................................     61,000        61,000
      Leasehold improvements .....................  1,055,000     1.019,000
                                                   ----------    ----------
                                                    5,084,000     5,459,000
      Less--Accumulated depreciation
          and amortization .......................  4,780,000     4,990,000
                                                   ----------    ----------
                                                   $  304,000    $  469,000
                                                   ==========    ==========

                                       F-9



<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     (g) Other Assets

     Other assets include long-term deposits and an investment in preferred
stock of a company. The investment has been fully reserved for as of November
30, 2002. The investment was carried at cost as of November 30, 2001.

     (h) Foreign Currency

     The Company translates the assets and liabilities of its foreign
subsidiaries at the rates of exchange in effect at year-end. Revenues and
expenses are translated using exchange rates in effect during the year. Gains
and losses from foreign currency translation are credited or charged to
"Cumulative translation adjustment" included in stockholders' investment in the
accompanying consolidated balance sheets. Foreign currency transaction gains and
losses are included in general and administrative expenses in the accompanying
consolidated statements of operations. Foreign currency transaction gains and
losses were not significant for the years ended November 30, 2002, 2001 or 2000.

     (i) Revenue Recognition

     The Company recognizes revenue from sales to end users, resellers and
distributors upon shipment, provided persuasive evidence of an arrangement
exists, the sales price is fixed or determinable and collection of the related
receivable is probable. Warranty costs are estimated and recorded by the Company
at the time of revenue recognition.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements.
This bulletin established additional guidelines for revenue recognition. The
Company's revenue recognition policy complies with this pronouncement.

     During 2002 the Company adopted Emerging Issues Task Force (EITF) 00-10,
Accounting for Shipping and Handling Fees and Costs. In accordance with this
EITF, all amounts billed to a customer in a sale transaction related to shipping
and handling should be classified as revenue. Companies must also decide whether
to include these shipping and handling costs in cost of sales, or if significant
and are not to be included in cost of sales, a company should disclose both the
amount of such costs and the line item on its statement of operations that
includes these costs. The Company has historically accounted for shipping and
handling expenses as a reduction to the cost of sales in the statement of
operations to offset the costs incurred. The Company has recorded shipping and
handling costs in revenues and cost of sales in the accompanying statements of
operations for the years ended November 30, 2002, 2001 and 2000.

     During 2002, the Company adopted EITF 01-14, Income Statement
Characterization of Reimbursements Received for "Out-of-Pocket" Expenses
Incurred. In accordance with this EITF, reimbursements received for
out-of-pocket expenses incurred should be characterized in the income statement
as revenue. The Company has historically accounted for the reimbursements
received for out-of-pocket expenses incurred as a reduction to the cost of sales
in the statement of operations to offset the costs incurred. The Company had no
reimbursements for out-of-pocket costs for the years ended November 30, 2002,
2001 or 2000.

     (j) Research and Development Costs

     The Company charges research and development costs to operations as
incurred.

     (k) Concentration of Credit Risk

     SFAS No. 105, Disclosure of Information About Financial Instruments with
Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit
Risk, requires disclosure of any significant off-balance sheet and credit risk
concentrations. The Company has no significant off-balance sheet risk or
concentration of credit risk

                                      F-10



<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


such as foreign exchange contracts, option contracts or other foreign hedging
arrangements. Financial instruments that subject the Company to credit risk
consist primarily of trade accounts receivable. As of November 30, 2002 and
2001, no individual customer accounted for greater than 10% of accounts
receivable. For the years ended November 30, 2002, 2001 and 2000, no individual
customer accounted for greater than 10% of revenues.

     (l) Disclosure About Fair Value of Financial Instruments

     SFAS No. 107, Disclosure About Fair Market Value of Financial Instruments,
requires disclosure of estimated fair values for certain financial instruments.
The Company's financial instruments include cash, marketable securities,
accounts receivable and accounts payable. The carrying amounts of these
financial instruments approximate their fair value due to their short-term
nature.

     (m) Stock-based Compensation

     The Company accounts for stock options issued to employees under Accounting
Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees,
and complies with the disclosure provisions of SFAS No. 123, Accounting for
Stock-Based Compensation. SFAS No. 123 establishes a fair-value-based method of
accounting for stock-based compensation plans.

     The Company accounts for stock options issued to non-employees in
accordance with SFAS No. 123 and Emerging Issues Task Force (EITF) Issue No.
96-18, Accounting for Equity Instruments Issued to Other than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services. On September 25,
2000, the Company issued options to purchase 10,000 common shares to
non-employees. As of November 30, 2002, options to purchase 6,664 common shares
were vested. The value of these shares was not material in fiscal 2002. As of
November 30, 2002, 3,336 options are subject to vesting over the next two years.
The Company will record the value of these options over the period that services
are being provided.

     (n) Long-Lived Assets

     During 2002, the Company adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which supersedes SFAS No. 121 and
the accounting and reporting provisions of APB No. 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.

     The Company reviews its long-lived assets for impairment as events and
circumstances indicate that the carrying amount of an asset may not be
recoverable. Management believes that as of November 30, 2002 and 2001, none of
the Company's long-lived assets was impaired.

     (o) Comprehensive Income (Loss)

     SFAS No. 130, Reporting Comprehensive Income, requires disclosure of all
components of comprehensive income (loss) on an annual and interim basis.
Comprehensive income (loss) is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from nonowner sources. Comprehensive income (loss) consists of the net income
(loss) plus translation adjustments resulting from the consolidation of the
Company's foreign operations (see Note 2 (h)) and is disclosed in the
accompanying consolidated statements of stockholders' investment and
comprehensive loss.

     (p) Disclosures about Segments of an Enterprise

     SFAS No. 131, Disclosures About Segments of an Enterprise and Related
Information establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information


                                      F-11



<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


for those segments to be presented in interim financial reports issued to
stockholders. SFAS No. 131 also establishes standards for related disclosures
about products and services and geographic areas. Operating segments are
identified as components of an enterprise about which separate financial
information is available for evaluation by the chief decision-maker, or decision
making group, in making decisions how to allocate resources and assess
performance. The Company's chief operating decision-maker, as defined under SFAS
No. 131, is the chief executive officer (see Note 8).

     (q) Derivatives

     SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
as amended by SFAS No. 137 and SFAS No. 138, establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. SFAS No.
133 requires that an entity recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value.
The Company adopted SFAS No. 133 in the fiscal year ended November 30, 2001. The
adoption did not have a material impact on the Company's financial statements or
results of operations.

     (r) New Accounting Standards

     In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. This Statement rescinds FASB Statement No. 4, Reporting Gains and
Losses from Extinguishment of Debt, and an amendment of that Statement, FASB
Statement No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements and FASB Statement No. 44, Accounting for Intangible Assets of
Motor Carriers. This statement also amends FASB Statement No. 13, Accounting for
Leases, to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions and various other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their applicability
under changed conditions. This statement is effective for financial statements
issued on or after May 15, 2002. The adoption of the statement did not have a
material effect of the consolidated statement of operations.

     In July 30, 2002, the FASB issued FASB Statement No. 146, Accounting for
the Costs Associated with Exit or Disposal Activities. This statement requires
companies to recognize costs associated with exit or disposal activities only
when liabilities for those costs are incurred rather than at the date of a
commitment to an exit or disposal plan. FASB No. 146 also requires companies to
initially measure liabilities for exit and disposal activities at their fair
values. FASB No. 146 replaces Emerging Issues Task Force ("EITF") Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)
and EITF No. 88-10, Costs Associated with Lease Modification or Termination. The
provisions of FASB No. 146 are effective for exit or disposal activities that
are initiated after December 31, 2002.

     In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure - an amendment of FASB Statement No.
123. This Statement amends SFAS No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. This
Statement also requires that those effects be disclosed more prominently by
specifying the form, content, and location of those disclosures.

                                      F-12



<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3. Net Income (Loss) Per Common Share

     The Company applies SFAS No. 128, Earnings Per Share. This statement
establishes standards for computing and presenting earnings per share and
applies to entities with publicly traded common stock or potential common stock.
Basic earnings per share is determined by dividing net income (loss) by the
weighted average common shares outstanding during the period. Diluted earnings
per share is determined by dividing net income (loss) by diluted weighted
average shares outstanding. Diluted weighted average shares reflects the
dilutive effect, if any, of potential common stock. Potential common stock
includes options to purchase common stock to the extent their effect is
dilutive. Basic net loss per share is the same as diluted net loss per share for
all periods presented, as the effects of the potential common stock are
antidilutive. Diluted weighted average shares outstanding do not include
approximately 621, 10,578, and 146,759 shares of potential common stock,
calculated using the treasury stock method, for the years ended November 30,
2002, 2001 and 2000, respectively, as their effect would be antidilutive.

4.   Stockholders' Investment

     (a) Stock Purchase Rights Plan

     On April 14, 1999, the Board of Directors of the Company declared a special
dividend distribution (a right) for each outstanding share of common stock of
the Company outstanding as of April 30, 1999. The rights will become exercisable
only if a person or group (i) acquires 15% or more of the Company's common
stock, or (ii) announces a tender offer that would result in ownership of 15% or
more of the common stock. Each right would entitle a stockholder to buy one
one-hundredth of a share of preferred stock. Once a person or group has acquired
15% or more of the outstanding common stock of the Company, each right may
entitle its holder (other than the 15% person or group) to purchase $21.00 worth
of newly issued shares of common stock of the Company (or of any company that
acquires Data Translation) at a price equal to 50% of their current market
price. The rights are redeemable at the option of the Board of Directors up
until 10 days after public announcement that any person or group has acquired
15% or more of Data Translation's common stock. The redemption price is $0.001
per right. The rights will expire on April 30, 2009, unless redeemed prior to
that date.

     (b) Rights Offering

     The Company commenced a rights offering of up to 2,325,614 shares of common
stock to its existing stockholders at a subscription price of $1.25 per share on
July 26, 2001. Each holder of common stock of record as of July 25, 2001, was
entitled to receive one right for each share of common stock held as of such
date. Stockholders who fully exercised their basic subscription rights also had
over-subscription privileges. The subscription period for the rights offering
expired on August 14, 2001. As of the expiration date of the rights offering,
the holders of the rights had subscribed for an aggregate of 1,238,269 shares of
common stock for total net proceeds to the Company of approximately $1,446,000.

     (c) Employee Stock Purchase Plan

     In December 1996, the Company established an Employee Stock Purchase Plan
(the "ESPP") which permits the eligible employees of the Company and its
subsidiaries to purchase shares of the Company's common stock, at 85% of the
Company's closing market price on either the first day or last day of the
applicable six-month period, whichever is lower. Employees may participate in
the ESPP through regular monthly payroll deductions of up to 10% of their
pre-tax gross salary. Subject to adjustment for stock splits, stock dividends
and similar events, a maximum of 300,000 shares of common stock may be issued
under the ESPP. Through November 30, 2002, 144,550 shares of common stock have
been purchased under the ESPP.(d) Stock Option Plans

     Replacement Stock Option Plan

     Effective December 2, 1996, the Company's Board of Directors adopted the
Company's Replacement Stock Option Plan (the "Replacement Plan"). The
Replacement Plan provided for the issuance of options to purchase

                                      F-13

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


shares of the Company's common stock (the "Replacement Options") to holders of
options to purchase shares of Parent Stock that were granted under Parent Plans
and which were outstanding on the Distribution Date (the "Parent Options") as
part of an adjustment to the Parent Options. The Company has authorized the
issuance of up to 275,000 shares of the Company's common stock under the
Replacement Plan, of which options for 264,794 shares of common stock were
granted as of November 30, 2002. No additional options may be granted under the
Replacement Plan.

     It was intended that Replacement Options issued to employees of the Company
("Transferred Employees") in respect of Parent Options that qualified as
incentive stock options (ISO's) shall continue to qualify as ISO's pursuant to
Section 424(a) of the Internal Revenue Code. Replacement Options that do not
qualify as ISO's will be nonqualified stock options.

     1996 Stock Option Plan

     In December 1996, the Company adopted the 1996 Stock Option Plan (the "1996
Plan") for its key employees, directors and others, which permits the grant of
stock options as approved by the Company's Board of Directors (the Board). Under
the 1996 Plan, 1,500,000 shares of common stock have been reserved for issuance.
At the discretion of the Board, options granted pursuant to the 1996 Plan may be
ISO's as defined by the Code provided that the exercise price of the stock
option is not less than 100% of the fair market value of the Company's common
stock. The Board will determine the exercise price of stock options granted and
when the options will vest and expire, but in no event will the option period
exceed 10 years. As of November 30, 2002, 1,415,117 shares of common stock were
available for future issuance under the 1996 Plan.

     All of the Company's stock options granted to employees during 2002, 2001
and 2000 were granted with exercise prices equal to the fair market value of the
Company's common stock. As a result, in accordance with APB Opinion No. 25, no
stock-based compensation was recorded in connection with these options.

     The stock option activity under the Replacement Plan and the 1996 Plan for
the three years ended November 30, 2002 is as follows:

                                    Number of   Exercise Price     Weighted Avg
                                      Shares         Range        Exercise Price
                                    ---------   --------------    --------------
Outstanding, November 30, 1999 ...   499,912      $1.44- 5.53          $3.24
     Granted .....................   598,650       2.94- 8.88           6.21
     Exercised ...................   (86,572)      1.44- 5.08           2.25
     Expired/canceled ............  (183,796)      1.44- 8.88           6.15
                                    --------      -----------          -----
Outstanding, November 30, 2000 ...   828,194       1.50- 8.88           5.81
     Granted .....................    15,300       1.50- 2.50           1.96
     Exercised ...................       200       1.50- 1.50           1.50
     Expired/canceled ............  (218,914)      1.50- 7.75           4.94
                                    --------      -----------          -----
Outstanding, November 30, 2001 ...   624,780       1.50- 8.88           4.81
     Granted .....................   370,400        .46- 1.00            .62
     Exercised ...................         0        .00-  .00            .00
     Expired/canceled ............  (424,800)       .68- 8.88           6.14
                                    --------      -----------          -----
Outstanding, November 30, 2002 ...   570,380      $ .46-$6.75          $1.83
                                    ========      ===========          =====
Exercisable, November 30, 2000 ...   204,042      $1.50-$8.88          $4.53
                                    ========      ===========          =====
Exercisable, November 30, 2001 ...   347,313      $1.50-$8.88          $4.81
                                    ========      ===========          =====
Exercisable, November 30, 2002 ...   297,029      $ .46-$6.75          $1.89

                                      F-14


<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The range of exercise prices for options outstanding and options exercisable at
November 30, 2002 for the Replacement Plan and the 1996 Plan is as follows:
<TABLE>
<CAPTION>
                                       Weighted        Weighted                 Weighted
                                        Average         Average                  Average
       Range of          Options      Remaining        Exercise     Options     Exercise
   Exercise Prices    Outstanding   Contractual Life     Price    Exercisable     Price
   ---------------    -----------   ----------------   --------   -----------   --------
<S>                  <C>            <C>                <C>        <C>           <C>
   $ .46- .50            5,500            5.3           $ .47           0       $ .47
   $ .60               232,800            5.0             .60      77,568         .60
   $ .66-1.00          127,700            3.8             .77      38,882         .77
   $1.50                85,438            2.1            1.50      80,885        1.50
   $1.94-2.25            3,226            1.6            2.00       2,592        2.00
   $2.41                21,496            1.1            2.41      21,496        2.41
   $2.50-3.00           57,220            2.1            2.95      39,274        2.95
   $3.25-6.75           37,000            1.1            4.10      36,332        4.10
                       -------           ----           ------    -------       -----
                       570,380           2.75           $1.83     297,029       $1.89
                       =======           ====           =====     =======       =====
</TABLE>


     (e) Stock-based Compensation

     The Company has computed the pro forma disclosures required under SFAS No.
123 for all stock option grants during the years ended November 30, 2002, 2001
and 2000 using the Black-Scholes option pricing model prescribed by SFAS No.
123. The assumptions used in 2002, 2001 and 2000 are as follows: dividend yield
of 0% for all years; expected volatility of 31%, 62% and 77% respectively,
risk-free interest rates of 2.94% - 4.74%, 3.91% - 5.17% and 5.42% - 6.69%
respectively, and expected lives of five years for all years. The weighted
average grant date fair value of options granted during 2002, 2001 and 2000 was
$.62, $1.96 and $6.21, respectively. The weighted average remaining contractual
life of outstanding options at November 30, 2002 was 2.75 years.

     Had compensation cost for these plans been determined consistent with SFAS
No. 123, the Company's net income (loss) and net income (loss) per share would
have been the following pro forma amounts:
<TABLE>
<CAPTION>

                                                         Years Ended November 30,
                                                         -----------------------
                                                   2002          2001           2000
                                                   ----          ----           ----
<S>                                              <C>             <C>             <C>
Net loss:
     As reported ............................  $(1,159,000)  $(1,329,000)   $(1,713,000)
     Pro forma ..............................  $(1,859,000)  $(1,985,000)   $(2,557,000)
Basic and diluted net loss per common
  and potential common share outstanding:
     As reported ............................  $     (0.33)  $     (0.52)   $     (0.78)
     Pro forma ..............................  $     (0.53)  $     (0.77)   $     (1.16)
</TABLE>

The resulting pro forma compensation expense may not be representative of the
amount to be expected in future years, as the pro forma expense may vary based
on the number of options granted. The Black-Scholes option pricing model was
developed for use in estimating the fair value of traded options that have no
vesting restrictions and are fully transferable. In addition, option pricing
models require the input of highly subjective assumptions, including expected
stock price volatility. Because the Company's employee stock options have
characteristics significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.


                                      F-15

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     (f) Stock Buyback Plan

     On June 22, 2000, the Company announced that its Board had approved the
purchase of up to 250,000 of its shares of common stock over the remainder of
the calendar year. Purchases were made at prevailing prices as market conditions
and cash availability permitted. As of December 31, 2000, the Company had
completed the programs and repurchased 41,465 and 15,000 shares of its common
stock under the 2000 and a 1999 stock buyback plan, respectively, for an
aggregate purchase price of $227,000, which is classified as treasury stock in
the accompanying consolidated statements of stockholders' investment and
comprehensive income (loss).

     (g) Stock Option Repricing

     On December 16, 1998, the Company's Board authorized the repricing of
employee options to purchase 100,000 shares of common stock from an exercise
price of $3.00 per share to an exercise price of $1.50 per share, which
represented the fair market value of the Company's common stock on the date of
repricing. These options are subject to variable plan accounting, as defined in
FIN 44 (see Note 2(m)). There were no charges required during fiscal years 2002,
2001 or 2000 related to fluctuations in the Company's stock price. As of
November 30, 2002 and 2001, options to purchase 50,001 shares of common stock,
are outstanding and are still subject to variable plan accounting.

     (h) Stock Option Exchange

     On February 21, 2002, the Company announced an offer to certain holders of
outstanding options to purchase the Company's common stock the opportunity to
exchange and cancel their outstanding options to purchase shares of the
Company's common stock for new options to purchase the same number of shares
covered by the options tendered for exchange. All options having an exercise
price of $4.00 or more per share that were then currently outstanding under the
Company's 1996 Stock Option Plan were eligible. The option holder must continue
to be an employee of the Company on the date of grant of new options, which was
to be on or about the first business day that is at least six months and one day
following the date of cancellation of eligible options. The new options would
vest over two years from the date of issuance. One third of the option would be
vested as of the date of issuance of the new option and one fourth of the
remaining unvested portion of the option would vest every six months from the
date of issuance of the new option. The offer expired at 5:00 p.m., Eastern
Standard Time, on Friday, March 22, 2002. Pursuant to the offer, the Company
accepted for exchange and cancellation options to purchase an aggregate of
362,800 shares of Data Translation common stock, representing approximately 99%
of the shares subject to options that were eligible for exchange in the offer.
Subject to the terms and conditions described in the exchange offering, the
Company granted new options to purchase up to an aggregate of 362,800 shares of
Data Translation common stock on September 26, 2002 in exchange for the options
surrendered in the offer.

5.   Employee Savings Plan

     In December 1996, the Company established the Employee Savings Plan (the
Savings Plan). In the event the Company is profitable, the Savings Plan provides
for annual Company contributions of up to 15% of the first 6% of total salary
per participant. These contributions vest immediately. Contributions to the
Savings Plan charged to operations in 2002, 2001 and 2000 were $0, $0 and
$30,000, respectively.

     The Company does not provide postretirement benefits to any employees as
defined under SFAS No. 106, Employers Accounting for Postretirement Benefits
Other Than Pensions.

6.   Commitments and Contingencies

     (a) Lease Commitments

     The Company has operating lease agreements expiring in December 2009 for a
building and property owned by a related party trust. The agreements require the
Company to pay aggregate minimum annual rental payments plus other expenses of
the lessor on a net basis. Total rental expense charged to operations on these
leases included in the


                                      F-16

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


accompanying consolidated statements of operations, net of sub-lease and rent
allocations, was approximately $276,000, $216,000 and $243,000 for the years
ended November 30, 2002, 2001 and 2000, respectively.

     In addition, the Company leases sales facilities and equipment under leases
expiring through 2005. Rent expense, net of sub-lease agreements totaled
$100,000 $123,000 and $189,000 in the years ended November 30, 2002, 2001 and
2000, respectively. Future minimum lease payments, net of sub-lease payments to
be received, under all operating leases are as follows:

          Fiscal Years Ending November 30,                    Amount
          -------------------------------                  -----------
          2003 ..........................................    $994,000
          2004 ..........................................   1,018,000
          2005 ..........................................   1,091,000
          2006 ..........................................   1,366,000
          2007 ..........................................   1,300,000
          Thereafter ....................................   2,600,000
                                                           ----------
          Total minimum lease payments ..................  $8,369,000
                                                           ==========

     (b) Contingencies

     From time to time, the Company is involved in disputes and/or litigation
encountered in its normal course of business. The Company does not believe that
the ultimate impact of the resolution of such matters will have a material
adverse effect on the Company's financial condition or results of operations.

7.   Income Taxes

     The Company accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes, whereby a deferred tax asset or liability is
recognized for the expected future tax consequences of temporary differences
between the financial statement and the tax bases of the assets and liabilities.

     At November 30, 2002, the Company had approximately $12,396,000 of federal
and state net operating loss carryforwards available to offset future taxable
income, which expire in varying amounts through 2022. Due to the uncertainty
surrounding the timing of realizing the benefits of its favorable tax attributes
in future income tax returns, the Company has placed a full valuation allowance
against its otherwise recognizable deferred tax assets at November 30, 2002 and
2001.

    The approximate income tax effect of each type of temporary difference and
carryforward is as follows:

                                                            November 30,
                                                            ------------
                                                        2002           2001
                                                       ------         ------
      Net operating loss carryforwards ............   $4,992,000    $4,184,000
      Depreciation ................................      679,000       820,000
      Nondeductible accruals ......................      726,000       575,000
      Less--valuation allowance ...................   (6,397,000)   (5,529,000)
                                                      ----------    -----------
            Net deferred tax asset (liability) ....   $       --    $       --
                                                      ==========    ===========


                                      F-17

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.   Segment and Geographic Information

     (a) Segment Reporting

     The Company's reportable segments are Core and Commercial. The Core segment
is composed of the imaging and data acquisition business that consists of
plug-in cards and Microsoft(R)Windows(R)-based software that provide an
integrated, high performance system solution to the general scientific and
measurement marketplace. The Commercial segment is composed of a plug-in video
capture card; Broadway, which is a high-performance video capture and encoding
system for Microsoft(R) Windows(R) 98 and Microsoft(R) Windows(R) NT personal
computers. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The Company
evaluates performance based on revenues and operating margin. Revenues are
attributed to geographic areas based on where the customer is located. Segment
information for the years ended November 30, 2002, 2001 and 2000 is as follows:

                                               Core      Commercial     Total
                                               ----      ----------     -----
 Fiscal 2002
 Revenues from unaffiliated customers ... $11,009,000  $  541,000  $11,550,000
 Cost of revenue ........................   5,116,000     249,000    5,365,000
 Research and development ...............   2,824,000      20,000    2,844,000
                                          -----------  ----------  -----------
 Operating margin (1) ................... $ 3,069,000  $  272,000  $ 3,341,000
                                          ===========  ==========  ===========
 Fiscal 2001

 Revenues from unaffiliated customers ... $13,780,000  $1,105,000  $14,885,000
 Cost of revenue ........................   6,331,000     559,000    6,890,000
 Research and development ...............   3,041,000       9,000    3,050,000
                                          -----------  ----------  -----------
 Operating margin (1) ................... $ 4,408,000  $  537,000  $ 4,945,000
                                          ===========  ==========  ===========
 Fiscal 2000
 Revenues from unaffiliated customers ... $13,998,000  $1,926,000  $15,924,000
 Cost of revenue ........................   6,638,000     952,000    7,590,000
 Research and development ...............   2,830,000     201,000    3,031,000
                                          -----------  ----------  -----------
 Operating margin (1) ................... $ 4,530,000  $  773,000  $ 5,303,000
                                          ===========  ==========  ===========

     (1)  The operating margins reported reflect only the expenses of the line
          of business and do not represent the actual margins for each operating
          segment since they do not contain an allocation for selling and
          marketing, general and administrative, development and other corporate
          expenses incurred in support of the line of business.

     Profit (Loss) Reconciliation:
<TABLE>
<CAPTION>

                                                                   Fiscal Years Ended November 30,
                                                             ----------------------------------------
                                                              2002            2001               2000
                                                              ----            ----               ----
 <S>                                                      <C>              <C>               <C>
 Total operating margin for reportable segments ......... $ 3,341,000      $ 4,945,000       $ 5,303,000
 Selling and marketing expenses .........................  (3,132,000)      (4,627,000)       (5,113,000)
 General and administrative expenses ....................  (1,415,000)      (1,723,000)       (2,017,000)
 Interest income ........................................      47,000           76,000           114,000
                                                          -----------      -----------       -----------
    (Loss) income before provision for income taxes ..... $(1,159,000)     $(1,329,000)      $(1,713,000)
                                                          ===========      ===========       ===========
</TABLE>

                                      F-18

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     (b) Geographic Information
<TABLE>
<CAPTION>

                                                                        United
                                                        United States   Kingdom      Germany     Eliminations     Consolidated
                                                        -------------   -------      -------     ------------     ------------
<S>                                                     <C>              <C>           <C>        <C>              <C>
 Fiscal 2002
 Sales to unaffiliated customers(1) ...................  $ 9,125,000  $1,017,000    $1,408,000   $        --      $11,550,000
 Sales or transfers between geographic areas ..........    1,016,000          --            --    (1,016,000)              --
                                                         -----------  ----------    ----------   -----------      -----------
 Total net sales ......................................  $10,141,000  $1,017,000    $1,408,000   $(1,016,000)     $11,550,000
                                                         ===========  ==========    ==========   ===========      ===========
 (Loss) income from continuing operations before
     provision for income taxes .......................  $(1,128,000) $  (37,000)   $   12,000   $    (6,000)     $(1,159,000)
                                                         ============ ==========    ==========   ===========      ===========
 Property and equipment ...............................  $   276,000  $   26,000    $   15,000   $   (13,000)     $   304,000
                                                         ===========  ==========    ==========   ===========      ===========
 Fiscal 2001
 Sales to unaffiliated customers(1) ...................  $11,414,000  $1,455,000    $2,016,000   $        --      $14,885,000
 Sales or transfers between geographic areas ..........    1,677,000          --            --    (1,677,000)              --
                                                         -----------  ----------    ----------   -----------      -----------
 Total net sales ......................................  $13,091,000  $1,455,000    $2,016,000   $(1,677,000)     $14,885,000
                                                         ===========  ==========    ==========   ===========      ===========
 (Loss) income from continuing operations before
     provision for income taxes .......................  $(1,396,000) $    6,000    $   72,000   $   (11,000)     $(1,329,000)
                                                         ===========  ==========    ==========   ===========      ===========
 Property and equipment ...............................  $   420,000  $   44,000    $   18,000   $   (13,000)     $   469,000
                                                         ===========  ==========    ==========   ===========      ===========
 Fiscal 2000
 Sales to unaffiliated customers(1) ...................  $12,277,000  $1,342,000    $2,305,000   $        --      $15,924,000
 Sales or transfers between geographic areas ..........    1,818,000          --            --    (1,818,000)              --
                                                        ------------  ----------    ----------   -----------      -----------
 Total net sales ......................................  $14,095,000  $1,342,000    $2,305,000   $(1,818,000)     $15,924,000
                                                         ===========  ==========   ===========  ============      ===========
 (Loss) income from continuing operations before
     provision for income taxes .......................  $(1,628,000) $ (104,000)   $   27,000   $    (8,000)     $(1,713,000)
                                                         ===========  ==========    ==========   ===========      ===========
 Property and equipment ...............................  $   819,000  $   62,000    $   23,000   $   (14,000)     $   890,000
                                                         ===========  ==========    ==========   ===========      ===========
</TABLE>

     (1)  Foreign sales from the United States to unaffiliated customers for the
          years ended November 30, 2002, 2001 and 2000 were approximately
          $2,575,000, $2,700,000 and $3,533,000, respectively.

9.   Accrued Expenses

     Accrued expenses consist of the following:

                                                         November 30,
                                                    -----------------------
                                                      2002          2001
                                                      ----          ----
      Payroll and related taxes .................  $  234,000    $  244,000
      Fringe benefits ...........................     329,000       286,000
      Marketing .................................      55,000       205,000
      Other .....................................     974,000     1,109,000
                                                   ----------    ----------
                                                   $1,592,000    $1,844,000


                                      F-19

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



10.   Selected Quarterly Information (Unaudited)

For the Fiscal Quarters Ended:
<TABLE>
<CAPTION>

                                      February 28,        May 31,         August 31,      November 30,
                                      ------------        -------         ----------      ------------
2002                                                (In thousands, except per share data)
----                                                ------------------------------------
<S>                                   <C>              <C>               <C>               <C>
Net sales                               $ 2,769         $  3,003         $  2,771          $  3,007
Gross profit                              1,446            1,581            1,533             1,625
Loss from operations                       (309)            (268)            (347)             (282)
Net loss                                   (299)            (267)            (325)             (267)
Basic and diluted loss per share        $ (0.09)        $  (0.08)        $  (0.09)         $  (0.08)

2001
----
Net sales                               $ 4,186         $  3,998         $  3,648           $ 3,053
Gross profit                              2,377            2,271            1,799             1,548
Loss from operations                        (79)            (192)            (687)             (447)
Net loss                                    (53)            (176)            (672)             (428)
Basic and diluted loss per share        $ (0.02)        $  (0.08)        $  (0.29)          $ (0.12)
</TABLE>



                                      F-20


<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 8.   Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

     On June 28, 2002, the Company terminated the engagement of Arthur Andersen
LLP as its independent accountants. On August 26, 2002, the Company engaged BDO
Seidman, LLP as its new independent accountants for the 2002 fiscal year.
Details with respect to these matters were "previously reported" within the
meaning of Rule 12b-2 in the Company's reports on Form 8-K filed with the
Commission on June 28, 2002 and September 27, 2002, respectively.

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act

     Directors. The information appearing under the caption "Nomination and
Election of Directors" in the Company's Proxy Statement for its Annual Meeting
of Stockholders to be held on April 16, 2003 (the "Proxy Statement") is
incorporated herein by reference.

     Executive Officers. Information in response to this Item appears under the
caption "Executive Officers of the Company" in Item 1 of this Form 10-KSB.

     Section 16(a) Beneficial Ownership Reporting Compliance. The information
appearing under the caption "Nomination and Election of Directors" in the Proxy
Statement is incorporated herein by reference.

Item 10.   Executive Compensation

     The information required by this Item appears under the caption "Executive
Compensation" in the Proxy Statement and is incorporated herein by reference.

Item 11.   Security Ownership of Certain Beneficial Owners and Management

     The information required by this Item appears under the caption "Security
Ownership of Certain Beneficial Owners and Management" in the Proxy Statement
and is incorporated herein by reference.

Item 12.   Certain Relationships and Related Transactions

     The information required by this Item appears under the caption "Certain
Relationships and Related Transactions" in the Proxy Statement and is
incorporated herein by reference.

                                      F-21

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 13.   Exhibits and Reports on Form 8K.

     (a)  Financial Statements. The Index to Consolidated Financial Statements
          appears at page [17] of this Form 10-KSB.

          Exhibits. Exhibits 10.6 through 10.8 constitute all of the management
          contracts and compensation plans and arrangements of the Company
          required to be filed as Exhibits to this Form 10-KSB.

        3.1     Certificate of Incorporation of Registrant/1/
        3.2     By-laws of Registrant/1/
        4.1     Specimen Stock Certificate of Common Stock (See also Exhibits
                3.1 and 3.2)/1/
        10.1    Distribution Agreement dated as of November 19, 1996 with Media
                100 Inc./2/
        10.2    Intellectual Property Agreement dated as of December 2, 1996
                with Media 100 Inc./3/
        10.3    Corporate Services Agreement dated as of December 2, 1996 with
                Media 100 Inc./4/
        10.4    Use and Occupancy Agreement dated as of December 2, 1996 with
                Media 100 Inc./5/
        10.5    Lease dated December 1, 1979, as amended, for Locke Drive with
                Nason Hill Trust/1/
        10.6    1996 Stock Option Plan/6/
        10.7    Employee Stock Purchase Plan/7/
        10.8    Replacement Stock Option Plan/8/
        10.9*   Software Bundling Master License Agreement/1/
        10.10*  Distribution Agreement dated June 26, 1996 by and between Data
                Translation, Inc. and DS Datenverarbeitung und Sensortechnik
                GmbH/1/
        21      List of Subsidiaries of the Registrant
        23.1    Consent of BDO Seidman, LLP
        27      Financial Data Schedule
        99.1    Certification by Chief Executive Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002
        99.2    Certification by Chief Financial Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002

* Certain portions have been omitted and filed separately with the Securities
and Exchange Commission.

          1    Incorporated herein by reference to the Company's Registration
               Statement on Form 10 (No. 000-21367) filed with the Securities
               and Exchange Commission on November 26, 1996
          2    Incorporated herein by reference to Exhibit 10.8.1 to the 1996
               Annual Report on Form 10-K of Media 100 Inc. (File No. 0-14779)
               filed with the Securities and Exchange Commission on February 28,
               1997
          3    Incorporated herein by reference to Exhibit 10.8.2 to the 1996
               Annual Report on Form 10-K of Media 100 Inc. (File No. 0-14779)
               filed with the Securities and Exchange Commission on February 28,
               1997
          4    Incorporated herein by reference to Exhibit 10.8.3 to the 1996
               Annual Report on Form 10-K of Media 100 Inc. (File No. 0-14779)
               filed with the Securities and Exchange Commission on February 28,
               1997
          5    Incorporated herein by reference to Exhibit 10.8.4 to the 1996
               Annual Report on Form 10-K of Media 100 Inc. (File No. 0-14779)
               filed with the Securities and Exchange Commission on February 28,
               1997
          6    Incorporated herein by reference to the Company's Registration
               Statement on Form S-8 (No. 333-16855) filed with the Securities
               and Exchange Commission on November 26, 1996
          7    Incorporated herein by reference to the Company's Registration
               Statement on Form S-8 (No. 333-16857) filed with the Securities
               and Exchange Commission on November 26, 1996
          8    Incorporated herein by reference to the Company's Registration
               Statement on Form S-8 (No. 333-16859) filed with the Securities
               and Exchange Commission on November 26, 1996

(b) Reports on Form 8K. There were no reports on form 8K filed during the last
quarter of the period covered by this audit.

                                      F-22

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 14.   Controls and Procedures

Within the 90-day period prior to the filing date of this report, an evaluation
was conducted under the supervision and with the participation if the Company's
management, including the Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and procedures are
effective to ensure that all material information relating to the Company,
including our consolidated subsidiaries, is made known to them particularly
during the period when our periodic reports are being prepared. It should be
noted that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under the potential
future conditions, regardless of how remote.

Subsequent to the date of this evaluation there have been no significant changes
in our internal controls or in other factors that could significantly affect our
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

                                      F-23

<PAGE>
                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                     DATA TRANSLATION, INC.

                                     /S/ ALFRED A. MOLINARI, JR.
                                     By:
                                     Alfred A. Molinari, Jr.,
                                     Chief Executive Officer

Date:   February 28, 2003

     Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons on behalf of the registrant and in the
capacities and on the date indicated.

        Signature                  Title                              Date
        ---------                  -----                              ----

/s/ Alfred A. Molinari, Jr.      Chief Executive Officer and   February 28, 2003
------------------------------    Chairman
    Alfred A. Molinari, Jr.

/s/ Michael  A. DiPoto           VP Finance and CFO            February 28, 2003
------------------------------
    Michael A. DiPoto

/s/ Dr. David Cyganski           Director                      February 28, 2003
------------------------------
    Dr. David Cyganski

/s/ D'Anne Hurd                  Director                      February 28, 2003
------------------------------
    D'Anne Hurd

/s/ Ellen Harpin                 VP, Engineering and Director  February 28, 2003
------------------------------
    Ellen Harpin

                                      F-24

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER

                            Section 302 Certification

I, ALFRED A. MOLINARI, certify that:

(1) I have reviewed this annual report on Form 10-KSB of DATA TRANSLATION, INC.,
a Delaware corporation (the "registrant");

(2) Based on my knowledge, this annual 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 annual
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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:

     (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 annual 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 annual report (the "Evaluation Date"); and

     (c)  presented in this annual 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 the registrant's board of directors (or persons performing the equivalent
function):

     (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
annual report whether or not 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:  February 28, 2003

                              By: /s/ Alfred A. Molinari
                                  -------------------------
                                  Alfred A. Molinari
                                  Chief Executive Officer

<PAGE>

                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

                            Section 302 Certification

I, MICHAEL A. DIPOTO, certify that:

(1) I have reviewed this annual report on Form 10-KSB of DATA TRANSLATION, INC.,
a Delaware corporation (the "registrant");

(2) Based on my knowledge, this annual 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 annual
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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:

     (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 annual 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 annual report (the "Evaluation Date"); and

     (c)  presented in this annual 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 the registrant's board of directors (or persons performing the equivalent
function):

     (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
annual report whether or not 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:  February 28, 2003

                              By: /s/ Michael A. DiPoto
                                  -------------------------
                                  Michael A. DiPoto
                                  Chief Financial Officer

<PAGE>


                    DATA TRANSLATION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EXHIBIT INDEX

 Exhibit
  Number                      Document Description
  ------                      --------------------
   21          List of Subsidiaries of the Registrant
   23.1        Consent of BDO Seidman, LLP
   99.1        Certification by Chief Executive Officer pursuant to 18 U.S.C.
               Section 1350, as adopted pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002
   99.2        Certification by Chief Financial Officer pursuant to 18 U.S.C.
               Section 1350, as adopted pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002