UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                    FORM 10-Q

 (Mark One)
           X       Quarterly Report Pursuant to Section 13 or 15(d) of
          ---
                       the Securities Exchange Act of 1934

                For the Quarterly Period Ended December 31, 2006

                                       or

                  Transition Report Pursuant to Section 13 or 15(d) of
           ---
                       the Securities Exchange Act of 1934

                   For the Transition Period from ____ to ____

                           Commission File No. 0-13150
                                  _____________

                         CONCURRENT COMPUTER CORPORATION
             (Exact name of registrant as specified in its charter)

               Delaware                                04-2735766
    (State or other jurisdiction        (I.R.S. Employer Identification No.)
  of incorporation or organization)

             4375 River Green Parkway, Suite 100, Duluth, GA  30096
               (Address of principal executive offices) (Zip Code)

                            Telephone: (678) 258-4000
              (Registrant's telephone number, including area code)

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

                               Yes   X      No
                                    ---        ---

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.  (Check
one):
  Large Accelerated Filer      Accelerated Filer X   Non-Accelerated Filer
                          ---                   ---                       ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                  Yes    No   X
                                     ---     ---

Number of shares of the Registrant's Common Stock, par value $0.01 per share,
outstanding as of February 5, 2007 was 71,651,000.


<PAGE>
<TABLE>
<CAPTION>
                              CONCURRENT COMPUTER CORPORATION
                                         FORM 10-Q
                    FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2006

                                     TABLE OF CONTENTS

                                                                                       PAGE
                                                                                       ----

                                PART I - FINANCIAL INFORMATION
                                ------------------------------
<S>       <C>                                                                          <C>

ITEM 1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                     2
            CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS                                                                     15
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                     25
ITEM 4.   CONTROLS AND PROCEDURES                                                        25
                                  PART II - OTHER INFORMATION
                                  ---------------------------
ITEM 1.   LEGAL PROCEEDINGS                                                              25
ITEM 1A.  RISK FACTORS                                                                   25
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                            26
ITEM 6.   EXHIBITS                                                                       26
          EX-10.1 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
          EX-31.1 SECTION 302 CERTIFICATION OF CEO
          EX-31.2 SECTION 302 CERTIFICATION OF CFO
          EX-32.1 SECTION 906 CERTIFICATION OF CEO
          EX-32.2 SECTION 906 CERTIFICATION OF CFO
</TABLE>


                                        1
<PAGE>
PART I     FINANCIAL INFORMATION
ITEM 1.     CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                               CONCURRENT COMPUTER CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                   (DOLLARS IN THOUSANDS)


                                                                   DECEMBER 31,    JUNE 30,
                                                                       2006          2006
                                                                  --------------  ----------
ASSETS
<S>                                                               <C>             <C>
  Current assets:
  Cash and cash equivalents                                       $       8,335   $  14,423
  Accounts receivable, less allowance for doubtful accounts
    of $316 at December 31, 2006 and $380 at June 30, 2006               14,439      15,111
  Inventories - net                                                       5,617       6,164
  Prepaid expenses and other current assets                               1,857       1,578
                                                                  --------------  ----------
    Total current assets                                                 30,248      37,276
Property, plant and equipment - net                                       5,320       6,015
Intangible assets - net                                                   8,243       8,787
Goodwill                                                                 15,560      15,560
Other long-term assets - net                                                921       1,120
                                                                  --------------  ----------
    Total assets                                                  $      60,292   $  68,758
                                                                  ==============  ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued expenses                           $      12,087   $  11,581
  Revolving bank line of credit                                           1,077           -
  Notes payable to bank, current portion                                      -       1,034
  Short term note payable                                                   281           -
  Deferred revenue                                                        6,700       7,277
                                                                  --------------  ----------
    Total current liabilities                                            20,145      19,892
Long-term liabilities:
  Deferred revenue                                                        1,115       1,602
  Notes payable to bank, less current portion                                 -         549
  Pension liability                                                       2,453       2,290
  Other                                                                     633         651
                                                                  --------------  ----------
    Total liabilities                                                    24,346      24,984
Commitments and contingencies (Note 12)

Stockholders' equity:
  Shares of common stock, par value $.01; 100,000,000 authorized;
    71,638,006 and 71,530,763 issued and outstanding at
    December 31, 2006 and June 30, 2006, respectively                       717         716
  Capital in excess of par value                                        189,893     189,409
  Accumulated deficit                                                  (154,183)   (145,800)
  Treasury stock, at cost; 17,253 shares and 3,971 at
    December 31, 2006 and June 30, 2006, respectively                       (30)        (13)
  Accumulated other comprehensive loss                                     (451)       (538)
                                                                  --------------  ----------
    Total stockholders' equity                                           35,946      43,774
                                                                  --------------  ----------
Total liabilities and stockholders' equity                        $      60,292   $  68,758
                                                                  ==============  ==========
</TABLE>

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


                                        2
<PAGE>
<TABLE>
<CAPTION>
                               CONCURRENT COMPUTER CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                          THREE MONTHS ENDED           SIX MONTHS ENDED
                                              DECEMBER 31,                DECEMBER 31,
                                           2006          2005          2006          2005
                                       ------------  ------------  ------------  ------------
<S>                                    <C>           <C>           <C>           <C>
Revenues:
  Product                              $    11,685   $    12,750   $    21,017   $    23,693
  Service                                    5,449         6,106        10,898        11,370
                                       ------------  ------------  ------------  ------------
    Total revenues                          17,134        18,856        31,915        35,063

Cost of sales:
  Product                                    6,998         6,084        12,186        11,452
  Service                                    2,721         2,855         5,360         5,600
                                       ------------  ------------  ------------  ------------
    Total cost of sales                      9,719         8,939        17,546        17,052
                                       ------------  ------------  ------------  ------------

Gross margin                                 7,415         9,917        14,369        18,011

Operating expenses:
  Sales and marketing                        4,133         4,234         8,446         8,362
  Research and development                   4,107         4,900         8,759         9,238
  General and administrative                 2,502         2,379         5,245         4,902
                                       ------------  ------------  ------------  ------------
    Total operating expenses                10,742        11,513        22,450        22,502
                                       ------------  ------------  ------------  ------------

Operating loss                              (3,327)       (1,596)       (8,081)       (4,491)

Interest income                                 84           105           193           219
Interest expense                              (177)          (69)         (251)         (131)
Other income (expense)                        (178)          (18)          (93)          689
                                       ------------  ------------  ------------  ------------

Loss before income taxes                    (3,598)       (1,578)       (8,232)       (3,714)

Provision (benefit) for income taxes           (67)           26           151            73
                                       ------------  ------------  ------------  ------------
Net loss                               $    (3,531)  $    (1,604)  $    (8,383)  $    (3,787)
                                       ============  ============  ============  ============
Net loss per share
    Basic                              $     (0.05)  $     (0.02)  $     (0.12)  $     (0.06)
                                       ============  ============  ============  ============
    Diluted                            $     (0.05)  $     (0.02)  $     (0.12)  $     (0.06)
                                       ============  ============  ============  ============
</TABLE>

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


                                        3
<PAGE>
<TABLE>
<CAPTION>
                        CONCURRENT COMPUTER CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                              (DOLLARS IN THOUSANDS)

                                                             SIX MONTHS ENDED
                                                               DECEMBER 31,
                                                            2006          2005
                                                        ------------  ------------
<S>                                                     <C>           <C>
OPERATING ACTIVITIES
Net loss                                                $    (8,383)  $    (3,787)
Adjustments to reconcile net loss to net
  cash used in operating activities:
  Depreciation and amortization                               2,744         2,404
  Share-based compensation                                      482           371
  Other non-cash expenses                                        42             9
  Changes in operating assets and liabilities:
    Accounts receivable                                         742         1,881
    Inventories                                                 412        (1,527)
    Prepaid expenses and other current assets                  (270)       (1,226)
    Other long-term assets                                      202           254
    Accounts payable and accrued expenses                       506          (313)
    Deferred revenue                                         (1,064)         (671)
    Other long-term liabilities                                 145            55
                                                        ------------  ------------
  Total adjustments to net loss                               3,941         1,237
                                                        ------------  ------------
Net cash used in operating activities                        (4,442)       (2,550)

INVESTING ACTIVITIES
  Capital expenditures                                       (1,478)         (635)
  Cash received from acquisition of Everstream                    -         1,159
                                                        ------------  ------------
Net cash used in investing activities                        (1,478)          524

FINANCING ACTIVITIES
  Proceeds from revolving bank line of credit                 1,077             -
  Repayment of note payable to bank                          (1,583)         (467)
  Proceeds from short-term note payable                         690             -
  Repayment of short term note payable                         (409)            -
  Purchase of treasury stock - net                              (19)          (34)
  Proceeds from sale and issuance of common stock                 5             1
                                                        ------------  ------------
Net cash used in financing activities                          (239)         (500)

Effect of exchange rates on cash and cash equivalents            71          (304)
                                                        ------------  ------------
Decrease in cash and cash equivalents                        (6,088)       (2,830)
Cash and cash equivalents at beginning of period             14,423        19,880
                                                        ------------  ------------
Cash and cash equivalents at end of period              $     8,335   $    17,050
                                                        ============  ============

Cash paid during the period for:
  Interest                                              $       122   $       111
                                                        ============  ============
  Income taxes (net of refunds)                         $        13   $        53
                                                        ============  ============

Non-cash investing activities:
  Shares issued in acquisition of Everstream            $         -   $    14,377
                                                        ============  ============
</TABLE>

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


                                        4
<PAGE>
                         CONCURRENT COMPUTER CORPORATION
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.     OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION

     Concurrent Computer Corporation ("Concurrent") is a supplier of
high-performance computer systems, software, and services.  The computer systems
and software fall under two product lines: on-demand and real-time.

     Concurrent's on-demand product line provides on-demand systems consisting
of hardware and software that provide monitoring and operations management for
on-demand TV and integration services, primarily to residential cable companies
that have upgraded their networks to support interactive, digital services.

     Concurrent's real-time product line provides high-performance, real-time
operating systems and development tools to commercial and government customers
for use with a wide range of applications that benefit from guaranteed,
instantaneous response and repeatability.

     Concurrent provides sales and support from offices and subsidiaries
throughout North America, Europe, Asia, and Australia.

     The condensed, consolidated interim financial statements of Concurrent are
unaudited and reflect all adjustments (consisting of only normal recurring
adjustments) necessary for a fair statement of Concurrent's financial position,
results of operations and cash flows at the dates and for the periods indicated.
These financial statements should be read in conjunction with Concurrent's
Annual Report on Form 10-K for the year ended June 30, 2006.  There have been no
changes to Concurrent's Significant Accounting Policies as disclosed in Note 2
of the consolidated financial statements included in Concurrent's Annual Report
on Form 10-K for the year ended June 30, 2006.  The results reported in these
condensed, consolidated quarterly financial statements should not be regarded as
necessarily indicative of results that may be expected for the entire year.

     Use of Estimates

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

     Recently Issued Accounting Pronouncements

     In September 2006, The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurement" ("SFAS No. 157"). This standard provides guidance for using fair
value to measure assets and liabilities. SFAS No. 157 applies whenever other
standards require (or permit) assets or liabilities to be measured at fair value
but does not expand the use of fair value in any new circumstances. Prior to
SFAS No. 157, the methods for measuring fair value were diverse and
inconsistent, especially for items that are not actively traded. The standard
clarifies that for items that are not actively traded, such as certain kinds of
derivatives, fair value should reflect the price in a transaction with a market
participant, including an adjustment for risk, not just the company's
mark-to-model value. SFAS No. 157 also requires expanded disclosure of the
effect on earnings for items measured using unobservable data. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. Concurrent is
currently evaluating the impact of this statement on its financial statements,
but does not believe that such impact will be material. Concurrent expects to
adopt SFAS No.157 on July 1, 2008, or the beginning of Concurrent's fiscal year
2009.

     In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans -- An Amendment of FASB
Statements No. 87, 88, 106, and 132R." This standard requires an employer to:
(a) recognize in its statement of financial position an asset for a plan's over
funded status or a liability for a plan's under funded status; (b) measure a
plan's assets and its obligations that determine its funded status as of the end
of the employer's fiscal year (with limited exceptions); and (c) recognize
changes in the funded status of a defined benefit postretirement plan in the
year in which the changes occur.


                                        5
<PAGE>
Those changes will be reported in comprehensive income.  The requirement to
recognize the funded status of a benefit plan and the disclosure requirements
are effective as of the end of the fiscal year ending after December 15, 2006,
or as of June 30, 2007 for Concurrent. The requirement to measure plan assets
and benefit obligations as of the date of the employer's fiscal year-end
statement of financial position is effective for fiscal years ending after
December 15, 2008, or for Concurrent's fiscal year ending June 30, 2009.
Concurrent is evaluating the impact of this statement on its financial
statements and believes that such impact may be material.

     In September 2006, the SEC staff revised Staff Accounting Bulletin (SAB)
Topic 1N, "Financial Statements - Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements" (SAB 108). SAB 108 addresses how a registrant should evaluate
whether an error in its financial statements is material. The guidance in SAB
108 is effective for fiscal years ending after November 15, 2006. The adoption
of SAB 108 is not expected to have a material impact on Concurrent's
consolidated financial statements.

2.     REVENUE  RECOGNITION  AND  RELATED  MATTERS

     Concurrent recognizes revenue when persuasive evidence of an arrangement
exists, the system has been shipped, the fee is fixed or determinable and
collectibility of the fee is probable.

     Software and Hardware Sales
     ---------------------------

     On-demand and real-time product revenues are recognized based on the
guidance in American Institute of Certified Public Accountants Statement of
Position ("SOP") 97-2, "Software Revenue Recognition" ("SOP 97-2") and related
amendments, SOP 98-4, "Deferral of the Effective Date of a Provision of SOP
97-2, Software Revenue Recognition" and SOP 98-9, "Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain Transactions."
Concurrent's standard contractual arrangements with its customers generally
include the delivery of a hardware and/or software system, certain professional
services that typically involve installation and training, and ongoing software
and hardware maintenance.   The software component of the arrangement is
considered to be essential to the functionality of the hardware.  Therefore, in
accordance with Emerging Issues Task Force No. 03-5, "Applicability of AICPA
Statement of Position 97-2 to Non-Software Deliverables in an Arrangement
Containing More-Than-Incidental Software," the hardware and the hardware
maintenance components are considered software related and the provisions of SOP
97-2 apply to all elements of the arrangement.  Under multiple element
arrangements, Concurrent allocates revenue to the various elements based on
vendor-specific objective evidence ("VSOE") of fair value.  Concurrent's VSOE of
fair value is determined based on the price charged when the same element is
sold separately.   If VSOE of fair value does not exist for all elements in a
multiple element arrangement, Concurrent recognizes revenue using the residual
method.  Under the residual method, the fair value of the undelivered elements
is deferred and the remaining portion of the arrangement is recognized as
revenue.

     Professional Services
     ---------------------

     Professional services revenue is primarily generated from integration of
third party software interfaces, training, and hardware installation.  These
services are typically completed within 90 days from the receipt of the order.
Under multiple element arrangements, Concurrent allocates revenue to the various
elements based on VSOE of fair value.  Concurrent determines VSOE of fair value
for the services based on the standard rate per hour or fixed fee used when
similar services are sold separately.  Revenues from these services are
recognized when the services are performed.

     In certain instances, Concurrent's customers require significant
customization of both the software and hardware products.  In these situations,
the services are considered essential to the functionality of the software and,
therefore, the revenue from the arrangement, with the exception of maintenance,
is recognized in conformity with Accounting Research Bulletin ("ARB") No. 45,
"Long Term Construction Type Contracts" and SOP 81-1, "Accounting for
Performance of Construction-Type and Certain Production-Type Contracts."
Concurrent records the value of the entire arrangement (excluding maintenance)
as the project progresses based on actual costs incurred compared to the total
costs expected to be incurred through completion.


                                        6
<PAGE>
     Hardware and Software Maintenance
     ---------------------------------

     Concurrent recognizes revenue from maintenance services in accordance with
SOP 97-2.  Depending upon the specific terms of the customer agreement,
Concurrent may include warranty as part of the purchase price.  In accordance
with SOP 97-2 and, depending upon the specific terms of the customer agreement,
Concurrent either accrues the estimated costs to be incurred in performing
maintenance services at the time of revenue recognition and shipment of product,
or Concurrent defers revenue associated with the maintenance services to be
provided during the warranty period based upon the value for which Concurrent
has sold such services separately when they are renewed by existing customers.
For those arrangements in which the warranty period is less than or equal to one
year, Concurrent accrues the estimated costs to be incurred in providing
services.  Therefore, in accordance with paragraph 59 of SOP 97-2, Concurrent
has determined that the warranty fee is part of the initial license fee, the
warranty period is for one year or less, the estimated cost of providing the
services are immaterial, and upgrades and enhancements offered during
maintenance arrangements historically have been and are expected to continue to
be minimal and infrequent.  Actual costs are then charged against the warranty
accrual as they are incurred.  For those arrangements in which the warranty
period is greater than one year, Concurrent defers revenue based upon the value
for which Concurrent has sold such services separately.  This revenue is then
recognized on a straight line basis over the warranty period.

3.     BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

     Basic net income (loss) per share is computed in accordance with SFAS No.
128, "Earnings Per Share" by dividing net income (loss) by the weighted average
number of common shares outstanding during each period.  Diluted net income
(loss) per share is computed by dividing net income (loss) by the weighted
average number of shares including dilutive common share equivalents.  Under the
treasury stock method and for contingently issuable shares, incremental shares
representing the number of additional common shares that would have been
outstanding if the dilutive potential common shares had been issued are included
in the computation.  Diluted earnings per common share assumes exercise of
outstanding stock options and vesting of restricted stock when the effects of
such assumptions are dilutive.  Common share equivalents of 7,980,000 and
7,683,000 for the three months ended December 31, 2006 and 2005, respectively,
were excluded from the calculation as their effect was antidilutive.  Common
share equivalents of 7,931,000 and 7,762,000 for the six months ended December
31, 2006 and 2005, respectively, were excluded from the calculation as their
effect was antidilutive.  Also, as discussed further in Note 4, no contingently
issuable shares under Concurrent's bonus plan would have been issuable as of
December 31, 2006 if this were the end of the contingency period, resulting in
no additional dilution.  The following table presents a reconciliation of the
numerators and denominators of basic and diluted net income (loss) per share for
the periods indicated (dollars and share data in thousands, except per-share
amounts):

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED           SIX MONTHS ENDED
                                                                DECEMBER 31,                DECEMBER 31,
                                                             2006          2005          2006          2005
                                                         ------------  ------------  ------------  ------------
<S>                                                      <C>           <C>           <C>           <C>
Basic and diluted earnings per share (EPS) calculation:
    Net loss                                             $    (3,531)  $    (1,604)  $    (8,383)  $    (3,787)
                                                         ============  ============  ============  ============

Basic weighted average number of shares outstanding           71,600        70,385        71,567        66,578
  Effect of dilutive securities:
    Employee stock options                                         -             -             -             -
                                                         ------------  ------------  ------------  ------------
Diluted weighted average number of shares outstanding         71,600        70,385        71,567        66,578
                                                         ============  ============  ============  ============
Basic EPS                                                $     (0.05)  $     (0.02)  $     (0.12)  $     (0.06)
                                                         ============  ============  ============  ============
Diluted EPS                                              $     (0.05)  $     (0.02)  $     (0.12)  $     (0.06)
                                                         ============  ============  ============  ============
</TABLE>

4.     SHARE-BASED  COMPENSATION

     At December 31, 2006, Concurrent had share-based employee compensation
plans which are described in Note 14 of the consolidated financial statements
included in Concurrent's Annual Report on Form 10-K for the year ended June 30,
2006. Option awards are granted with an exercise price equal to the market price
of Concurrent's stock at the date of grant. Concurrent recognizes stock
compensation expense over the requisite


                                        7
<PAGE>
service period of the individual grantees, which generally equals the vesting
period.  Concurrent recorded $310,000 and $482,000 of share-based compensation
related to stock options and restricted stock in the statement of operations
during the three and six months ended December 31, 2006, respectively.
Concurrent recorded $218,000 and $371,000 of share-based compensation related to
stock options and restricted stock in the statement of operations during the
three and six months ended December 31, 2005, respectively.

     Concurrent uses the Black-Scholes valuation model to estimate the fair
value of each option award on the date of grant. During the six months ended
December 31, 2006, Concurrent granted 1,734,000 stock options that vest over
zero to four years. The weighted-average grant-date fair value of the options
granted under the stock option plans during this period was $1.05. The
weighted-average assumptions used were: expected dividend yield of 0.0%;
risk-free interest rate of 4.6%; expected life of 6 years; and an expected
volatility of 91.5%.

     The dividend yield of zero is based on the fact that Concurrent has never
paid cash dividends and has no present intention to pay cash dividends. Expected
volatility is based on historical volatility of Concurrent's common stock over
the period commensurate with the expected life of the options. The risk-free
interest rate is derived from the average U.S. Treasury rate for the period,
which approximates the rate in effect at the time of grant. The expected life
calculation is based on the observed and expected time to post-vesting exercise
and forfeitures of options by Concurrent's employees.

     Based on historical experience of option pre-vesting cancellations,
Concurrent has assumed an annualized forfeiture rate of 10.0% for unvested
options during the six months ended December 31, 2006.  Under the true-up
provisions of SFAS 123R, Concurrent will record additional expense if the actual
forfeiture rate is lower than estimated, and will record a recovery of prior
expense if the actual forfeiture is higher than estimated.

     A summary of option activity under the plans as of December 31, 2006, and
changes during the six months then ended is presented below:

<TABLE>
<CAPTION>
                                                                       WEIGHTED-
                                                          WEIGHTED-     AVERAGE
                                                           AVERAGE     REMAINING   AGGREGATE
                                                           EXERCISE   CONTRACTUAL  INTRINSIC
                 OPTIONS                       SHARES       PRICE        TERM        VALUE
-------------------------------------------  -----------  ----------  -----------  ----------
<S>                                          <C>          <C>         <C>          <C>
Outstanding as of July 1, 2006                6,127,624   $     4.78
Granted                                       1,734,442         1.36
Exercised                                       (12,497)        0.37
Forfeited or expired                         (1,190,837)        2.71
                                             -----------  ----------
Outstanding as of December 31, 2006           6,658,732   $     4.27         6.21  $  912,000
                                             ===========  ==========  ===========  ==========
Vested and exercisable at December 31, 2006   4,861,706   $     5.32         5.08  $  163,000
                                             ===========  ==========  ===========  ==========
</TABLE>

     Total compensation cost of options granted but not yet vested as of
December 31, 2006, including estimated forfeitures, is $1,605,000, which is
expected to be recognized over the remaining requisite service period of
approximately 3.5 years, on a weighted average basis.

     Concurrent has historically provided annual cash bonuses to certain of its
employees under its Annual Incentive Plan ("AIP").  In accordance with the terms
of the AIP, the amount that is ultimately paid in bonuses is determined based on
company and individual performance relative to pre-established performance
targets.  AIP targets are typically established in the first few months of each
fiscal year, and any bonuses earned have historically been paid fully in cash
the first or second month following the end of the fiscal year.  For fiscal 2007
Concurrent's compensation committee decided that any fiscal 2007 bonus would
consist of Concurrent stock and, in some cases, cash.  During the quarter ending
December 31, 2006, Concurrent issued approximately 468,000 shares of restricted
stock of which some or all may be used to settle AIP bonuses.  In accordance
with the terms of the fiscal 2007 AIP, the number of shares of Concurrent stock
to be paid in settlement of these bonuses in July 2007 is determined based on
the actual AIP bonus earned as well as the fair market value of Concurrent stock
on June 30, 2007.    Once the final AIP bonus amount is determined, any
shortfall between the final AIP bonus amount for an individual employee and the
fair market value of the shares of Concurrent stock at the date the


                                        8
<PAGE>
bonus is settled will be paid in cash.  In no event will an individual employee
receive shares of Concurrent stock that have an aggregate fair market value on
the date of settlement in excess of that individual employee's final AIP bonus
amount.  Due to the unknown settlement structure of this bonus program and the
fact that the value of the eligible employees' final bonus will not be
positively or negatively affected by a change in Concurrent's stock price,
Concurrent, as in prior fiscal years, is accounting for its fiscal 2007 AIP as a
liability plan.  The liability is based on the aggregate payment amount that
Concurrent believes is probable for fiscal 2007 based on expected performance
relative to established targets. As of December 31, 2006, Concurrent believes it
is probable that the aggregate fiscal 2007 AIP bonus payment will be $600,000,
which is being recognized as compensation expense rateably over the one-year
service period ending June 30, 2007.  As of December 31, 2006, approximately
$300,000 of this amount has been accrued and is presented within accounts
payable and accrued expenses in the condensed consolidated balance sheet.  Upon
settlement of the fiscal 2007 AIP bonus, the portion of the recorded bonus
accrual settled with issuance of Concurrent stock will be reclassified to
stockholders' equity at June 30, 2007.  In accordance with SFAS 128, none of the
contingently issuable shares under this plan would have been issuable as of
December 31, 2006, were this the end of the contingency period.

     In addition to the foregoing, during the six months ended December 31,
2006, Concurrent granted 51,000 shares of restricted stock to certain employees
that will vest over a two year period. A summary of the status of Concurrent's
total non-vested shares as of December 31, 2006, and changes during the six
months ended December 31, 2006, is presented below:

<TABLE>
<CAPTION>
                                                  WEIGHTED
                                                   AVERAGE
                                                 GRANT-DATE
            NON-VESTED SHARES          SHARES    FAIR-VALUE
     -------------------------------  ---------  -----------
<S>                                   <C>        <C>
     Non-vested at July 1, 2006        714,656   $      1.93
     Granted                            51,098          1.54
     Vested                            (93,246)         1.87
     Forfeited                        (216,933)         1.85
                                      ---------  -----------
     Non-vested at December 31, 2006   455,575   $      1.94
                                      =========  ===========
</TABLE>

     Total compensation cost of restricted stock awards issued, but not yet
vested as of December 31, 2006 is $524,000, which is expected to be recognized
over the weighted average period of 1.2 years.

5.     INVENTORIES

     Inventories are stated at the lower of cost or market, with cost being
determined by using the first-in, first-out method.  The components of
inventories are as follows (in thousands):

<TABLE>
<CAPTION>
                      DECEMBER 31,   JUNE 30,
                          2006         2006
                      -------------  ---------
<S>                   <C>            <C>
     Raw materials    $       3,830  $   4,405
     Work-in-process          1,240        852
     Finished goods             547        907
                      -------------  ---------
                      $       5,617  $   6,164
                      =============  =========
</TABLE>

     At December 31, 2006 and June 30, 2006, some portion of Concurrent's
inventory was in excess of the current requirements based upon the planned level
of sales for future years.  Accordingly, Concurrent has reduced its gross raw
materials inventory by $1.7 million at December 31, 2006 and $1.6 million at
June 30, 2006 to its estimated net realizable value.


                                        9
<PAGE>
6.     GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill was $15,560,000 as of both December 31, 2006 and June 30, 2006.
Concurrent does not measure assets on a segment basis, and therefore, does not
allocate goodwill on a segment basis.  In accordance with SFAS 142, Concurrent
tests goodwill and trademark for impairment, at least annually.  Concurrent's
annual goodwill and trademark impairment testing date is July 1.

     Other intangible assets as of December 31, 2006 and June 30, 2006 consisted
of the following (in thousands):

<TABLE>
<CAPTION>
                                        DECEMBER 31,    JUNE 30,
                                            2006          2006
                                       --------------  ----------
<S>                                    <C>             <C>
     Cost of amortizable intangibles:
       Purchased technology            $       7,700   $   7,700
       Customer relationships                  1,900       1,900
                                       --------------  ----------
       Total cost of intangibles               9,600       9,600
     Less accumulated amortization:
       Purchased technology                   (2,247)     (1,789)
       Customer relationships                   (210)       (124)
                                       --------------  ----------
       Total accumulated amortization         (2,457)     (1,913)
     Trademark                                 1,100       1,100
                                       --------------  ----------
       Total intangible assets, net    $       8,243   $   8,787
                                       ==============  ==========
</TABLE>

     Amortization expense for the six months ended December 31, 2006 and 2005
was $544,000 and $293,000, respectively.

7.     ACCOUNTS PAYABLE AND ACCRUED EXPENSES

     The  components of accounts payable and accrued expenses are as follows (in
thousands):

<TABLE>
<CAPTION>
                                           DECEMBER 31,   JUNE 30,
                                               2006         2006
                                           -------------  ---------
<S>                                        <C>            <C>
     Accounts payable, trade               $       5,381  $   5,400
     Accrued payroll, vacation, severance
       and other employee expenses                 4,195      4,015
     Warranty accrual                                368        376
     Other accrued expenses                        2,143      1,790
                                           -------------  ---------
                                           $      12,087  $  11,581
                                           =============  =========
</TABLE>

     Concurrent's estimate of warranty obligations is based on historical
experience and expectation of future conditions.  The changes in the warranty
accrual during the six months ended December 31, 2006 were as follows (in
thousands):

<TABLE>
<CAPTION>
<S>                                      <C>
     Balance at June 30, 2006            $376
     Charged to costs and expenses, net    88
     Deductions                           (96)
                                         -----
     Balance at December 31, 2006        $368
                                         =====
</TABLE>


                                       10
<PAGE>
8.     COMPREHENSIVE  LOSS

     Concurrent's total comprehensive loss is as follows (in thousands):

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED          SIX MONTHS ENDED
                                                         DECEMBER 31,               DECEMBER 31,
                                                     2006          2005          2006          2005
                                                 ------------  ------------  ------------  ------------
<S>                                              <C>           <C>           <C>           <C>
     Net loss                                    $    (3,531)  $    (1,604)  $    (8,383)  $    (3,787)

     Other comprehensive gain (loss):
       Foreign currency translation gain (loss)          140          (318)           88          (346)
                                                 ------------  ------------  ------------  ------------

     Total comprehensive loss                    $    (3,391)  $    (1,922)  $    (8,295)  $    (4,133)
                                                 ============  ============  ============  ============
</TABLE>

9.     CONCENTRATION  OF  CREDIT  RISK,  SEGMENT,  AND  GEOGRAPHIC  INFORMATION

     In accordance with SFAS 131, "Disclosure about Segments of an Enterprise
and Related Information," Concurrent operates in two segments, products and
services, as disclosed within the statements of operations.

     The following summarizes the revenues by geographic locations for the three
and six months ended December 31, 2006 (in thousands):

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED         SIX MONTHS ENDED
                                           DECEMBER 31,              DECEMBER 31,
                                        2006         2005         2006         2005
                                     -----------  -----------  -----------  -----------
<S>                                  <C>          <C>          <C>          <C>
     North America                   $    12,039  $    15,047  $    22,452  $    24,470

       Japan                               1,534          829        3,362        2,125
       Other Asia Pacific countries          472          809          925        1,455
                                     -----------  -----------  -----------  -----------
     Asia Pacific                          2,006        1,638        4,287        3,580

     Europe                                3,089        2,171        5,176        7,013
                                     -----------  -----------  -----------  -----------

         Total revenue               $    17,134  $    18,856  $    31,915  $    35,063
                                     ===========  ===========  ===========  ===========
</TABLE>

     In addition, the following summarizes revenues by significant customer
where such revenue equaled or exceeded 10% of total revenues for any one of the
indicated periods:

                    THREE MONTHS ENDED     SIX MONTHS ENDED
                       DECEMBER 31,           DECEMBER 31,
                    2006        2005       2006       2005
                 ----------  ----------  ---------  ---------
     Customer A         10%         12%         14%       11%
     Customer B         10%        <10%        <10%      <10%
     Customer C         10%        <10%        <10%      <10%
     Customer D        <10%         21%        <10%       15%
     Customer E        <10%         15%        <10%       13%

     Concurrent assesses credit risk through ongoing credit evaluations of
customers' financial condition and collateral is generally not required.  At
December 31, 2006, one customer accounted for $1,672,000 or 11% of trade
receivables.  At June 30, 2006, one customer accounted for $3,642,000 or 24% of
trade receivables and a second customer accounted for $2,683,000 or 17% of trade
receivables.  No other customers accounted for 10% or more of trade receivables
as of December 31, 2006 or June 30, 2006.

     Concurrent sometimes purchases product components from a single supplier in
order to obtain the required technology and the most favorable price and
delivery terms.  For the three months ended December 31, 2006, purchases from
each of two suppliers were equal to, or in excess of 10% of Concurrent's total
purchases.


                                       11
<PAGE>
These two suppliers accounted for 38% and 11% of Concurrent's purchases during
the three months ended December 31, 2006.  Also, for the three months ended
December 31, 2005, purchases from two suppliers were equal to, or in excess of,
10% of Concurrent's total purchases.  These two suppliers accounted for 29% and
22% of Concurrent's purchases during the three months ended December 31, 2005.
For the six months ended December 31, 2006, purchases from two suppliers were in
excess of 10% of Concurrent's total purchases.  These two suppliers accounted
for 25% and 17% of Concurrent's purchases during the six months ended December
31, 2006.  Also, for the six months ended December 31, 2005, purchases from two
suppliers were in excess of 10% of Concurrent's total purchases.  These two
suppliers accounted for 23% and 21% of Concurrent's purchases during the six
months ended December 31, 2005.

10.     TERM LOAN, REVOLVING CREDIT FACILITY, AND SHORT-TERM NOTE PAYABLE

     On December 22, 2006, Concurrent entered into an Amended and Restated Loan
and Security Agreement (the "Credit Agreement") with Silicon Valley Bank (the
"Bank").  The Credit Agreement amends and restates Concurrent's then existing
outstanding credit facilities with the Bank, and provides for a $10,000,000
revolving credit line (the "Revolver") with a borrowing base dependent upon
Concurrent's outstanding accounts receivable.  The Credit Agreement requires
Concurrent to pay minimum monthly interest payments of $10,000, regardless of
whether any amounts have been advanced under the Revolver.  The interest amount
will be based upon the amount advanced and the rate varies based upon
Concurrent's accounts receivable and the amount of cash in excess of debt.  The
Credit Agreement also has an early termination fee equal to 100% of the
remaining minimum monthly interest payments.  The outstanding principal amount
plus all accrued but unpaid interest is payable in full at the expiration of the
credit facility.  The Credit Agreement expires on December 22, 2007 unless
Concurrent obtains subsequent equity financing in excess of $10,000,000, in
which case it will expire on December 22, 2008. Concurrent used a portion of the
Revolver to repay its existing term loan as of the date of the Credit Agreement.
Based on the borrowing formula and Concurrent's financial position as of
December 31, 2006, $6,100,000 was available to Concurrent under the Revolver.
As of December 31, 2006, Concurrent had drawn only the $1,077,000 under the
Revolver that was used to repay the previous term loan, resulting in
approximately $5,000,000 of remaining available funds under the Revolver.
Balances under the previous term loan and existing Revolver are as follows (in
thousands):

<TABLE>
<CAPTION>
                                              DECEMBER 31,    JUNE 30,
                                                  2006          2006
                                              -------------  ----------
<S>                                           <C>            <C>
     Revolving bank line of credit            $       1,077  $       -
     Current portion of note payable to bank              -      1,034
                                              -------------  ----------
        Total current bank debt                       1,077      1,034

     Note payable to bank                                 -      1,583
     Less current portion                                 -     (1,034)
                                              -------------  ----------
          Total long-term bank debt                       -        549
                                              -------------  ----------
     Total bank debt                          $       1,077      1,583
                                              =============  ==========
</TABLE>

     Interest on any outstanding amounts under the Revolver would be payable
monthly at the prime rate (8.25% at December 31, 2006) plus 0.50% per annum.

     In addition, the Credit Agreement contains certain financial covenants,
including a required adjusted quick ratio (the ratio of certain highly liquid
assets to current liabilities (less the current portion of deferred revenue)) of
at least 1.25 to 1.00 and a minimum tangible net worth of at least $10,000,000
as of December 31, 2006, and at least $8,000,000 at all times thereafter. The
Credit Agreement also contains customary restrictive covenants concerning
Concurrent's operations. As of December 31, 2006, Concurrent's adjusted quick
ratio was 1.69 to 1.00 and its tangible net worth (defined as total assets (less
goodwill and other intangibles) minus total liabilities) was approximately
$12,100,000. Concurrent was in compliance with all applicable covenants at
December 31, 2006.


                                       12
<PAGE>
11.     RETIREMENT PLANS

     The following table provides a detail of the components of net periodic
benefit cost for the three and six months ended December 31, 2006 and 2005 (in
thousands):

<TABLE>
<CAPTION>
                                          THREE MONTHS ENDED         SIX MONTHS ENDED
                                             DECEMBER 31,              DECEMBER 31,
                                          2006         2005         2006         2005
                                       -----------  -----------  -----------  -----------
<S>                                    <C>          <C>          <C>          <C>
     Service cost                      $        8   $        7   $       16   $       14
     Interest cost                             57           47          113           94
     Expected return on plan assets           (22)         (15)         (44)         (30)
     Amortization of unrecognized net
       transition obligation                    8            8           16           16
                                       -----------  -----------  -----------  -----------
     Net periodic benefit cost         $       51   $       47   $      101   $       94
                                       ===========  ===========  ===========  ===========
</TABLE>

     Concurrent contributed $18,000 and $34,000 to its German subsidiary's
defined benefit plan during the three and six months ended December 31, 2006,
respectively, and expects to make similar contributions during the remaining
quarters of fiscal 2007.  Concurrent contributed $17,000 and $34,000 to its
German subsidiary's defined benefit plan during the three and six months ended
December 31, 2005, respectively.

     Concurrent maintains a retirement savings plan, available to U.S.
employees, which qualifies as a defined contribution plan under Section 401(k)
of the Internal Revenue Code.  During the three months ended December 31, 2006
and 2005, Concurrent contributed $70,000 and $149,000 to this plan,
respectively.  During the six months ended December 31, 2006 and 2005,
Concurrent contributed $154,000 and $329,000 to this plan, respectively.

     Concurrent also maintains a defined contribution plan ("Stakeholder Plan")
for its U.K. based employees.  Concurrent has agreements with certain of its
U.K. based employees to make supplementary contributions to the Stakeholder Plan
over the next three years, contingent upon their continued employment with
Concurrent.  During the three months ended December 31, 2006 and 2005,
Concurrent contributed $149,000 and $54,000 to the Stakeholder Plan,
respectively.  During the six months ended December 31, 2006 and 2005,
Concurrent contributed $336,000 and $161,000 to this plan, respectively.

12.     COMMITMENTS AND CONTINGENCIES

     Concurrent, from time to time, is involved in litigation and disputes
incidental to the conduct of its business.  Concurrent believes that such
pending matters will not have a material adverse effect on its results of
operations or financial condition.

     Concurrent enters into agreements in the ordinary course of business with
customers, resellers, distributors, integrators and suppliers that often require
Concurrent to defend and/or indemnify the other party against intellectual
property infringement claims brought by a third party with respect to
Concurrent's products. For example, Concurrent was notified that certain of its
customers were served with a complaint by Acacia Media Technologies, Corp. (U.S.
District Court, Northern District of California) for allegedly infringing U.S.
Patent Nos. 5,132,992, 5,253,275, 5,550,863, 6,002,720, and 6,144,702 by
providing broadcast video and video-on-demand products.  Concurrent received
similar notice from some of its on-demand customers regarding a lawsuit brought
by U.S.A. Video Inc. (U.S. District Court, Eastern District of Texas, Marshall
Division) alleging infringement of U.S Patent No. 5,130,792.  Some of these
customers have requested indemnification under their customer agreement.
Concurrent continues to review its potential obligations under its
indemnification agreements with these customers, in view of the claims by Acacia
and the indemnity obligations to these customers from other vendors that also
provided systems and services to these customers.  From time to time, Concurrent
also indemnifies customers and business partners for damages, losses and
liabilities they may suffer or incur relating to personal injury, personal
property damage, product liability, and environmental claims relating to the use
of Concurrent's products and services or resulting from the acts or omissions of
Concurrent, its employees, authorized agents or subcontractors.   Concurrent has
not made any significant payments as a result of these indemnification clauses
and, in accordance with FIN No. 45, "Guarantors Accounting and Disclosure


                                       13
<PAGE>
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others," Concurrent has not accrued a liability in relation to these items
because such an amount is immaterial.  The maximum potential amount of future
payments that Concurrent could be required to make is unlimited.

     Pursuant to the terms of the employment agreements with the executive
officers of Concurrent, employment may be terminated by either Concurrent or the
respective executive officer at any time.  In the event the executive officer
voluntarily resigns (except as described below) or is terminated for cause,
compensation under the employment agreement will end.  In the event an agreement
is terminated directly by Concurrent without cause or in certain circumstances
constructively by Concurrent, the terminated employee will receive severance
compensation for a period from 6 to 12 months, depending on the officer, in an
annualized amount equal to the respective employee's base salary then in effect.
At December 31, 2006, the maximum contingent liability under these agreements is
approximately $1.7 million.  Concurrent's employment agreements with certain of
its officers contain certain offset provisions, as defined in their respective
agreements.


                                       14
<PAGE>
ITEM  2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS  OF  OPERATIONS

     The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the Condensed
Consolidated Financial Statements and the related Notes thereto which appear
elsewhere herein.  Except for the historical financial information, many of the
matters discussed in this Item 2 may be considered "forward-looking" statements
that reflect our plans, estimates and beliefs.  Actual results could differ
materially from those discussed in the forward-looking statements.  Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed in the "Cautionary Note regarding Forward-Looking Statements,"
elsewhere herein and in other filings made with the Securities and Exchange
Commission.

OVERVIEW

     During the six months ended December 31, 2006, we used $4.4 million in cash
and cash equivalents from operations, and ended the period with $8.3 million in
cash and cash equivalents. The use of cash from operations during the six months
ended December 31, 2006 was due primarily to operating losses during the six
months ended December 31, 2006. In addition, we had the ability to draw up to an
additional $5.0 million under our revolving line of credit at December 31, 2006.
Based on information currently available, we believe that existing cash balances
combined with availability under our revolving line of credit and anticipated
sales and collections will be sufficient to meet our anticipated liquidity
requirements for the next twelve months. However, we are subject to various
financial covenants under our credit agreement, including a requirement that we
maintain a tangible net worth (defined as total assets (less goodwill and other
intangibles) minus total liabilities) of at least $8 million. As of December 31,
2006, our tangible net worth was $12.1 million. If our tangible net worth drops
below $8 million, we will be in default under our credit agreement. If we
violate the covenant discussed above, and our lender is unwilling to grant
forbearance, waivers or amendments, our lender could accelerate the maturity of
amounts then outstanding under the credit agreement and we would not be able to
borrow under the credit agreement, which would have a material adverse effect on
our liquidity position.

     We expect that we will report a net loss for fiscal 2007 and will continue
to use cash from operating activities during the third quarter.  However, we
believe we are executing on our business plan and expense reduction initiatives
to achieve profitability in the medium term.  In addition, we are currently
reviewing all of our strategic options, which may include raising additional
funds through an offering of stock at a discounted price, further reducing
employee headcount and continuing the business on a more limited scale, and
securing additional financing.  We may not be able to successfully execute on
our business plans to achieve profitability or execute on other strategic
alternatives, which could result in a continuing deterioration of our liquidity
position.  Further deterioration of our liquidity position could result in our
being required to restructure our existing obligations and/or take actions
including, without limitation, seeking bankruptcy protection.  See further
discussions in the "Liquidity and Capital Resources" section of this document.

     During the six months ended December 31, 2006, we took steps to reduce our
operating expenses and our costs of goods and services by terminating
approximately 7% of our employees in July 2006, and terminating an additional 2%
by December 31, 2006.  We will continue to review and realign our cost structure
as needed and this may include investing resources in other key strategic areas.
During the six months ended December 31, 2006, we decreased worldwide headcount
by approximately 14% through terminations and employee attrition.

     Our on-demand business has experienced pricing pressure due to the entrance
of small competitors, a number of which have been recently acquired by
substantially larger companies. The on-demand market has a limited number of
customers, a number of well-financed competitors, and requires significant
research and development expenditures. As a result, competition is significant
within the on-demand business. Our business plan assumes greater demand from our
customers that we believe could materialize in calendar year 2007. In addition,
we believe we are better positioned with new products than in previous periods.
Further, our Everstream subsidiary is continuing to gain subscribers and
introduce new and innovative software products that address the traditional
on-demand market as well as new markets such as satellite, audience measurement,
targeted advertising, and IPTV. We cannot assure the success of any of these
initiatives.


                                       15
<PAGE>
     In addition, a recent trend in the real-time market is the reallocation of
government spending away from some of our traditional real-time projects to
other initiatives. This redeployment of resources has resulted in a number of
opportunities being delayed and, in some cases, terminated.

     Other trends in our business are detailed in our Annual Report on Form 10-K
for the year ended June 30, 2006 filed with the Securities and Exchange
Commission ("SEC") on September 1, 2006.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

     The SEC defines "critical accounting policies" as those that require
application of management's most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effect of matters that
are inherently uncertain and may change in subsequent periods.  For a complete
description of our critical accounting policies, please refer to the
"Application of Critical Accounting Policies" in our most recent Annual Report
on Form 10-K for the year ended June 30, 2006 filed with the SEC on September 1,
2006.

SELECTED OPERATING DATA AS A PERCENTAGE OF TOTAL REVENUE

     The following table sets forth selected operating data as a percentage of
total revenue, unless otherwise indicated, for certain items in our consolidated
statements of operations for the periods indicated.

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED         SIX MONTHS ENDED
                                                       DECEMBER 31,              DECEMBER 31,
                                                    2006         2005         2006         2005
                                                 -----------  -----------  -----------  -----------
<S>                                              <C>          <C>          <C>          <C>
Revenues:
  Product                                              68.2%        67.6%        65.9%        67.6%
  Service                                              31.8         32.4         34.1         32.4
                                                 -----------  -----------  -----------  -----------
    Total revenues                                    100.0        100.0        100.0        100.0

Cost of sales (% of respective sales category):
  Product                                              59.9         47.7         58.0         48.3
  Service                                              49.9         46.8         49.2         49.3
                                                 -----------  -----------  -----------  -----------
    Total cost of sales                                56.7         47.4         55.0         48.6

Gross margin                                           43.3         52.6         45.0         51.4

Operating expenses:
  Sales and marketing                                  24.1         22.5         26.5         23.9
  Research and development                             24.0         26.0         27.4         26.3
  General and administrative                           14.6         12.6         16.4         14.0
                                                 -----------  -----------  -----------  -----------
    Total operating expenses                           62.7         61.1         70.3         64.2
                                                 -----------  -----------  -----------  -----------
Operating loss                                        (19.4)        (8.5)       (25.3)       (12.8)
Interest income (expense) - net                        (0.6)         0.2         (0.2)         0.3
Other income (expense) - net                           (1.0)        (0.1)        (0.3)         1.9
                                                 -----------  -----------  -----------  -----------
Loss before income taxes                              (21.0)        (8.4)       (25.8)       (10.6)
Provision (benefit) for income taxes                   (0.4)         0.1          0.5          0.2
                                                 -----------  -----------  -----------  -----------
Net loss                                             (20.6)%       (8.5)%      (26.3)%      (10.8)%
                                                 ===========  ===========  ===========  ===========
</TABLE>


                                       16
<PAGE>
                              RESULTS OF OPERATIONS

THE  THREE  MONTHS  ENDED  DECEMBER  31, 2006 COMPARED TO THE THREE MONTHS ENDED
DECEMBER  31,  2005

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED
                                             DECEMBER 31,
                                       ------------------------
                                                                      $           %
         (DOLLARS IN THOUSANDS)           2006         2005        CHANGE       CHANGE
                                       -----------  -----------  -----------  ----------
<S>                                    <C>          <C>          <C>          <C>         <C>
Product revenues                       $   11,685   $   12,750   $   (1,065)      (8.4%)
Service revenues                            5,449        6,106         (657)     (10.8%)
                                       -----------  -----------  -----------  ----------
    Total revenues                         17,134       18,856       (1,722)      (9.1%)

Product cost of sales                       6,998        6,084          914        15.0%
Service cost of sales                       2,721        2,855         (134)      (4.7%)
                                       -----------  -----------  -----------  ----------
    Total cost of sales                     9,719        8,939          780         8.7%
                                       -----------  -----------  -----------  ----------

Product gross margin                        4,687        6,666       (1,979)     (29.7%)
Service gross margin                        2,728        3,251         (523)     (16.1%)
                                       -----------  -----------  -----------  ----------
    Total gross margin                      7,415        9,917       (2,502)     (25.2%)

Operating expenses:
  Sales and marketing                       4,133        4,234         (101)      (2.4%)
  Research and development                  4,107        4,900         (793)     (16.2%)
  General and administrative                2,502        2,379          123         5.2%
                                       -----------  -----------  -----------  ----------
    Total operating expenses               10,742       11,513         (771)      (6.7%)
                                       -----------  -----------  -----------  ----------

Operating loss                             (3,327)      (1,596)      (1,731)      108.5%

Interest income (expense) - net               (93)          36         (129)          NM  (1)
Other expense - net                          (178)         (18)        (160)      888.9%
                                       -----------  -----------  -----------  ----------
Loss before income taxes                   (3,598)      (1,578)      (2,020)      128.0%

Provision (benefit) for income taxes          (67)          26          (93)          NM  (1)
                                       -----------  -----------  -----------  ----------
Net loss                               $   (3,531)  $   (1,604)  $   (1,927)      120.1%
                                       ===========  ===========  ===========  ==========
</TABLE>

     (1)  NM  denotes  percentage  is  not  meaningful

     Product Sales.  Total product sales for the three months ended December 31,
2006 were $11.7 million, a decrease of approximately $1.1 million, or 8.4%, from
$12.8 million for the three months ended December 31, 2005.  The decrease in
product sales resulted from the $2.9 million, or 44.1%, decrease in real-time
product sales to $3.7 million in the three months ended December 31, 2006 from
$6.6 million in the three months ended December 31, 2005.  This decrease was due
to significantly lower sales of our first-generation Aegis products to
Lockheed-Martin.

     Partially offsetting the decrease in real-time product sales, on-demand
product sales increased approximately $1.8 million, or 29.6%, to $8.0 million in
the three months ended December 31, 2006 from $6.2 million in the three months
ended December 31, 2005. The increase in on-demand product revenue resulted from
a $1.0 million increase in North American sales, most of which was generated by
an increase in revenue from on-demand system and storage expansion, some of
which included our newest MediaHawk 4500 on-demand system. Additionally,
on-demand system expansions in Europe resulted in an additional $0.9 million of
on-demand product sales during the three months ended December 31, 2006,
compared to the same period in the prior year. Fluctuation in on-demand revenue
is often due to the fact that we have a small base of large customers making
periodic large purchases that account for a significant percentage of revenue.

     Service Revenue. Total service revenue for the three months ended December
31, 2006 was $5.4 million, a decrease of approximately $0.7 million, or 10.8%,
from $6.1 million for the three months ended December 31, 2005. The decrease in
service revenue was almost entirely due to a decrease in service revenue


                                       17
<PAGE>
associated with on-demand products of $0.7 million, or 18.2%, due mainly to
prior year recognition of past-due maintenance revenue primarily related to
on-demand data collection and reporting software.

     Service revenue related to real-time products remained flat during the
three months ended December 31, 2006, compared to the same period of the prior
year. However, we expect service revenue associated with real-time products to
resume its declining trend, primarily due to the expiration of maintenance
contracts as legacy machines are removed from service and, to a lesser extent,
from customers purchasing our new products that produce significantly less
service revenue. We expect this trend of declining service for real-time
products to continue into the foreseeable future.

     Product Gross Margin. Product gross margin was $4.7 million for the three
months ended December 31, 2006, a decrease of approximately $2.0 million, or
29.7%, from $6.7 million for the three months ended December 31, 2005. Product
gross margin as a percentage of product revenue decreased to 40.1% in the three
months ended December 31, 2006 from 52.3% in the three months ended December 31,
2005. Product gross margins, as a percentage of product revenue, decreased
primarily due to a favorable real-time product mix during the prior year
quarter. Product margins during the three months ended December 31, 2005 were
generated by higher margin real-time hardware and software sales of first
generation Aegis products with gross margins that were not offset in the current
year period by sales of second generation Aegis software. In addition, our
margins have been adversely affected by on-demand product pricing pressure.
Continued on-demand product pricing pressure may further impact product gross
margins in the future.

     Service Gross Margin.  The gross margin on service revenue decreased
approximately $0.5 million, or 16.1%, to $2.7 million, or 50.1% of service
revenue in the three months ended December 31, 2006 from $3.2 million, or 53.2%
of service revenue in the three months ended December 31, 2005.  The decrease in
service margins was primarily due to prior year recognition of past-due
maintenance revenues generated by support service revenue for on-demand data
collection and reporting tools.  We expect to maintain similar service margins
as we continue to scale down the infrastructure necessary to fulfill declining
real-time product related contractual obligations.

     Partially offsetting the impact of lower service revenue on service gross
margins, service cost of sales decreased $0.1 million, or 4.7%, during the three
months ended December 31, 2006, compared to the same period in the prior year.
During the three months ended December 31, 2006 we incurred an additional $0.1
million in severance expense, as we have scaled down the infrastructure
necessary to fulfill declining real-time product related contractual
obligations. This incremental severance expense was more than offset by a $0.2
million savings in salaries, benefits and other employee related costs during
the three months ended December 31, 2006, compared to the same period in the
prior year.

     Sales and Marketing. Sales and marketing expenses decreased approximately
$0.1 million, or 2.4% to $4.1 million in the three months ended December 31,
2006 from $4.2 million in the three months ended December 31, 2005. Decreasing
sales and marketing expenses were primarily attributable to the $0.2 million
reduction in salaries, benefits and other employee related costs during the
three months ended December 31, 2006, compared to the same period in the prior
year, resulting from the termination of a part of our sales and marketing
workforce during the previous quarter, in an effort to reduce operating
expenses. Partially offsetting these cost savings, during the three months ended
December 31, 2006 we incurred an additional $0.1 million in depreciation expense
related to our new MediaHawk 4500 on-demand systems that are being used as
demonstration systems for customers.

     Research and Development. Research and development expenses decreased
approximately $0.8 million, or 16.2% to approximately $4.1 million in the three
months ended December 31, 2006 from $4.9 million in the three months ended
December 31, 2005. Decreasing research and development expenses were primarily
attributable to the $0.8 million reduction in salaries, benefits and other
employee related costs during the three months ended December 31, 2006, compared
to the same period in the prior year, resulting from the termination of a part
of our development and engineering workforce during the previous quarter, in an
effort to reduce operating expenses.

     General and Administrative. General and administrative expenses increased
$0.1 million, or 5.2% to $2.5 million in the three months ended December 31,
2006 from $2.4 million in the three months ended


                                       18
<PAGE>
December 31, 2005.  This increase is primarily due to additional stock option
expense and legal fees recorded during the three months ended December 31, 2006,
compared to the same period of the prior year.

     Interest and other expense. During the three months ended December 31,
2006, we recorded $0.1 million of other expense for withholding taxes due on
intercompany interest earned over the past several years by one of our wholly
owned subsidiaries. In addition, we also recorded $0.1 million of interest
expense during the three months ended December 31, 2006 for accrual of interest
on past due withholding tax payments.

     Provision for Income Taxes. We recorded an income tax benefit for our
domestic and foreign subsidiaries of $0.1 million in the three months ended
December 31, 2006. Income tax benefit recorded during the three months ended
December 31, 2006 was primarily attributable to partial reversal of income tax
provision recorded in the prior quarter of the same fiscal year by one of our
foreign locations that has no remaining net operating loss carryforwards. We
recorded income tax expense of $26,000 for our domestic and foreign subsidiaries
in the three months ended December 31, 2005. The provision recorded for the
three months ended December 31, 2005 was primarily attributable to income earned
in foreign locations that cannot be offset by net operating loss carryforwards.

     Net Loss. The net loss for the three months ended December 31, 2006 was
$3.5 million or $0.05 per basic and diluted share compared to a net loss for the
three months ended December 31, 2005 of $1.6 million or $0.02 per basic and
diluted share.


                                       19
<PAGE>
THE SIX MONTHS ENDED DECEMBER 31, 2006 COMPARED TO THE SIX MONTHS ENDED DECEMBER
31, 2005

<TABLE>
<CAPTION>
                                     SIX MONTHS ENDED
                                        DECEMBER 31,          $           %
(DOLLARS IN THOUSANDS)               2006        2005       CHANGE     CHANGE
                                  ----------  ----------  ----------  ---------
<S>                               <C>         <C>         <C>         <C>        <C>
Product revenues                  $  21,017   $  23,693   $  (2,676)    (11.3%)
Service revenues                     10,898      11,370        (472)     (4.2%)
                                  ----------  ----------  ----------  ---------
    Total revenues                   31,915      35,063      (3,148)     (9.0%)

Product cost of sales                12,186      11,452         734        6.4%
Service cost of sales                 5,360       5,600        (240)     (4.3%)
                                  ----------  ----------  ----------  ---------
    Total cost of sales              17,546      17,052         494        2.9%
                                  ----------  ----------  ----------  ---------
Product gross margin                  8,831      12,241      (3,410)    (27.9%)
Service gross margin                  5,538       5,770        (232)     (4.0%)
                                  ----------  ----------  ----------  ---------
    Total gross margin               14,369      18,011      (3,642)    (20.2%)

Operating expenses:
  Sales and marketing                 8,446       8,362          84        1.0%
  Research and development            8,759       9,238        (479)     (5.2%)
  General and administrative          5,245       4,902         343        7.0%
                                  ----------  ----------  ----------  ---------
    Total operating expenses         22,450      22,502         (52)     (0.2%)
                                  ----------  ----------  ----------  ---------

Operating loss                       (8,081)     (4,491)     (3,590)      79.9%

Interest income (expense) - net         (58)         88        (146)          NM (1)
Other income (expense) - net            (93)        689        (782)          NM (1)
                                  ----------  ----------  ----------  ---------

Loss before income taxes             (8,232)     (3,714)     (4,518)     121.6%

Provision for income taxes              151          73          78      106.8%
                                  ----------  ----------  ----------  ---------

Net loss                          $  (8,383)  $  (3,787)  $  (4,596)     121.4%
                                  ==========  ==========  ==========  =========
</TABLE>

     (1) NM denotes percentage is not meaningful

     Product Sales.  Total product sales in the six months ended December 31,
2006 were $21.0 million, a decrease of approximately $2.7 million, or 11.3%,
from $23.7 million in the six months ended December 31, 2005.  The decrease in
product sales resulted from the $4.9 million, or 38.1%, decrease in real-time
product sales to $7.9 million in the six months ended December 31, 2006 from
$12.8 million in the six months ended December 31, 2005.  This decrease was due
to significantly lower sales of our first-generation Aegis products to
Lockheed-Martin.

     Partially offsetting the decrease in real-time product sales, on-demand
product sales increased approximately $2.2 million, or 20.1%, to $13.1 million
in the six months ended December 31, 2006 from $10.9 million in the six months
ended December 31, 2005. The increase in on-demand product revenue was driven by
a $3.0 million increase in North American sales, most of which was generated by
an increase in revenue from on-demand system and storage expansion, some of
which included our newest MediaHawk 4500 on-demand system. Additionally, revenue
from our on-demand data collection and reporting software increased North
American revenue by approximately $1.0 million during the six months ended
December 31, 2006, compared to the same period in the prior year. Partially
offsetting the increase in North American on-demand product revenue, European
on-demand product revenue during the six months ended December 31, 2006
decreased $0.8 million, compared to the six months ended December 31, 2005. The
decrease in European on-demand product revenue resulted from significant initial
site deployments of on-demand systems in the prior fiscal year. During the six
months ended December 31, 2006, European on-demand product revenue was driven by
expansions of existing sites, which generated less sales volume than initial
deployments. Fluctuation in on-demand revenue is often due to the fact that we
have a small base of large customers making periodic large purchases that
account for a significant percentage of revenue.


                                       20
<PAGE>
     Service Revenue. Total service revenue for the six months ended December
31, 2006 was $10.9 million, a decrease of approximately $0.5 million, or 4.2%,
from $11.4 million for the six months ended December 31, 2005. Service revenue
associated with on-demand products decreased $0.3 million, or 5.0%, due to prior
year recognition of past-due maintenance revenue primarily related to on-demand
data collection and reporting software.

     Service revenue related to real-time products decreased by $0.2 million, or
3.1%, during the six months ended December 31, 2006, compared to the same period
in the prior year. Service revenue associated with real-time products continued
to decline primarily due to the expiration of maintenance contracts as legacy
machines were removed from service and, to a lesser extent, from customers
purchasing our new products that produce significantly less service revenue. We
expect this trend of declining service for real-time products to continue into
the foreseeable future.

     Product Gross Margin. Product gross margin was $8.8 million for the six
months ended December 31, 2006, a decrease of approximately $3.4 million, or
27.9%, from $12.2 million for the six months ended December 31, 2005. Product
gross margin as a percentage of product revenue decreased to 42.0% in the six
months ended December 31, 2006 from 51.7% in the six months ended December 31,
2005. Product gross margins, as a percentage of product revenue, decreased
primarily due to a favorable real-time product mix during the prior year period.
Product margins during the six months ended December 31, 2005 were generated by
higher margin real-time hardware and software sales of first generation Aegis
products with gross margins that were not offset in the current year period by
sales of second generation Aegis software. In addition, our margins have been
adversely affected by on-demand product pricing pressure. Also, our margins were
further impacted by an additional $0.2 million of amortization expense incurred
during the six months ended December 31, 2006 related to acquired Everstream
technology.

     Service Gross Margin.  The gross margin on service revenue decreased
approximately $0.2 million, or 4.0%, to approximately $5.5 million, or 50.8% of
service revenue in the six months ended December 31, 2006 from approximately
$5.8 million, or 50.7% of service revenue in the six months ended December 31,
2005.  The decrease in service margins was primarily due to recognition of prior
year past-due maintenance revenues generated by support service revenue for
on-demand data collection and reporting tools.  We expect to maintain similar
service margins as we continue to scale down the infrastructure necessary to
fulfill declining real-time product related contractual obligations.

     Partially offsetting the impact of lower service revenue on service gross
margins, service cost of sales decreased $0.2 million, or 4.3%, during the six
months ended December 31, 2006, compared to the same period in the prior year.
During the six months ended December 31, 2006 we incurred an additional $0.3
million in severance expense, as we have scaled down the infrastructure
necessary to fulfill declining real-time product related contractual
obligations. This incremental severance expense was more than offset by a $0.4
million savings in salaries, benefits and other employee related costs during
the six months ended December 31, 2006, compared to the same period in the prior
year.

     Sales and Marketing. Sales and marketing expenses remained flat at $8.4
million for both the six months ended December 31, 2006 and 2005, respectively.
We incurred $0.4 million less in salaries, benefits and other employee related
costs during the six months ended December 31, 2006, compared to the same period
in the prior year, resulting from the termination of a part of our sales and
marketing workforce during the beginning of our fiscal year 2007, in an effort
to reduce operating expenses. Offsetting these cost savings, we incurred an
additional $0.3 million in severance as a result of these terminations, compared
to the same period of the prior year. We also incurred an additional $0.1
million in depreciation expense related to our new MediaHawk 4500 on-demand
systems that are being used as demonstration systems for customers during the
six months ended December 31, 2006, compared to the same period of the prior
year.

     Research and Development. Research and development expenses decreased
approximately $0.5 million, or 5.2% to approximately $8.8 million in the six
months ended December 31, 2006 from approximately $9.2 million in the six months
ended December 31, 2005. Decreasing research and development expenses were
primarily attributable to the $0.7 million reduction in salaries, benefits and
other employee related costs during the six months ended December 31, 2006,
compared to the same period in the prior year, resulting from the termination of
a part of our development and engineering workforce during the beginning of our
fiscal year 2007


                                       21
<PAGE>
in an effort to reduce operating expenses.    Partially offsetting these cost
savings, we incurred an additional $0.1 million in severance as a result of
these terminations, compared to the same period of the prior year.

     General and Administrative. General and administrative expenses increased
$0.3 million, or 7.0% to $5.2 million in the six months ended December 31, 2006
from $4.9 million in the six months ended December 31, 2005. During the six
months ended December 31, 2006, our chief operating officer was terminated and,
pursuant to his employment agreement, the chief operating officer will receive
one year of severance equal to the value of his salary and benefits. This action
resulted in approximately $0.4 million of additional severance expense during
the six months ended December 31, 2006. Partially offsetting this severance
charge, during the six months ended December 31, 2006 we reversed approximately
$0.1 million of bad debt provision, previously reserved for customer accounts
collected during the current fiscal year.

     Other income(expense) and interest expense. During the six months ended
December 31, 2006, we recorded $0.1 million of other expense for withholding
taxes due on intercompany interest earned over the past several years by one of
our wholly owned subsidiaries. In addition, we also recorded $0.1 million of
interest expense during the six months ended December 31, 2006 for accrual of
interest on past due withholding tax payments.

     During the six months ended December 31, 2005, we received a $0.7 million
refund from the Australian Tax Authority. This refund related to previous
withholding tax payments, over many years, on intercompany charges with our
Australian subsidiary. These charges and the related withholding tax refund are
unrelated to the withholding tax accrued during the six months ended December
31, 2006. Expense associated with previous payments was originally recorded to
"other expense" within our Consolidated Statement of Operations; therefore, we
have recorded the refund to "other income" within our Consolidated Statement of
Operations.

     Provision for Income Taxes.  We recorded income tax expense for our
domestic and foreign subsidiaries of $0.2 million in the six months ended
December 31, 2006.  We recorded income tax expense of $0.1 million for our
domestic and foreign subsidiaries in the six months ended December 31, 2005.
Income tax expense for the six months ended December 31, 2006 and 2005 was
primarily attributable to income earned in foreign locations that cannot be
offset by net operating loss carryforwards.

     Net Loss. The net loss for the six months ended December 31, 2006 was $8.4
million or $0.12 per basic and diluted share compared to a net loss for the six
months ended December 31, 2005 of $3.8 million or $0.06 per basic and diluted
share.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Our liquidity is dependent on many factors, including sales volume,
operating profit and the efficiency of asset use and turnover.  Our future
liquidity will be affected by, among other things:

     -    the rate of growth or decline, if any, of on-demand market
          expansions and the pace at which domestic and international cable
          companies and telephone companies implement on-demand technology;

     -    the rate of growth, if any, of deployment of our real-time
          operating systems and tools;

     -    the actual versus anticipated decline in revenue from maintenance
          and product sales of real-time proprietary systems;

     -    ongoing cost control actions and expenses, including capital
          expenditures;

     -    the margins on our product lines;

     -    our ability to leverage the potential of Everstream;

     -    our ability to raise additional capital, if necessary;

     -    our ability to obtain additional bank financing, if necessary;

     -    our ability to meet the covenants contained in our Credit
          Agreement;

     -    timing of product shipments, which typically occur during the
          last month of the quarter;


                                       22
<PAGE>
     -    the percentage of sales derived from outside the United States
          where there are generally longer accounts receivable collection
          cycles; and

     -    the number of countries in which we operate, which may require
          maintenance of minimum cash levels in each country and, in certain
          cases, may restrict the repatriation of cash, such as cash held on
          deposit to secure office leases.

Uses and Sources of Cash

     We used $4.4 million of cash from operating activities during the six
months ended December 31, 2006 compared to using $2.6 million of cash during the
same period of the prior year. The use of cash from operations was primarily due
to operating losses in the six months ended December 31, 2006. Prior period cash
usage resulted from both operating losses and changes in prepaid assets.

     We invested $1.5 million in property, plant and equipment during the six
months ended December 31, 2006 compared to $0.6 million during the six months
ended December 31, 2005. Capital additions during each of these periods related
primarily to product development and testing equipment. During the six months
ended December 31, 2006, we also incurred capital expenditures for our new
MediaHawk 4500 on-demand systems that are being used as demonstration systems
for customers. We expect to continue at a similar level of capital additions
during the remainder of this fiscal year.

     On December 22, 2006, we entered into an Amended and Restated Loan and
Security Agreement (the "Credit Agreement") with Silicon Valley Bank (the
"Bank"). The Credit Agreement amends and restates our then existing outstanding
credit facilities with the Bank, and provides for a $10 million revolving credit
line (the "Revolver") with a borrowing base dependent upon our outstanding
accounts receivable. The Credit Agreement requires us to pay minimum monthly
interest payments of $10,000, regardless of whether any amounts have been
advanced under the Revolver. The interest amount will be based upon the amount
advanced and the rate varies based upon our accounts receivable and the amount
of cash in excess of debt. The interest rate on the Revolver was 8.75% as of
December 31, 2006. The Credit Agreement also has an early termination fee equal
to 100% of the remaining minimum monthly interest payments. The outstanding
principal amount plus all accrued but unpaid interest is payable in full at the
expiration of the credit facility. The Credit Agreement expires on December 22,
2007 unless we obtain subsequent equity financing in excess of $10 million, in
which case it will expire on December 22, 2008. We used a portion of the
Revolver to repay our existing term loan as of the date of the Credit Agreement.
Based on the borrowing formula and our financial position as of December 31,
2006, $6.1 million was available to us under the Revolver. As of December 31,
2006, we had drawn $1.1 million under the Revolver that was used to repay our
previous term loan, resulting in $5.0 million of remaining available funds under
the Revolver.

     In addition, the Credit Agreement contains certain financial covenants,
including a required adjusted quick ratio (the ratio of certain highly liquid
assets to current liabilities (less the current portion of deferred revenue)) of
at least 1.25 to 1.00 and a minimum tangible net worth of at least $10 million,
as of December 31, 2006, and at least $8 million at all times thereafter. The
Credit Agreement also contains customary restrictive covenants concerning our
operations. See Exhibit 10.1, "Amended and Restated Loan and Security Agreement"
for additional information. As of December 31, 2006, our adjusted quick ratio
was 1.69 to 1.00 and our tangible net worth was $12.1 million. As of December
31, 2006, we were in compliance with these covenants. If we violate the
covenants discussed above, and our lender is unwilling to grant forbearance,
waivers or amendments, our lender could accelerate the maturity of amounts then
outstanding under the credit agreement and we would not be able to borrow under
the credit agreement, which would have a material adverse effect on our
liquidity position.

     On August 1, 2006, we entered into an unsecured short-term note payable, to
finance insurance premiums, totaling $690,000. The note payable matures on April
25, 2007 and bears interest at 6.80% with $71,000 monthly payments of principal
and interest. As of December 31, 2006, the balance of this short-term note
payable was $281,000.

     At December 31, 2006, we had working capital of $10.1 million and had no
material commitments for capital expenditures compared to working capital of
$17.4 million at June 30, 2006. Based on the information currently available we
believe that existing cash balances combined with a credit facility and
anticipated sales and


                                       23
<PAGE>
collections will be sufficient to meet our liquidity requirements for the next
twelve months.  However, unless and until our revenue increases and stabilizes,
it is likely that we will continue to use cash from operating activities.  If we
continue to use cash from operating activities, we may be forced to take certain
measures to continue the business, such as raising additional funds through an
offering of stock at a discounted price, further employee reductions,
re-capitalization or reorganization transactions at undesirable prices, sale
transactions, incurring significant debt at above market rates, or seeking
bankruptcy protection.  We expect that we will report a net loss for fiscal 2007
and will continue to use cash from operating activities.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

     Our contractual obligations and commercial commitments are disclosed in our
Annual Report on Form 10-K for the year ended June 30, 2006. On December 22,
2006, we entered into a Credit Agreement with Silicon Valley Bank that amends
and restates our then existing outstanding credit facilities. See the "Liquidity
and Capital Resources" section of Item 2, "Management's Discussion and Analysis
of Financial Condition and Results of Operations" for additional information.
There have been no other material changes to our contractual obligations and
commercial commitments during the six months ended December 31, 2006.

     CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Certain statements made or incorporated by reference in this release may
constitute "forward-looking statements" within the meaning of the federal
securities laws.  When used or incorporated by reference in this release, the
words "believes," "expects," "estimates," "anticipates," and similar
expressions, are intended to identify forward-looking statements.  Statements
regarding future events and developments, our future performance, market share,
and new market growth, as well as our expectations, beliefs, plans, estimates,
or projections relating to the future, are forward-looking statements within the
meaning of these laws.  Examples of our forward-looking statements in this
report include, but are not limited to, our pricing trends, our expected cash
position, our expectations of market share and growth, the impact of interest
rate changes and fluctuation in currency exchange rates, our sufficiency of
cash, our ability to remove any transfer limitations on our patents, the impact
of litigation, and our trend of declining real-time service revenue.  These
statements are based on beliefs and assumptions of Concurrent's management,
which are based on currently available information.  All forward-looking
statements are subject to certain risks and uncertainties that could cause
actual events to differ materially from those projected.  The risks and
uncertainties which could affect our financial condition or results of
operations include, without limitation: our ability to keep our customers
satisfied; delays or cancellations of customer orders; changes in product
demand; economic conditions; our ability to satisfy the financial covenants in
our Credit Agreement; various inventory risks due to changes in market
conditions; uncertainties relating to the development and ownership of
intellectual property; uncertainties relating to our ability and the ability of
other companies to enforce their intellectual property rights; the pricing and
availability of equipment, materials and inventories; the concentration of our
customers; failure to effectively manage growth; delays in testing and
introductions of new products;  rapid technology changes; system errors or
failures; reliance on a limited number of suppliers and failure of components
provided by those suppliers; uncertainties associated with international
business activities, including foreign regulations, trade controls, taxes, and
currency fluctuations; the impact of  competition on the pricing of VOD
products; failure to effectively service the installed base; the entry of new
well-capitalized competitors into our markets; the success of new on-demand and
real-time products; financing for working capital needs; the availability of
Linux software in light of issues raised by SCO Group; the success of our
relationships with Alcatel and Novell; capital spending patterns by a limited
customer base; and privacy concerns over data collection.

     Other important risk factors are discussed in Item 1A, "Risk Factors" of
this Form 10Q for the six months ended December 31, 2006, and our Annual Report
on Form 10-K for the fiscal year ended June 30, 2006.

Our forward-looking statements are based on current expectations and speak only
as of the date of such statements.  We undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result of future
events, new information or otherwise.


                                       24
<PAGE>
ITEM  3.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     We are exposed to market risk from changes in interest rates and foreign
currency exchange rates.  We are exposed to the impact of interest rate changes
on our short-term cash investments and bank loans.  Short-term cash investments
are backed by U.S. government obligations, and other investments in institutions
with the highest credit ratings, all of which have maturities of three months or
less.  These short-term investments carry a degree of interest rate risk.  Bank
loans include a one-year, variable rate Revolver.  We believe that the impact of
a 10% increase or decrease in interest rates would not be material to our
investment income and interest expense from bank loans.

     We conduct business in the United States and around the world. Our most
significant foreign currency transaction exposure relates to the United Kingdom,
those Western European countries that use the Euro as a common currency,
Australia, and Japan. We do not hedge against fluctuations in exchange rates and
believe that a 10% upward or downward fluctuation in foreign currency exchange
rates relative to the United States dollar would not have a material impact on
future earnings, fair values, or cash flows.

ITEM  4.     CONTROLS  AND  PROCEDURES

     As required by Securities and Exchange Commission rules, we have evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report.  This evaluation
was carried out under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer.  Based on this evaluation, these officers have concluded that the
design and operation of our disclosure controls and procedures are effective.
There were no significant changes to our internal control over financial
reporting during the period covered by this report that materially affected, or
are reasonably likely to materially affect, our internal controls over financial
reporting.

     Disclosure controls and procedures are our controls and other procedures
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act are recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms.  Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act are accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure.

PART II     OTHER INFORMATION

ITEM  1.     LEGAL  PROCEEDINGS

     From time to time, we may be involved in litigation relating to claims
arising out of our ordinary course of business.  We are not presently involved
in any material litigation, but have the following matters pending:

     -    Vicor, Inc. v. Concurrent Computer Corporation, Essex Superior
          ----------------------------------------------
          Court, Massachusetts, Civil Action No. C5-1437A. This suit was filed
          August 18, 2005 requesting declaratory relief regarding a contractual
          dispute between the parties. On March 8, 2006, after briefing and
          arguments, the case was dismissed for resolution by arbitration. Vicor
          has appealed the matter and unsuccessfully moved to stay the
          arbitration (Case No. 32 181 Y 00738 05) that is proceeding in
          Florida.

ITEM 1A.     RISK FACTORS

CERTAIN PATENTS LICENSED TO CONCURRENT MAY NOT PASS TO AN ACQUIRER.

     We have a license to a significant portfolio of video streaming patents
that was originally granted to us by Thirdspace Living Ltd. ("Thirdspace") and
subsequently regranted to us by Alcatel when Alcatel purchased the portfolio
from Thirdspace. The portfolio includes U.S. Patent Nos. 5,623,595 and 5,805,804
("Subject Patents"). Although our license from Alcatel does not, on its face,
terminate upon a merger, acquisition, or change in control of Concurrent, a
November 2000 agreement regarding the Subject Patents and entered into by
Thirdspace may have the effect of terminating our license to the Subject Patents
upon a merger or acquisition that results in a change in control of Concurrent.
This license limitation does not affect current operations, but upon


                                       25
<PAGE>
change of control the successor could face a lawsuit for selling on-demand
products. We currently are working to eliminate or mitigate the impact of this
limitation, but we cannot assure that we will be successful in altering this
limitation on favorable terms, or at all. This limitation may make it more
difficult to pursue, and may result in less favorable terms for us in connection
with, a sale of the company, a sale of one of our businesses or any other
business combination transaction should such an opportunity arise.

WE HAVE SUBSTANTIAL LIQUIDITY NEEDS AND FACE SIGNIFICANT LIQUIDITY PRESSURE.

     At December 31, 2006, our cash and cash equivalents were $8.3 million. Our
Credit Agreement contains certain financial covenants, including a requirement
that we maintain a minimum tangible net worth of at least $8 million. As of
December 31, 2006, our tangible net worth was $12.1 million. If we continue to
use cash from operating activities and do not obtain equity financing we may
violate this covenant. If we violate the minimum tangible net worth covenant in
our Credit Agreement, and our lender is unwilling to grant forbearance, waivers
or amendments, our lender could accelerate the maturity of amounts then
outstanding under the Credit Agreement, which would have a material adverse
effect on our liquidity position. In such a case we may be forced to take
certain measures to continue the business, such as raising additional funds
through an offering of stock at a discounted price, further employee reductions,
re-capitalization or reorganization transactions at undesirable prices, sale
transactions, incurring debt at above market rates, or seeking bankruptcy
protection.

     Other important risk factors are discussed in Item 1A, "Risk Factors" of
our Annual Report on Form 10-K for the fiscal year ended June 30, 2006.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Concurrent's Annual Meeting of Stockholders was held on October 26, 2006.
The results of the voting were as follows:

     -    The following  persons  were  elected  as  directors  to  serve  until
          the  next  annual  meeting  of  stockholders: Alex B. Best (57,776,676
          votes  for,  9,722,209  votes  withheld), Charles Blackmon (59,107,349
          votes  for,  8,391,536 votes withheld), Larry L. Enterline (60,862,498
          votes  for,  6,636,387  votes  withheld), C. Shelton James (60,789,487
          votes  for, 6,709,398 votes withheld), Steve G. Nussrallah (57,102,077
          votes  for,  10,396,808 votes withheld), and T. Gary Trimm (61,241,142
          votes  for,  6,257,743  votes  withheld).

     -    The selection  by  the  Audit  Committee  of  Deloitte & Touche LLP as
          Concurrent's  independent registered public accountants for the fiscal
          year  ending June 30, 2007 was ratified (61,873,424 votes for, 424,722
          votes  against,  5,200,739  votes  abstained).

     -    The approval  of  amendments  to  the  Concurrent Computer Corporation
          2001  Stock Option Plan to increase the number of shares authorized by
          4,000,000  from 7,000,000 to 11,000,000, to add non-employee directors
          as  plan  participants  and  delete  the provision providing an annual
          grant  to  non-employee  directors  (19,891,153  votes for, 14,629,201
          votes  against,  5,726,764  votes  abstained).


ITEM  6.     EXHIBITS

3.1       Restated Certificate of Incorporation of the Registrant
          (incorporated by reference to the Registrant's Registration Statement
          on Form S-2 (No. 33-62440)).

3.2       Amended and Restated Bylaws of the Registrant (incorporated by
          reference to the Registrant's Quarterly Report on Form 10-Q for the
          period ended March 31, 2003).

3.3       Certificate of Correction to Restated Certificate of
          Incorporation of the Registrant (incorporated by reference to the
          Registrant's Annual Report on Form 10-K for the fiscal year ended June
          30, 2002).

3.4       Amended Certificate of Designations of Series A Participating
          Cumulative Preferred Stock (incorporated by reference to the Form
          8-A/A, dated August 9, 2002).

3.5       Amendment to Amended Certificate of Designations of Series A
          Participating Cumulative Preferred Stock (incorporated by reference to
          the Form 8-A/A, dated August 9, 2002).


                                       26
<PAGE>
4.1       Form of Common Stock Certificate (incorporated by reference to
          the Registrant's Quarterly Report on Form 10-Q for the period ended
          March 31, 2003).

4.2       Form of Rights Certificate (incorporated by reference to the
          Registrant's Current Report on Form 8-K/A filed on August 12, 2002).

4.3       Amended and Restated Rights Agreement dated as of August 7, 2002
          between the Registrant and American Stock Transfer & Trust Company, as
          Rights Agent (incorporated by reference to the Registrant's Current
          Report on Form 8-K/A filed on August 12, 2002).

10.1**    Amended and Restated Loan and Security Agreement.

11.1*     Statement Regarding Computation of Per Share Earnings.

31.1**    Certification of Chief Executive Officer, pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.

31.2**    Certification of Chief Financial Officer, pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.

32.1**    Certification of Chief Executive Officer, pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

32.2**    Certification of Chief Financial Officer, pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

*    Data required by Statement of Financial Accounting Standards No. 128,
     "Earnings per Share," is provided in the Notes to the condensed
     consolidated financial statements in this report.

**   Filed herewith.


                                       27
<PAGE>
SIGNATURES

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


Date:  February 9, 2007                 CONCURRENT COMPUTER CORPORATION


                                        By:   /s/ Gregory S. Wilson
                                            -----------------------
                                        Gregory S. Wilson
                                        Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)


                                       28
<PAGE>
                                  EXHIBIT INDEX
                                  -------------


3.1       Restated Certificate of Incorporation of the Registrant
          (incorporated by reference to the Registrant's Registration Statement
          on Form S-2 (No. 33-62440)).

3.2       Amended and Restated Bylaws of the Registrant (incorporated by
          reference to the Registrant's Quarterly Report on Form 10-Q for the
          period ended March 31, 2003).

3.3       Certificate of Correction to Restated Certificate of
          Incorporation of the Registrant (incorporated by reference to the
          Registrant's Annual Report on Form 10-K for the fiscal year ended June
          30, 2002).

3.4       Amended Certificate of Designations of Series A Participating
          Cumulative Preferred Stock (incorporated by reference to the Form
          8-A/A, dated August 9, 2002).

3.5       Amendment to Amended Certificate of Designations of Series A
          Participating Cumulative Preferred Stock (incorporated by reference to
          the Form 8-A/A, dated August 9, 2002).

4.1       Form of Common Stock Certificate (incorporated by reference to
          the Registrant's Quarterly Report on Form 10-Q for the period ended
          March 31, 2003).

4.2       Form of Rights Certificate (incorporated by reference to the
          Registrant's Current Report on Form 8-K/A filed on August 12, 2002).

4.3       Amended and Restated Rights Agreement dated as of August 7, 2002
          between the Registrant and American Stock Transfer & Trust Company, as
          Rights Agent (incorporated by reference to the Registrant's Current
          Report on Form 8-K/A filed on August 12, 2002).

10.1**    Amended and Restated Loan and Security Agreement.

11.1*     Statement Regarding Computation of Per Share Earnings.

31.1**    Certification of Chief Executive Officer, pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.

31.2**    Certification of Chief Financial Officer, pursuant to Section
          302 of the Sarbanes-Oxley Act of 2002.

32.1**    Certification of Chief Executive Officer, pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

32.2**    Certification of Chief Financial Officer, pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

          * Data required by Statement of Financial Accounting Standards No.
          128, "Earnings per Share," is provided in the Notes to the condensed
          consolidated financial statements in this report.

          ** Filed herewith.


                                       29