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 March 31, 2001

                                       or

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

   For the transition period from ____________ to ______________


                         Commission File Number: 0-31093

                             VINA TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                  77-0432782
(State or other jurisdiction of           (IRS Employer Identification No.)
 incorporation or organization)


                      39745 Eureka Drive, Newark, CA 94560
                    (Address of principal executive offices)

                                 (510) 492-0800
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
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

The number of outstanding shares of the registrant's  Common Stock,  $0.0001 par
value, was 36,825,676 as of March 31, 2001.


<PAGE>


                             VINA TECHNOLOGIES, INC.

                                      INDEX
<TABLE>

<CAPTION>

                                                                                                  Page
                                                                                                  ----

PART I:  FINANCIAL INFORMATION

<S>     <C>                                                                                        <C>
   Item 1 Condensed Consolidated Financial Statements (Unaudited)...................................3

          Condensed Consolidated Balance Sheets as of December 31, 2000 and March 31, 2001 .........3


          Condensed Consolidated Statements of Operations for the three months ended March 31,
          2000 and 2001 ............................................................................4


          Condensed Consolidated Statements of Cash Flows for the three months ended March 31,
          2000 and 2001 ............................................................................5


          Notes to Condensed Consolidated Financial Statements......................................6


   Item 2  Management's Discussion and Analysis of Financial Condition and Results of Operations....9

   Item 3  Quantitative and Qualitative Disclosures About Market Risks.............................20

PART II:  OTHER INFORMATION

   Item 1  Legal Proceedings.......................................................................21


   Item 2  Changes in Securities and Use of Proceeds...............................................21


   Item 6  Exhibits and Reports on Form 8-K........................................................21

   Signatures......................................................................................22


</TABLE>


<PAGE>


PART I:  FINANCIAL INFORMATION
Item 1   Condensed Consolidated Financial Statements

                             VINA TECHNOLOGIES, INC.
                      Condensed Consolidated Balance Sheets
               (in thousands, except share and per share amounts)
                                   (unaudited)
<TABLE>

<CAPTION>


                                                                   December 31,  March 31,
                                                                       2000        2001
                                                                       ----        ----
ASSETS
Current assets:
<S>                                                                <C>          <C>
  Cash and cash equivalents .....................................  $   7,740    $  10,845
  Short-term investments ........................................     36,759       24,625
  Accounts receivable, net ......................................      5,243        7,133
  Inventories ...................................................      1,973        1,687
  Prepaid expenses and other ....................................      2,649        1,910
                                                                   ---------    ---------
      Total current assets ......................................     54,364       46,200
Property and equipment, net .....................................      4,096        4,967
Other assets ....................................................         76          211
Acquired intangibles, net .......................................         --        4,804
Goodwill, net ...................................................         --       34,680
                                                                   ---------    ---------
      Total assets ..............................................  $  58,536    $  90,862
                                                                   =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable ..............................................  $   8,536    $   9,230
  Accrued compensation and related benefits .....................      2,588        1,523
  Accrued warranty ..............................................        686          718
  Other current liabilities .....................................      1,897        3,999
                                                                   ---------    ---------
      Total current liabilities .................................     13,707       15,470
Deferred income taxes ...........................................         --        1,966
                                                                   ---------    ---------
    Total Liabilities ...........................................     13,707       17,436
                                                                   ---------    ---------

Stockholders' equity:
  Convertible preferred stock; $0.0001 par value; 5,000,000
    shares authorized:
    none issued and outstanding ..................................        --           --
  Common stock; $0.0001 par value; 35,000,000 shares
    authorized;
    shares outstanding: 2000, 32,546,845; 2001, 36,825,676.......          3            4
   Additional paid-in capital ...................................    144,708      185,769
  Deferred stock compensation ...................................    (26,386)     (20,327)
  Accumulated other comprehensive income ........................         48          100
  Accumulated deficit ...........................................    (73,544)     (92,120)
                                                                   ---------    ---------
      Total stockholders' equity ................................     44,829       73,426
                                                                   ---------    ---------
      Total liabilities and stockholders' equity ................  $  58,536    $  90,862
                                                                   =========    =========
</TABLE>

            See notes to condensed consolidated financial statements



<PAGE>


                             VINA TECHNOLOGIES, INC.
                 Condensed Consolidated Statements of Operations
                    (in thousands, except per share amounts)
                                   (unaudited)
<TABLE>

<CAPTION>

                                                                       Three Months Ended
                                                                          March 31,
                                                                        2000         2001
                                                                        ----         ----

<S>                                                                   <C>          <C>
Net revenue ......................................................... $  5,187     $ 11,029
Cost of revenue
  (excluding stock-based compensation) ...............................   3,239        8,246
                                                                      --------     --------
Gross profit
  (excluding stock-based compensation) ...............................   1,948        2,783
                                                                      --------     --------
Costs and expenses:
 Research and development
  (excluding stock-based compensation) ...............................   2,505        4,705
 Selling, general and administrative
  (excluding stock-based compensation) ...............................   3,721        6,511
 Stock-based compensation* ...........................................   3,653        4,844
 In-process research and development .................................      --        5,081
 Amortization of intangible assets ...................................      --          830
                                                                      --------     --------
 Total costs and expenses ...........................................    9,879       21,971
                                                                      --------     --------
Loss from operations ................................................   (7,931)     (19,188)
Interest income, net ................................................      126          612
                                                                      --------     --------
Net loss ............................................................ ($ 7,805)    ($18,576)
                                                                      ========     ========

Net loss per share, basic and diluted ...............................  ($ 1.12)      ($0.60)
                                                                      ========     ========
Shares used in computation basic and diluted ........................    6,957       31,084
                                                                      ========     ========


---------------------------
*Stock-based compensation:
 Cost of revenue ....................................................  $   154     $    359
 Research and development ...........................................    1,160        1,589
 Selling, general and administrative ................................    2,339        2,896
                                                                      --------     --------
                                                                       $ 3,653     $  4,844
                                                                      ========     ========

</TABLE>





            See notes to condensed consolidated financial statements


<PAGE>


                             VINA TECHNOLOGIES, INC.
                 Condensed Consolidated Statements Of Cash Flows
                                 (in thousands)
                                   (unaudited)
<TABLE>

<CAPTION>

                                                                              Three Months Ended
                                                                                    March 31,
                                                                                    ---------
                                                                                 2000       2001
                                                                                 ----       ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                           <C>         <C>
  Net loss ................................................................   $ (7,805)   $(18,576)
  Reconciliation of net loss to net cash used in operating
    activities:
    Depreciation and amortization .........................................        204       1,446
    Stock-based compensation ..............................................      3,653       4,844
    In-process research and development ...................................         --       5,081
    Provision for inventory order commitment ..............................         --       1,800
  Changes in operating assets and liabilities:
    Accounts receivable ...................................................       (743)     (1,884)
    Inventories ...........................................................          6         630
    Prepaid expenses and other ............................................       (139)      1,222
    Other assets ..........................................................       (100)        (75)
    Accounts payable ......................................................       (218)        138
    Accrued compensation and related benefits .............................         32      (1,609)
    Accrued warranty ......................................................         34          32
    Other current liabilities .............................................         82        (607)
                                                                              --------    --------
     Net cash used in operating activities ................................     (4,994)     (7,558)
                                                                              --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment .....................................       (532)       (948)
  Acquisition of business, net of cash acquired ...........................         --        (454)
  Purchases of short-term investments .....................................    (12,642)       (550)
  Proceeds from sales/maturities of short-term investments ................         --      12,394
                                                                              --------    --------
     Net cash provided by (used in) investing activities ..................    (13,174)     10,442
                                                                              --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from sale of convertible preferred stock ...................     23,821          --
  Proceeds from sale of common stock ......................................        894         721
  Repurchase of common stock ..............................................        (70)       (500)
  Proceeds from issuance of long-term debt ................................         --          --
  Repayments on long-term debt ............................................       (130)         --
                                                                              --------    --------
     Net cash provided by financing activities ............................     24,515         221
                                                                              --------    --------

NET CHANGE IN CASH AND CASH EQUIVALENTS ...................................      6,347       3,105

CASH AND CASH EQUIVALENTS, Beginning of period ............................      2,568       7,740
                                                                              --------    --------
CASH AND CASH EQUIVALENTS, End of period ..................................   $  8,915    $ 10,845
                                                                              ========    ========
</TABLE>

            See notes to condensed consolidated financial statements

<PAGE>


                             VINA TECHNOLOGIES, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)

1. Unaudited Interim Financial Information

Business - VINA  Technologies,  Inc. (the Company),  incorporated  in June 1996,
designs,   develops,   markets   and   sells   multiservice   broadband   access
communications  equipment that enables  telecommunications  service providers to
deliver  bundled voice and data services.  The Company has incurred  significant
losses since  inception and expects that net losses and negative cash flows from
operations will continue for the foreseeable future.

Basis of Presentation - The condensed  consolidated financial statements include
the accounts of VINA Technologies,  Inc. and its wholly owned subsidiaries.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.  The interim accompanying  financial information is unaudited and
has been prepared in accordance with generally  accepted  accounting  principles
for interim  financial  information  and with the  instructions to Form 10-Q and
Article  10 of  Regulation  S-X.  Accordingly,  it does not  include  all of the
information and notes required by generally accepted  accounting  principles for
annual  financial  statements.  In the  opinion of  management,  such  unaudited
information  includes  all  adjustments  (consisting  only of  normal  recurring
adjustments)  necessary  for a fair  presentation  of the  interim  information.
Operating  results for the three months ended March 31, 2001 are not necessarily
indicative of the results that may be expected for the year ending  December 31,
2001. For further information, refer to VINA's reports filed with the Securities
and Exchange  Commission,  including its Annual Report on Form 10-K for the year
ended December 31, 2000.

Comprehensive loss for the three months ended March 31, 2000 was the same as net
loss.  Comprehensive  loss  for the  three  months  ended  March  31,  2001  was
$18,524,000,  and includes net loss as well as $52,000 of net unrealized gain on
available for sale investments.

New Accounting  Standard - On January 1, 2001, the Company adopted  Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities."  SFAS No.  133,  as amended,  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
Under  SFAS  No.  133,  certain  contracts  that  were not  formerly  considered
derivatives may now meet the definition of a derivative.  The Company  generally
does not utilize  derivative  instruments for any purpose and at January 1, 2001
had identified no such instruments.  Therefore, the adoption of SFAS No. 133 had
no  impact  on  the  Company's  consolidated  financial  position,   results  of
operations  or  cash  flows.  If in  the  future  the  Company  had  significant
derivative instruments the Company would ensure that policies and procedures are
put in place to comply with SFAS No. 133.

2. INVENTORIES


   Inventories consist of the following (in thousands):

                                             December 31,      March 31,
                                                2000             2001
                                                ----             ----


       Raw materials and subassemblies.....   $ 1,034         $   871
       Finished goods......................       939             816
                                              -------         -------
       Inventories.........................   $ 1,973         $ 1,687
                                              =======         =======



<PAGE>


3. NET LOSS PER SHARE

The  following  is a  calculation  of the  denominators  used for the  basic and
diluted net loss per share computations (in thousands):

                                                 Three months ended
                                                    March 31,
                                                 ------------------
                                                  2000         2001
                                                  ----         ----


  Weighted average common shares outstanding...  9,585       34,173
  Weighted average common shares outstanding
    subject to repurchase...................... (2,628)      (3,089)
                                                ------       ------

Shares used in computation, basic and diluted.   6,957       31,084
                                                ======       ======

During all periods presented, the Company had securities outstanding which could
potentially  dilute basic earnings per share in the future, but were excluded in
the computation of diluted EPS in such periods,  as their effect would have been
antidilutive due to the net loss reported in such periods.

4. ACQUISITION

On  February  27,  2001,  the  Company  completed  the  acquisition  of Woodwind
Communications  Systems,  Inc.  (Woodwind),  a provider of  voice-over-broadband
network edge access solutions,  based in Germantown,  Maryland.  The acquisition
was accounted for as a purchase in accordance with Accounting  Principles  Board
Opinion No. 16. Under the terms of the merger  agreement,  the Company  acquired
all  outstanding  capital  stock of Woodwind by paying $7.5  million in cash and
issuing  approximately  4.15 million shares of Company common stock. The Company
assumed  Woodwind's  outstanding  stock  options,  which,  if fully  vested  and
exercised,  would  result in the  issuance of an  additional  approximately  1.1
million  shares of the Company's  common stock.  The total  purchase price as of
February 27, 2001 has been  preliminarily  allocated to the assets  acquired and
liabilities  assumed  based on their  respective  fair  values  as  follows  (in
thousands):

Total purchase price:
    Cash Consideration          $ 7,500
    Common Stock                 39,465
    Options Assumed               2,591
    Acquisition Expenses            601
                                -------
                                $50,157
                                =======

Purchase Price Allocation:
    Fair market value of net tangible
    assets acquired at
    February 27, 2001           $  6,728
                                            Economic
                                              Life
                                              ----
Intangible assets acquired:
  Workforce-In-Place               1,236       3
  Tradename                          346       4
  Core technology                  3,022       4
  Current technology                 310       4
  In-process technology            5,081
  Goodwill                        35,400       4
  Deferred tax liabilities        (1,966)
                                 -------
                                 $50,157
                                 =======

VINA recorded a one-time charge of $5.1 million in the first quarter of 2001 for
purchased  in-process  technology  related to development  projects that had not
reached technological feasibility,  had no alternative future use, and for which
successful  development  was  uncertain.  The  conclusion  that  the  in-process
development effort, or any material sub-component, had no alternative future use
was reached in consultation with VINA and Woodwind managements.

The  development  projects,  both the  ClariNet  and the  Piccolo  are  software
intensive network edge products.  Both projects are based on the same integrated
access gateway ("IAG") platform. ClariNet is capable of providing end users with
Centrex  like  features  and can  operate  as a PBX  replacement.  In  addition,
ClariNet  scales in  multiples  of 4, to a total of 12 voice  lines,  and can be
stacked to provide coverage to 24 standard voice lines.  Piccolo is a lower cost
alternative  aimed at offices  that do not need a robust  feature set for future
expansion and provides  eight voice ports and one 10/100 Mbps Ethernet port, but
retains  the   distributed   central  office   architecture   of  the  ClariNet.
Additionally,  the  Company is in the  process of  enhancing  the  ClariNet  and
Piccolo  products  with next  generation  software  that would give the products
voice over internet protocol ("VoIP")  capabilities as well as ATM enhancements,
enhanced reliability and new features.  Development of ClariNet and Piccolo will
utilize the same software platform. At the time of acquisition,  estimated costs
to complete the  development  of both  products was expected to be an additional
$1.1 million.  Management  expects that  products  being  developed  will become
available for sale in fiscal 2001;  however,  no assurances  can be given.  VINA
will begin to benefit from the  acquired  research  and  development  related to
these products once it begins shipping. Costs incurred on the projects after the
acquisition  date through March 31, 2001 is approximately  $250,000.  Failure to
reach successful  completion of these projects could result in impairment of the
associated  capitalized  intangible  assets  and could  require  the  Company to
accelerate the time period over which the intangibles are being amortized, which
could  have a  material  adverse  effect on the  Company's  business,  financial
condition or results of operations.

Significant  assumptions  have been used to  determine  the value of  in-process
technology,  including the following.  First, an income approach that focuses on
the income producing capability of the acquired technology,  and best represents
the present value of the future  economic  benefits  which we expected to derive
from them. Second, we forecast net cash flows that we expected might result from
the development effort, using projections prepared by VINA's management.  Third,
a discount rate of 25% was used, based upon the estimated  weighted average rate
of  return  for  Woodwind,  which is  consistent  with the  implied  transaction
discount rate.  Fourth, we added a premium of 35% for the in-process  technology
to reflect the additional risk of the in-process technology.

In accordance with Financial  Accounting  Standards Board Interpretation No. 44,
"Accounting for Certain Transactions  involving Stock Compensation," the Company
recorded the intrinsic value, measured as the difference between the grant price
and fair market value on the acquisition  consummation date, of unvested options
assumed in the acquisition as deferred stock  compensation.  Such deferred stock
compensation,  which aggregated $588,000, is recorded as a separate component of
stockholders'  equity and will be  amortized  over the  vesting  term of related
options.  For the quarter ended March 31, 2001, $14,000 of compensation  expense
related to these awards was recorded in the accompanying  condensed consolidated
statement of operations.

Pro Forma Financial Results

The following  selected  unaudited pro forma combined  results of operations for
the three months  ended March 31, 2000 and 2001 of VINA and  Woodwind  have been
prepared assuming that the acquisitions occurred at the beginning of the periods
presented.  The following pro forma  financial  information  is not  necessarily
indicative  of the results  that would have  occurred had the  acquisition  been
completed  at the  beginning of the period  indicated  nor is it  indicative  of
future operating results (in thousands, except per share data):



<PAGE>



                                                        Three Month Ended
                                                            March 31,
                                                       2000           2001
                                                       ----           ----
Net revenue                                         $  5 ,235      $  11,031
Net loss                                            $ (11,534)     $ (24,155)
Net loss per share                                  $   (1.04)     $   (0.69)
Shares used in calculation of net loss per share       11,106         35,233

The pro  forma  results  of  operations  give  effect  to  certain  adjustments,
including  amortization  of purchased  intangibles,  goodwill and deferred stock
compensation  associated  with the  acquisition.  The $5.1  million  charge  for
purchased  in-process  research and  development  has been excluded from the pro
forma results, as it is a material non-recurring charge.

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

     When used in this discussion,  the words "may," "will," "could" and similar
expressions  are  intended to  identify  forward-looking  statements.  These are
statements  that relate to future periods and include  statements as to expected
net  losses,   expected  cash  flows,   expected   expenses,   expected  capital
expenditures,  expected  deferred  stock  compensation,  the adequacy of capital
resources,  growth  in  operations,  the  ability  to  integrate  companies  and
operations  that we may acquire,  the expected  date of and our ability to enter
into a definitive  manufacturing  contract with  Benchmark,  the  scheduling and
timing of  litigation,  the Company's  strategy  with regard to  protecting  its
proprietary   technology,   the   ability  to  compete   and  respond  to  rapid
technological  change, and the performance and utility of products and services.
Forward-looking  statements  are subject to risks and  uncertainties  that could
cause actual results to differ materially from those projected.  These risks and
uncertainties  include,  but are not  limited to the extent to which the current
economic environment affects our current and potential customers' demand for our
products, the effects of competition and alternative technological advances, our
ability to design,  market and  manufacture  successfully  products that address
market  demands,  changes in our business  plans,  and the matters  discussed in
"Factors That May Affect Results." These  forward-looking  statements speak only
as of the date  hereof.  The  Company  expressly  disclaims  any  obligation  or
undertaking to release publicly any updates or revisions to any  forward-looking
statements contained herein to reflect any change in the Company's  expectations
with regard  thereto or any change in events,  conditions  or  circumstances  on
which any such statement is based.

     The following  information should be read in conjunction with the unaudited
condensed  consolidated financial statements and notes thereto set forth in Item
1 of this  quarterly  report.  We also urge  readers to review and  consider our
disclosures describing various factors that could affect our business, including
the  disclosures  under  Management's   Discussion  and  Analysis  of  Financial
Condition and Results of Operations  and Risk Factors and the audited  financial
statements and notes thereto  contained in our Annual Report on Form 10-K, filed
with the Securities and Exchange Commission on April 2, 2001.

Recent Developments

     On  February  27,  2001,   we  completed   the   acquisition   of  Woodwind
Communications  Systems, Inc. ("Woodwind"),  a provider of  voice-over-broadband
network edge access solutions.  We issued  approximately  4.15 million shares of
common  stock  and  $7.5  million  in cash  in  exchange  for all of  Woodwind's
outstanding capital stock. In addition, we assumed Woodwind's  outstanding stock
options,  which, if fully vested and exercised,  would result in the issuance of
approximately  1.1 million  shares of VINA common  stock.  The  transaction  was
accounted for as a purchase.

Overview

     VINA Technologies is a leading  developer of multiservice  broadband access
communications  equipment  that  enables  communications  service  providers  to
deliver  bundled  voice  and  data  services.  Our  products  integrate  various
broadband access  technologies,  including  existing  circuit-based and emerging
packet-based networks,  onto a single platform to alleviate capacity constraints
in communications networks.

     From our  inception  in June 1996  through  February  1997,  our  operating
activities  related  primarily to  developing  and testing  prototype  products,
commencing  the staffing of our sales and  customer  service  organizations  and
establishing  relationships  with  our  customers.  We  began  shipments  of our
Multiservice  T1 Integrator  product family in March 1997. In May 1999, we began
shipping our  Multiservice  Xchange product.  Since inception,  we have incurred
significant  losses, and as of March 31, 2001, we had an accumulated  deficit of
$92.1 million.

     We  market  and  sell  our  products  directly  to  communications  service
providers and through OEM  customers and  value-added  resellers,  or VARs.  Our
revenue  is  recognized  when  persuasive  evidence  of an  arrangement  exists,
delivery has  occurred or services  have been  rendered,  the price is fixed and
determinable,  and collectibility is reasonably  assured.  This generally occurs
upon  commercial  shipment  of our  products  at which  time we have no  further
performance obligations to our customers. We also record a provision at the time
we recognize  revenue  primarily for warranty  costs. We recognize no revenue on
products  shipped on a trial  basis.  We recognize  extended  warranty and other
service  revenue  ratably  over the  respective  service  periods.  This service
revenue has not been significant to date.

     Our customer  base is highly  concentrated.  A  relatively  small number of
customers  have  accounted  for a  significant  portion  of our  historical  net
revenue.  For the three months ended March 31, 2001,  sales to our three largest
customers  accounted for approximately 74% of our net revenue, of which sales to
Nuvox   Communications   (formerly   Gabriel   Communications,   Inc.),   Lucent
Technologies  and  Advanced  Telecom  Group  accounted  for  33%,  23% and  18%,
respectively,  of our net revenue. While we anticipate the level of sales to any
specific  customer  will vary  from  period to  period,  we expect  that we will
continue to experience  significant  customer  concentration for the foreseeable
future. To date,  international  sales have not been significant.  International
sales have been denominated solely in U.S. dollars and, accordingly, we have not
been exposed to significant fluctuations in foreign currency exchange rates.

     Cost of revenue consists  primarily of costs of products  manufactured by a
third-party contract manufacturer, component costs, depreciation of property and
equipment,  personnel  related  costs to manage the  contract  manufacturer  and
warranty costs,  and excludes  amortization of deferred stock  compensation.  We
conduct program  management,  manufacturing  engineering,  quality assurance and
documentation  control at our  facility  in Newark,  California.  Currently,  we
outsource our manufacturing and testing  requirements to Benchmark  Electronics.
Accordingly,  a significant  portion of our cost of revenue consists of payments
to this contract manufacturer.

     We  expect  our gross  margin to be  affected  by many  factors,  including
competitive pricing pressures,  fluctuations in manufacturing volumes, inventory
obsolescence,  costs of components and  sub-assemblies,  costs from our contract
manufacturers   and  the  mix  of  products  or  system   configurations   sold.
Additionally,  our gross  margin  may  fluctuate  due to  changes  in our mix of
distribution channels.

     Research and  development  expenses  consist  primarily  of  personnel  and
related costs,  consulting  expenses and prototype  costs related to the design,
development,  testing  and  enhancement  of our  multiservice  broadband  access
products,  and exclude  amortization of deferred stock compensation.  We expense
all of our research and development expenses as incurred.

     Selling, general and administrative expenses consist primarily of personnel
and related costs,  including  salaries and commissions for personnel engaged in
direct and indirect selling and marketing and other administrative functions and
promotional  costs,  including  advertising,  trade shows and related costs, and
exclude amortization of deferred stock compensation.

     Stock-based  compensation  consists  of the fair  value  of  stock  options
granted to  nonemployees  for services and deferred stock  compensation on stock
options  granted  to  employees.  Deferred  stock  compensation  represents  the
difference  between the deemed fair market value of our common stock at the time
of option grants and the exercise prices of these options.  for employee grants.
We are amortizing  deferred  stock  compensation  using a multiple  option award
valuation approach over the vesting periods of the applicable options,  which is
generally four years.  The  amortization of deferred stock  compensation,  based
upon options  granted through March 31, 2001, is expected to be $10.5 million in
the next three quarters of 2001, $6.9 million in 2002 and $2.3 million in 2003.

     Interest income,  net,  consists  primarily of interest earned on our cash,
cash equivalent and short-term  investment balances partially offset by interest
expense associated with our debt obligations.

Results of Operations

     Three Months Ended March 31, 2001 and 2000

     Net revenue.  Net revenue  increased to $11.0  million for the three months
ended March 31,  2001 from $5.2  million  for the three  months  ended March 31,
2000.  The growth in net revenue in the first  quarter of 2001 was primarily due
to increased unit sales to existing customers and sales to new customers.

     Cost of revenue.  Cost of revenue  increased  to $8.2 million for the three
months  ended March 31, 2001 from $3.2  million for the three months ended March
31,  2000.  Gross  profit  increased  to $2.8 million for the three months ended
March 31, 2001 from $1.9  million  for the three  months  ended March 31,  2000.
Gross  profit as a  percentage  of net revenue  decreased  to 25.2% in the first
quarter of 2001 from 37.6% in the first quarter of 2000.  This decrease in gross
margin  was  due  primarily  to  an  expense  for  excess  inventory   purchased
commitments  of $1.8 million in the first  quarter of 2001.  The  provision  for
excess inventory  purchase  commitments was primarily a result of a shift in one
of our customer's  demands from next generation network equipment to traditional
Time Division Multiplex ("TDM") network equipment.

     Research  and  development  expenses.  Research  and  development  expenses
increased to $4.7  million for the three months ended March 31, 2001,  from $2.5
million for the three  months ended March 31,  2000.  Research  and  development
expenses  decreased as a percentage of net revenue to 42.7% in the first quarter
of 2001 from 48.3% in the first quarter of 2000. The increase in absolute dollar
amounts was primarily a result of additional personnel costs, prototype expenses
and  consulting  costs.  We believe that  continued  investment  in research and
development is critical to attaining our strategic product,  and as a result, we
expect research and development  expenses to increase in absolute dollars in the
future.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses  increased  to $6.5  million for the three months ended
March 31, 2001 from $3.7 million for the three months ended March 31, 2000. This
increase was primarily  attributable  to increased  personnel  costs,  including
hiring of additional  sales and key management  personnel,  as well as increased
promotional expenses.  Selling, general and administrative expenses decreased as
a percentage of revenue to 59.0% for the first quarter of 2001 compared to 71.7%
for the first quarter of 2000.  We expect  selling,  general and  administrative
expenses to continue to increase in absolute dollars as we continue to build our
infrastructure to support our anticipated business growth.

     Stock-based  compensation.  Stock-based  compensation  expense increased to
$4.8 million for the three months ended March 31, 2001 from $3.7 million for the
three months ended March 31, 2000. Based on stock options granted,  we expect to
record $4.4 million of amortization  of stock-based  compensation in the quarter
ending June 30, 2001.

     Other income,  net. Other income,  net for the three months ended March 31,
2001  increased to $612,000  from  $126,000 for the three months ended March 31,
2000.  This increase was  primarily  attributable  to interest  earned on higher
average cash balances throughout the relevant period.

Liquidity and Capital Resources

     Net cash used in operating activities was $7.6 million for the three months
ended March 31, 2001 and $5.0 million for the three months ended March 31, 2000.
Cash  used in  operating  activities  resulted  primarily  from  net  loss  from
operations of $18.6 million, an increase in accounts receivable of $1.9 million,
a decrease  in accrued  compensation  and  related  benefits  and other  current
liabilities  of $1.6  million  and  $607,000,  respectively,  offset by  noncash
activities  including  amortization  of  deferred  stock  compensation  of  $4.8
million,  in-process research and development of $5.1 million and a $1.8 million
inventory commitment purchase charge.

     Net cash provided by investing  activities  was $10.4 million for the three
months  ended March 31,  2001 and net cash used was $13.2  million for the three
months ended March 31, 2000. Cash provided by investing activities was primarily
due to proceeds from the sale or maturity of short-term  investments  of $12.4.'
million, offset by net cash used for the acquisition of Woodwind of $454,000 and
purchases of property and equipment of $948,000.

     Net cash provided by financing activities was $221,000 for the three months
ended March 31,  2001 and $24.5  million  for the three  months  ended March 31,
2000.  Cash provided by financing  activities as of March 31, 2001 was primarily
due to stock  purchased  under  our  employee  stock  purchase  plan and  option
exercises of $721,000 offset by the repurchase of common stock of $500,000.

     We currently have no significant  commitments for capital expenditures.  We
anticipate that we will increase our capital expenditures  consistently with our
anticipated  growth in personnel and  infrastructure,  including  facilities and
systems.

     We expect to experience  significant  growth in our operating  expenses for
the foreseeable  future. As a result, we anticipate that operating expenses will
constitute a material use of our cash  resources.  In addition,  we may use cash
resources to fund acquisitions,  such as our recent acquisition of Woodwind,  or
invest in complementary  businesses,  technologies or products.  We believe that
our cash on hand will be  sufficient  to meet our  working  capital  and capital
expenditure requirements for at least the next 12 months.

     We anticipate that we will need to obtain  additional  funding during 2002,
and we may seek to sell  additional  equity or debt  securities or secure a bank
line of credit.  Currently,  we have no other  immediately  available sources of
liquidity.  The sale of additional  equity or other  securities  could result in
additional dilution to our stockholders.  Arrangements for additional  financing
may not be available in amounts or on terms acceptable to us, if at all.

                         FACTORS THAT MAY AFFECT RESULTS

     The risks and  uncertainties  described  below are not the only ones facing
our company.  Additional  risks and  uncertainties  not presently known to us or
that we currently deem  immaterial may also impair our business  operations.  If
any of the following risks actually occur, our business, financial condition and
results of operations could be materially and adversely affected.

                          Risks Related To Our Business

Because we have a limited  operating  history  and  operate in a new and rapidly
evolving  telecommunications  market,  you may  have  difficulty  assessing  our
business and predicting our future financial results.

     We were  incorporated  in June 1996 and did not begin shipping our products
until March 1997.  Due to our limited  operating  history,  it is  difficult  or
impossible for us to predict our future results of operations.

We have a history of losses, we expect future losses,  and we may not be able to
generate   sufficient   net   revenue  in  the  future  to  achieve  or  sustain
profitability.

     We have incurred significant losses since inception and expect that our net
losses and negative cash flow from  operations will continue for the foreseeable
future.  We incurred net losses of  approximately  $8.0  million in 1998,  $17.1
million  in 1999 and $43.3  million  in 2000.  As of March 31,  2001,  we had an
accumulated deficit of approximately $92.1 million. To achieve profitability, we
will need to  generate  and  sustain  substantially  higher  net  revenue  while
maintaining reasonable cost and expense levels. We have large fixed expenses and
expect to continue to incur significant and increasing expenses for research and
development,  sales and marketing, customer support, developing direct sales and
distribution channels, and general and administrative expenses.

We  rely on a small  number  of  telecommunications  customers  for  substantial
portions of our net revenue.  If we lose one of our  customers  or  experience a
delay or  cancellation  of a  significant  order or a  decrease  in the level of
purchases  from any of our  customers,  our net  revenue  could  decline and our
operating results and business could be harmed.

     We derive almost all of our net revenue from direct sales to a small number
of   telecommunications   customers  and  our  indirect   sales  through  Lucent
Technologies,  our original equipment manufacturer,  or OEM, customer that sells
and markets our products.  If we lose one of our customers or experience a delay
or cancellation  of a significant  order or a decrease in the level of purchases
from any of our  customers,  our net revenue  could  decline  and our  operating
results and business could be harmed. Our three largest customers  accounted for
approximately 74% of our net revenue for the first quarter ended March 31, 2001,
of which sales to Nuvox Communications, Lucent Technologies and Advanced Telecom
Group  accounted  for  33%,  23% and  18%,  respectively.  We  expect  that  the
telecommunications industry will continue to experience consolidation. If any of
our  customers  is  acquired  by a  company  that  is one  of  our  competitors'
customers,  we may  lose its  business.  In  addition,  if our OEM  customer  is
acquired, we could lose that customer. For example,  Intermedia  Communications,
one of our service provider  customers,  was recently  acquired by MCI Worldcom.
Also, the ultimate  business success of our direct service  provider  customers,
our OEM customer and VARs, and our indirect  customers who purchase our products
through an OEM customer and VARs,  could affect the demand for our products.  In
addition,  any difficulty in collecting  amounts due from one or more of our key
customers could harm our operating  results and financial  condition.  If any of
these events occur, our net revenue could decline and our operating  results and
business could be harmed.

The difficulties  experienced by many of our current  customers have had and are
expected to continue to have an adverse effect on our business.

     To date,  we have sold the majority of our products to CLEC  customers.  In
recent  months,   CLECs  have  experienced  extreme  difficulties  in  obtaining
financing  for their  businesses.  As a result,  CLECs have been forced to scale
back their  operations or terminate their  operations.  If our customers  become
unable to pay for shipped products,  we may be required to write-off significant
amounts of our accounts receivable.  Similarly,  if our customers order products
and then suspend or cancel the orders  prior to  shipping,  we will not generate
revenues from the products we build. In such circumstances,  our inventories may
increase and our expenses will  increase.  Further,  we may incur  substantially
higher inventory  carrying costs and excess inventory that could become obsolete
over time.  We expect that our business will  continue to be  significantly  and
negatively  affected  unless and until there is  substantial  improvement in the
ability of CLECs to finance their businesses.

Our net revenue could decline  significantly if our relationship  with our major
OEM customer deteriorates.

     A  significant  portion of our net revenue is derived  from sales to Lucent
Technologies,  our OEM  customer.  Our  agreement  with our OEM  customer is not
exclusive and does not contain  minimum  volume  commitments.  Our OEM agreement
with Lucent expires in May 2002. Lucent may terminate the agreement earlier upon
60 days' notice. At any time or after a short period of notice, our OEM customer
could elect to cease marketing and selling our products. They may so elect for a
number of reasons,  including the acquisition by our OEM customer of one or more
of our  competitors  or  their  technologies,  or  because  one or  more  of our
competitors introduces superior or more cost-effective products. In addition, we
intend to develop and market new  products  that may compete  directly  with the
products of our OEM customer,  which may also harm our  relationships  with this
customer.  For example,  our MBX product may compete with our OEM customer which
could  adversely  affect  our  relationship  with that  customer.  Our  existing
relationship  with our OEM  customer  could make it harder  for us to  establish
similar relationships with our OEM customer's competitors.  Any loss, reduction,
delay or cancellation in expected sales to our OEM customer, or our inability to
establish similar relationships with new OEM customers in the future, would hurt
our  business  and our  ability to  increase  net  revenues  and could cause our
quarterly results to fluctuate significantly.

If we do not predict our manufacturing  requirements accurately,  we could incur
additional costs and suffer manufacturing delays.

     We currently provide  forecasts of our demand to our contract  manufacturer
12 months prior to scheduled  delivery of products to our customers.  Lead times
for the materials and components that we order vary  significantly and depend on
numerous factors, including the specific supplier, contract terms and demand for
a component at a given time. If we overestimate our  manufacturing  requirements
or a product  in our  manufacturing  forecast  becomes  obsolete,  our  contract
manufacturer may have purchased excess or obsolete  inventory.  For example,  in
March 2001 we expensed $1.8 million for excess inventory  purchase  commitments.
For those parts that are unique to our products, we could be required to pay for
these excess or obsolete parts and recognize related inventory write-down costs.
If we  underestimate  our  requirements,  our contract  manufacturer may have an
inadequate  inventory,  which could interrupt  manufacturing of our products and
result in delays in shipments and net revenue.

The   telecommunications   industry  is   characterized   by  rapidly   changing
technologies.  If we are unable to develop and maintain strategic  relationships
with vendors of emerging  technologies,  we may not be able to meet the changing
needs of our customers.

     Our success  will depend on our ability to develop and  maintain  strategic
relationships  with  vendors of  emerging  technologies  such as  Jetstream  and
Tachion. We depend on these relationships for access to information on technical
developments and  specifications  that we need to develop our products.  We also
may not be able to predict  which  existing or potential  partners  will develop
leading  technologies or industry  standards.  We may not be able to maintain or
develop strategic  relationships or replace strategic  partners that we lose. If
we fail to develop or  maintain  strategic  relationships  with  companies  that
develop necessary technologies or create industry standards,  our products could
become obsolete. We could also be at a competitive disadvantage in attempting to
negotiate  relationships  with  those  potential  partners  in  the  future.  In
addition,  if any strategic partner breaches or terminates its relationship with
us, we may not be able to sustain or grow our business.

Our  failure to enhance our  existing  products  or develop  and  introduce  new
products that meet changing  customer  requirements and  technological  advances
would limit our ability to sell our products.

     Our ability to increase net revenue will depend significantly on whether we
are  able to  anticipate  or  adapt to  rapid  technological  innovation  in the
telecommunications  industry and to offer, on a timely and cost-effective basis,
products  that meet changing  customer  demands and industry  standards.  If the
standards  adopted  are  different  from those  which we have chosen to support,
market acceptance of our products may be significantly reduced or delayed.

     Developing new or enhanced  products is a complex and uncertain process and
we may not have sufficient  resources to successfully and accurately  anticipate
technological  and market trends,  or to  successfully  manage long  development
cycles. We must manage the transition from our older products to new or enhanced
products to minimize  disruption in customer  ordering  patterns and ensure that
adequate supplies of new products are available for delivery to meet anticipated
customer  demand.  Any  significant  delay or failure to release new products or
product  enhancements  on a  timely  and  cost-effective  basis  could  harm our
reputation   and   customer   relationships,   provide  a   competitor   with  a
first-to-market  opportunity  or allow a competitor  to achieve  greater  market
share.

Telecommunications  networks  are  comprised  of multiple  hardware and software
products from multiple  vendors.  If our products are not compatible  with other
companies'  products within our customers'  networks,  orders will be delayed or
cancelled.

     Many of our  customers  require  that our products be designed to work with
their existing  networks,  each of which may have different  specifications  and
utilize  multiple   protocols  that  govern  the  way  devices  on  the  network
communicate  with each other.  Our  customers'  networks  may  contain  multiple
generations of products from different vendors that have been added over time as
their networks have grown and evolved. Our products may be required to work with
these  products as well as with future  products in order to meet our customers'
requirements. In some cases, we may be required to modify our product designs to
achieve a sale, which may result in a longer sales cycle, increased research and
development  expense,  and reduced  operating  margins.  If our products are not
compatible with existing equipment in our customers'  networks,  whether open or
proprietary, installations could be delayed, or orders for our products could be
cancelled.

If we  fail  to  win  contracts  at  the  beginning  of  our  telecommunications
customers'  deployment  cycles,  we may not be able to sell  products  to  those
customers for an extended period of time, which could inhibit our growth.

     Our existing and potential  telecommunications customers generally select a
limited number of suppliers at the beginning of a deployment cycle. As a result,
if we are not selected as one of these suppliers, we may not have an opportunity
to sell products to that customer until its next purchase cycle, which may be an
extended period of time. In addition,  if we fail to win contracts from existing
and potential  customers  that are at an early stage in their design cycle,  our
ability to sell  products  to these  customers  in the  future may be  adversely
affected  because  they may prefer to continue  purchasing  products  from their
existing  vendor.  Since we rely on a small number of customers for the majority
of our  sales,  our  failure  to  capitalize  on  limited  opportunities  to win
contracts with these customers could severely harm us.

Since the telecommunications  industry is characterized by large purchase orders
placed on an irregular basis, it is difficult to accurately  forecast the timing
and size of orders. Accordingly,  our net revenue and operating results may vary
significantly and unexpectedly from quarter to quarter.

     We may  receive  purchase  orders  for  significant  dollar  amounts  on an
irregular basis depending upon the timing of our customers'  network  deployment
and sales and marketing  efforts.  Because orders we receive may have short lead
times, we may not have sufficient  inventory to fulfill these orders, and we may
incur  significant  costs in attempting to expedite and fulfill these orders. In
addition,  orders  expected in one quarter could shift to another because of the
timing  of  our   customers'   purchase   decisions  and  order   reductions  or
cancellations.  Under our OEM agreement, our OEM customer has the right to delay
previously placed orders for any reason.  The time required for our customers to
incorporate  our products  into their own can vary  significantly  and generally
exceeds several  months,  which further  complicates our planning  processes and
reduces  the  predictability  of our  operating  results.  Accordingly,  our net
revenue and  operating  results may vary  significantly  and  unexpectedly  from
quarter to quarter.

     Our  customers  have  in the  past  built,  and  may in the  future  build,
significant   inventory  in  order  to  facilitate  more  rapid   deployment  of
anticipated  major projects or for other  reasons.  After building a significant
inventory  of our  products,  these  parties  may be faced with  delays in these
anticipated  major  projects  for various  reasons.  As a result,  Lucent may be
required to maintain a significant  inventory of our products for longer periods
than they originally  anticipated,  which would reduce further purchases.  These
reductions,  in  turn,  could  cause  fluctuations  in  our  future  results  of
operations and severely harm our business and financial condition.

Since the sales cycle for our products is typically long and  unpredictable,  we
have difficulty predicting future net revenues and our net revenue and operating
results may fluctuate significantly.

     A customer's decision to purchase our products often involves a significant
commitment of its resources and a lengthy  evaluation and product  qualification
process.  Our sales cycle  typically  lasts from nine  months to one year.  As a
result,  we may  incur  substantial  sales and  marketing  expenses  and  expend
significant  management  effort  without any  assurance  of a sale. A long sales
cycle  also  subjects  us  to  other  risks,   including   customers'  budgetary
constraints,  internal acceptance reviews and order reductions or cancellations.
Even after  deciding to purchase our products,  our  customers  often deploy our
products slowly.

We have a limited order  backlog.  If we do not obtain  substantial  orders in a
quarter, we may not meet our net revenue objectives for that quarter.

     Since inception, our order backlog at the beginning of each quarter has not
been  significant,  and we expect  this trend to  continue  for the  foreseeable
future.  Accordingly,  we must obtain substantial additional orders in a quarter
for shipments in that quarter to achieve our net revenue  objectives.  Our sales
agreements allow  purchasers to delay scheduled  delivery dates without penalty.
Our customer  purchase  orders also allow  purchasers  to cancel  orders  within
negotiated time frames without significant penalty. In addition,  due in part to
factors such as the timing of product release dates, purchase orders and product
availability,  significant volume shipments of our products could occur near the
end of our fiscal quarters. If we fail to ship products by the end of a quarter,
our operating results could be adversely affected for that quarter.

We  depend  upon a  single  contractor  for  most  of our  manufacturing  needs.
Termination of this relationship  could impose significant costs on us and could
harm or interfere with our ability to meet scheduled product deliveries.

     We do not have  internal  manufacturing  capabilities  and  have  generally
relied primarily on a contract manufacturer,  Flextronics  International Limited
to  build  our  products.  Effective  April  1,  2001,  we  transferred  primary
manufacturing  responsibility  of our  products  from  Flextronics  to Benchmark
Electronics.  We do not yet have a signed definitive manufacturing contract with
Benchmark.  We expect  to have a signed  formal  contract  by June  2001.  If we
execute a formal contract with  Benchmark,  we anticipate that Benchmark will be
able to cancel the  contract on short notice and will not be obligated to supply
products  to us for any  specific  period,  in any  specific  quantity or at any
specific price,  except as may be provided in a particular  purchase order.  Our
reliance  on  Benchmark  involves  a  number  of  risks,  including  the lack of
operating  history between us and Benchmark,  the current absence of any written
contract, absence of control over our manufacturing capacity, the unavailability
of, or interruptions in, access to process technologies and reduced control over
component availability,  delivery schedules,  manufacturing yields and costs. If
we are unable to successfully negotiate a contract with Benchmark that will meet
our manufacturing needs, we will not have a primary manufacturing  contract with
any third party.  We will have to  immediately  identify and qualify one or more
acceptable  alternative   manufacturers,   which  could  result  in  substantial
manufacturing  delays and cause us to incur  significant  costs.  It is possible
that an  alternate  source  may not be  available  to us when  needed or be in a
position  to  satisfy  our  production  requirements  at  acceptable  prices and
quality. Any significant interruption in manufacturing would harm our ability to
meet our scheduled product deliveries to our customers,  harm our reputation and
could  cause the loss of  existing or  potential  customers,  any of which could
seriously harm our business and operating results.

We depend on sole source and limited source suppliers for key components.  If we
are unable to buy  components on a timely basis,  we will not be able to deliver
our products to our customers on time which could cause us to lose customers. If
we purchase  excess  components  to reduce this risk,  we may incur  significant
inventory costs.

     We obtain  several of the key  components  used in our products,  including
interface  circuits,   microprocessors,   digital  signal  processors,   digital
subscriber  line  modules and flash  memory,  from single or limited  sources of
supply. We have encountered,  and expect in the future to encounter,  difficulty
in obtaining  these  components from our suppliers.  For example,  in the fourth
quarter of 1999, we experienced a severe  shortage of  components,  particularly
subscriber line interface circuits, which jeopardized our ability to deliver our
products in a timely  fashion.  We purchase most  components on a purchase order
basis and we do not have  guaranteed  supply  arrangements  with most of our key
suppliers. Financial or other difficulties faced by our suppliers or significant
changes in demand for these  components  could limit the  availability  of these
components  to us at  acceptable  prices and on a timely  basis,  if at all. Any
interruption or delay in the supply of any of these components, or our inability
to obtain these  components  from  alternate  sources at  acceptable  prices and
within a reasonable  amount of time,  would limit our ability to meet  scheduled
product  deliveries  to our  customers or force us to  reengineer  our products,
which may hurt our gross margins and our ability to deliver products on a timely
basis, if at all. A substantial period of time could be required before we would
begin receiving adequate supplies from alternative suppliers,  if available.  In
addition,  qualifying  additional  suppliers is time consuming and expensive and
exposes us to potential supplier production difficulties or quality variations.

The competition for qualified personnel is particularly  intense in our industry
and  in  Northern  California.  If we are  unable  to  attract  and  retain  key
personnel, we may not be able to sustain or grow our business.

     Our  success   depends  to  a   significant   degree  upon  the   continued
contributions of the principal members of our sales, marketing,  engineering and
management  personnel,  many of whom would be difficult to replace.  None of our
officers or key employees is bound by an  employment  agreement for any specific
term,  and we do not have "key person" life insurance  policies  covering any of
our employees.  The competition for qualified personnel is particularly  intense
in our industry and in Northern California,  where there is a high concentration
of established and emerging growth technology companies.  This competition makes
it more  difficult  to  retain  our key  personnel  and to  recruit  new  highly
qualified  personnel.  To attract  and  retain  qualified  personnel,  we may be
required to grant large option or other stock-based  incentive awards, which may
be highly  dilutive  to  existing  shareholders.  We may also be required to pay
significant  base  salaries  and  cash  bonuses  to  attract  and  retain  these
individuals,  which payments could harm our operating results. In particular, we
have  experienced  difficulty  in hiring  software,  hardware  and  system  test
engineers and engineers with voice and data experience.  We believe that we will
continue  to  experience   difficulty  in  recruiting  and  retaining  qualified
personnel in the future.  If we are not able to attract and retain the necessary
personnel,  we could face delays in developing our products and implementing our
sales and marketing plans, and we may not be able to grow our business.

We plan to invest a significant amount of our resources to fund the development,
marketing  and sale of our  products;  however,  if we are  unable to expand our
sales and marketing  operations,  we will not be able to achieve brand awareness
for our products and generate additional sales.

     We plan to increase  significantly  our operating  expenses to fund greater
levels of research and development,  expand our sales and marketing  operations,
broaden our customer support capabilities and develop new distribution channels.
We also plan to expand our general and  administrative  capabilities  to address
the demands  resulting from this offering and the expected  continued  growth of
our business.  Our operating expenses are largely based on anticipated personnel
requirements and net revenue trends,  and a high percentage of our expenses are,
and will  continue to be, fixed.  In addition,  we may be required to spend more
for research and  development  than  originally  budgeted in order to respond to
industry trends. As a result, any delay in generating or recognizing net revenue
could cause  significant  variations  in our  operating  results from quarter to
quarter and could result in substantial operating losses.

We have rapidly and significantly expanded our operations in recent periods. Our
business  will be  harmed  if we fail to manage  effectively  the  growth of our
operations.

     We have  rapidly  and  significantly  expanded  our  operations  in  recent
periods. This expansion  significantly  strains our managerial,  operational and
financial  resources.  Some of our senior management  personnel joined us within
the last 14 months. Our Vice President of Marketing, Executive Vice President of
Research and Development  and Operations,  Vice President of Human Resources and
Vice  President of Sales have all joined us since  January  2000.  To manage the
expected growth of our operations and personnel, we will be required to:

     o    improve  existing  and  implement  new   operational,   financial  and
          management controls, reporting systems and procedures;

     o    hire, train, motivate and manage additional qualified personnel;

     o    expand access to additional manufacturing capacity;

     o    effectively   manage  multiple   relationships   with  our  customers,
          suppliers, distributors and other third parties; and

     o    coordinate our domestic and international operations and establish the
          necessary infrastructure to implement our international strategy.

     If we are not able to manage the growth of our  operations  in an efficient
and timely manner, our business will be severely harmed.

The telecommunications  market is becoming increasingly global. While we plan to
expand  internationally,  we have limited experience  operating in international
markets.  In our efforts to expand  internationally,  we could become subject to
new  risks  which  could  hamper  our  ability  to  establish   and  manage  our
international operations.

     We have sales and customer support personnel in the United Kingdom and have
initiated distribution  relationships in Europe. We intend to further expand our
international  operations  and enter new markets.  This  expansion  will require
significant  management  attention  and  financial  resources.  We have  limited
experience in marketing and  distributing  our products  internationally  and in
developing  versions  of our  products  that  comply  with local  standards.  In
addition, our international  operations will be subject to other inherent risks,
including:

     o    the  failure  to  adopt   regulatory   changes  that   facilitate  the
          provisioning of competitive communications services;

     o    difficulties adhering to international protocol standards;

     o    expenses associated with customizing products for other countries;

     o    protectionist   laws  and   business   practices   that  favor   local
          competition;

     o    reduced protection for intellectual property rights in some countries;

     o    difficulties  enforcing  agreements through other legal systems and in
          complying with foreign laws;

     o    fluctuations in currency exchange rates;

     o    political and economic instability; and

     o    import or export licensing requirements.

Our products  require  substantial  investment  over a long product  development
cycle, and we may not realize any return on our investment.

     The  development  of new or enhanced  products  is a complex and  uncertain
process.  We and our OEM  manufacturers  have in the past and may in the  future
experience  design,  manufacturing,  marketing and other difficulties that could
delay or prevent the development,  introduction or marketing of new products and
enhancements. For example, we had expected to begin shipments of our MBX product
in the second  quarter of 2001,  which has been delayed to the third  quarter of
2001 because of continued development issues. Development costs and expenses are
incurred  before we generate any net revenues  from sales of products  resulting
from these  efforts.  We intend to continue to incur  substantial  research  and
development  expenses,  which  could have a negative  impact on our  earnings in
future periods.

If our products contain  undetected  software or hardware errors, we could incur
significant  unexpected expenses,  experience product returns and lost sales and
be subject to product liability claims.

     Our products are highly  technical  and are designed to be deployed in very
large and complex  networks.  While our products  have been  tested,  because of
their  nature,  they can only be fully  tested when  deployed  in networks  that
generate high amounts of voice or data traffic.  Because of our short  operating
history,  our products  have not yet been broadly  deployed.  Consequently,  our
customers  may discover  errors or defects in our products  after they have been
broadly deployed. In addition, our customers may use our products in conjunction
with products from other vendors.  As a result,  when problems  occur, it may be
difficult to identify  the source of the  problem.  Any defects or errors in our
products  discovered  in the future,  or failures  of our  customers'  networks,
whether  caused by our products or another  vendor's  products,  could result in
loss of customers or decrease in net revenue and market share.

     We may be subject to significant  liability claims because our products are
used in connection with critical  communications  services.  Our agreements with
customers  typically  contain  provisions  intended  to limit  our  exposure  to
liability  claims.  However,  these  limitations  may not preclude all potential
claims  resulting from a defect in one of our products.  Liability  claims could
require  us to  spend  significant  time  and  money  in  litigation  or to  pay
significant  damages.  Any of these  claims,  whether or not  successful,  could
seriously damage our reputation and business.

The complex nature of our telecommunications products requires us to provide our
customers with a high level of service and support by highly trained  personnel.
If we do not expand our customer service and support  organization,  we will not
be able to meet our customers' demands.

     We currently have a small customer service and support organization, and we
will need to increase  these  resources  to support any increase in the needs of
our existing and new customers. Hiring customer service and support personnel in
our industry is very  competitive due to the limited number of people  available
with the necessary technical skills and understanding of our technologies. If we
are unable to expand or maintain our customer  service and support  organization
our  customers  may  become  dissatisfied  and we could lose  customers  and our
reputation  could be harmed. A reputation for poor service would prevent us from
increasing sales to existing or new customers.

We rely on a combination of patent, copyright,  trademark and trade secret laws,
as well as confidentiality  agreements and licensing arrangements,  to establish
and protect our proprietary rights. Failure to protect our intellectual property
will  limit  our  ability  to  compete  and  result  in a loss of a  competitive
advantage and decreased net revenue.

     Our success and ability to compete depend  substantially on our proprietary
technology.   Any  infringement  of  our  proprietary  rights  could  result  in
significant  litigation  costs,  and  any  failure  to  adequately  protect  our
proprietary  rights could result in our competitors  offering similar  products,
potentially  resulting in loss of a  competitive  advantage  and  decreased  net
revenue. We presently have three U.S. patent applications pending, but no issued
patents.  Despite  our  efforts  to protect  our  proprietary  rights,  existing
copyright,  trademark and trade secret laws afford only limited  protection.  In
addition,  the laws of many  foreign  countries  do not protect our  proprietary
rights to the same extent as do the laws of the United  States.  Attempts may be
made to copy or reverse  engineer  aspects of our  products or to obtain and use
information  that we regard as proprietary.  Accordingly,  we may not be able to
protect our proprietary rights against  unauthorized third party copying or use.
Furthermore,  policing  the  unauthorized  use of  our  products  is  difficult.
Litigation may be necessary in the future to enforce our  intellectual  property
rights,  to protect our trade  secrets or to determine the validity and scope of
the proprietary  rights of others.  This litigation  could result in substantial
costs and diversion of resources and may not ultimately be successful.

We may be subject to intellectual  property  infringement claims that are costly
to defend and could limit our ability to use some technologies in the future.

     Our industry is characterized by frequent  intellectual property litigation
based on allegations of infringement of intellectual  property rights. From time
to time,  third  parties have  asserted,  and may assert in the future,  patent,
copyright,  trademark and other intellectual  property rights to technologies or
rights that are important to our  business.  For example,  we recently  received
letters from Sonoma Systems alleging that one of our products infringes a patent
owned by Sonoma Systems and inviting us to discuss  licensing  their patent.  In
addition,  our  agreements  may require that we indemnify  our customers for any
expenses  or  liabilities  resulting  from  claimed  infringements  of  patents,
trademarks  or  copyrights  of third  parties.  Any  claims  asserting  that our
products infringe or may infringe the proprietary rights of third parties,  with
or without merit,  could be  time-consuming,  resulting in costly litigation and
diverting the efforts of our technical and  management  personnel.  These claims
could cause us to stop selling, incorporating or using our products that use the
challenged  intellectual  property  and could also  result in  product  shipment
delays or require us to redesign or modify our products or enter into  licensing
agreements.  These licensing agreements, if required, could increase our product
costs and may not be available on terms acceptable to us, if at all.

If necessary  licenses of third-party  technology are not available to us or are
very   expensive,   we  may  be  unable  to  develop  new  products  or  product
enhancements.

     From time to time we may be  required  to  license  technology  from  third
parties to develop  new  products  or product  enhancements.  These  third-party
licenses may not be available to us on commercially reasonable terms, if at all.
Our inability to obtain  necessary  third-party  licenses may force us to obtain
substitute  technology of lower quality or  performance  standards or at greater
cost, any of which could seriously harm the competitiveness of our products.

Because our headquarters are located in Northern  California,  which is a region
containing active earthquake faults and experiencing a power energy crisis, if a
natural disaster occurs or the power energy crisis continues, our business could
be shut down or severely impacted.

     Our business and operations  depend on the extent to which our facility and
products are protected  against  damage from fire,  earthquakes,  power loss and
similar events.  Despite  precautions  taken by us, a natural  disaster or other
unanticipated  problem  could,  among  other  things,  hinder our  research  and
development  efforts,  delay the shipment of our products and affect our ability
to receive and fulfill orders. For example, California power energy supplies are
at severely low levels. This has resulted in blackouts and increased costs which
have affected our business.

        Risks Associated With The Multiservice Broadband Access Industry

Intense  competition  in the market for our  telecommunications  products  could
prevent us from  increasing  or  sustaining  our net revenue and prevent us from
achieving or sustaining profitability.

     The  market  for   multiservice   broadband   access   products  is  highly
competitive. We compete directly with numerous companies,  including Accelerated
Networks,  ADTRAN,  Carrier Access,  Cisco Systems,  Efficient Networks,  Lucent
Technologies,  Nortel  Networks and Polycom.  Many of our current and  potential
competitors  have  longer  operating   histories,   greater  name   recognition,
significantly   greater   selling  and  marketing,   technical,   manufacturing,
financial,   customer  support,   professional  services  and  other  resources,
including  vendor-sponsored  financing programs.  As a result, these competitors
are able to devote greater  resources to the  development,  promotion,  sale and
support of their products to leverage  their customer bases and broaden  product
offerings to gain market share.  In addition,  our  competitors  may foresee the
course of market  developments  more accurately than we do and could develop new
technologies  that  compete  with  our  products  or even  render  our  products
obsolete.  We may  not  have  sufficient  resources  to  continue  to  make  the
investments  or  achieve  the  technological   advances   necessary  to  compete
successfully with existing or new competitors.  In addition,  due to the rapidly
evolving  markets in which we compete,  additional  competitors with significant
market    presence   and   financial    resources,    including    other   large
telecommunications  equipment  manufacturers,  may  enter our  markets,  thereby
further intensifying competition.

     We believe that our existing OEM customer continuously evaluates whether to
offer its own multiservice broadband access devices. If our OEM customer decides
to internally design and sell its own multiservice  broadband access devices, or
acquire one or more of our competitors or their broadband  access  technologies,
it could  eliminate or  substantially  reduce its purchases of our products.  In
addition,  our current  growth may cause our OEM  customer to view us as greater
competition.  Our OEM relationship could also be harmed as we develop and market
new products  that may compete  directly  with the products of our OEM customer.
For  example,  our MBX  product may compete  with our OEM  customer  which could
adversely affect our relationship with that customer.  We cannot assure you that
our OEM customer  will  continue to rely,  or expand its  reliance,  on us as an
external source of supply for its multiservice broadband access devices. Because
we rely on one OEM customer for a  substantial  portion of our net  revenues,  a
loss of sales to this OEM customer could seriously harm our business,  financial
condition and results of operations.

Because our industry is characterized  by  consolidation,  we could  potentially
lose customers, which would harm our business.

     The  markets  in  which  we  compete  are   characterized   by   increasing
consolidation,  as exemplified by the recent or pending  acquisitions  of Sonoma
Systems  by  Nortel  Networks,   Efficient  Networks  by  Siemens  and  PairGain
Technologies  by  ADC   Telecommunications.   We  cannot  predict  how  industry
consolidation  will  affect  our  competitors  and we may not be able to compete
successfully in an increasingly consolidated industry.

Our products are subject to price reduction and margin pressures. If our average
selling  prices  decline  and we  fail  to  offset  that  decline  through  cost
reductions,  our gross  margins and potential  profitability  could be seriously
harmed.

     In the past,  competitive  pressures have forced us to reduce the prices of
our  products.  In the second  quarter of 1999,  we reduced  the price of our T1
Integrator  product in response to competition,  which reduced our gross margins
in subsequent periods. We expect similar price reductions to occur in the future
in response to competitive  pressures.  In addition,  our average selling prices
decline when we negotiate  volume price  discounts  with  customers  and utilize
indirect  distribution  channels.  If our average  selling prices decline and we
fail to offset that  decline  through  cost  reductions,  our gross  margins and
potential profitability would be seriously harmed.

Sales  of  our  products  depend  on the  widespread  adoption  of  multiservice
broadband  access services and if the demand for  multiservice  broadband access
services  does not  develop,  then  our  results  of  operations  and  financial
condition could be harmed.

     Our business will be harmed if the demand for multiservice broadband access
services  does not increase as rapidly as we  anticipate,  or if our  customers'
multiservice  broadband  access  service  offerings are not well received in the
marketplace.  Critical  factors  affecting the  development of the  multiservice
broadband access services market include:

     o    the development of a viable business model for multiservice  broadband
          access services, including the capability to market, sell, install and
          maintain these services;

     o    cost constraints,  such as installation,  space and power requirements
          at the central offices of incumbent local exchange carriers, or ILECs;

     o    compatibility  of equipment from multiple  vendors in service provider
          networks;

     o    evolving   industry   standards  for  transmission   technologies  and
          transport protocols;

     o    varying  and  uncertain  conditions  of  the  communications   network
          infrastructure,   including   quality   and   complexity,   electrical
          interference,   and  crossover   interference   with  voice  and  data
          telecommunications services;

     o    domestic and foreign government regulation; and

     o    the ability of  competitive  local  exchange  carriers,  or CLECs,  to
          obtain sufficient funding and to successfully grow their businesses.

     The market for  multiservice  broadband  access devices may fail to develop
for these or other  reasons or may develop more slowly than  anticipated,  which
could harm our business.

If we fail to comply with regulations and evolving industry standards,  sales of
our existing and future products could be harmed.

     The markets for our products are  characterized by a significant  number of
communications  regulations  and  standards,  some of which are  evolving as new
technologies are deployed. Our customers may require our products to comply with
various  standards,  including those  promulgated by the Federal  Communications
Commission,  or FCC,  standards  established by  Underwriters  Laboratories  and
Telcordia Technologies or proprietary standards promoted by our competitors.  In
addition,  our key  competitors may establish  proprietary  standards which they
might  not make  available  to us. As a  result,  we may not be able to  achieve
compatibility with their products.  Internationally,  we may also be required to
comply with standards established by  telecommunications  authorities in various
countries   as   well   as   with    recommendations    of   the   International
Telecommunications Union.

Our customers are subject to  government  regulation,  and changes in current or
future laws or regulations  that negatively  impact our customers could harm our
business.

     The jurisdiction of the FCC extends to the entire communications  industry,
including our customers.  Future FCC regulations  affecting the broadband access
industry,  our customers or their service  offerings may harm our business.  For
example,  FCC  regulatory  policies  that  affect the  availability  of data and
Internet  services may impede our customers'  penetration into markets or affect
the prices that they are able to charge. In addition,  international  regulatory
bodies are beginning to adopt standards and regulations for the broadband access
industry.  If our  customers  are hurt by laws or  regulations  regarding  their
business, products or service offerings, demand for our products may decrease.

                Additional Risks That May Affect Our Stock Price

We may engage in future acquisitions or strategic investments that we may not be
able to successfully  integrate or manage, which could hurt our business.  These
acquisitions or strategic investments may also dilute our stockholders and cause
us to incur debt and assume contingent liabilities.

     We may review  acquisition  prospects and strategic  investments that could
complement our current product offerings,  augment our market coverage,  enhance
our technical capabilities or otherwise offer growth opportunities. For example,
on February 27,  2001,  we acquired  Woodwind  Communications  Systems,  Inc., a
provider of  voice-over-broadband  network edge access solutions.  The aggregate
acquisition price consisted of approximately  4.15 million shares of VINA common
stock,  $7.5 million in cash, and the assumption of Woodwind options to purchase
approximately  1.1  million  shares  of common  stock.  The  issuance  of equity
securities  in  connection  with  these   acquisitions   or  investments   could
significantly  dilute our  investors.  If we incur or assume debt in  connection
with these acquisitions or investments, we may incur interest charges that could
increase our net loss.  We have little  experience  in  evaluating,  completing,
managing or integrating acquisitions and strategic investments. Acquisitions and
strategic  investments may entail numerous integration risks and impose costs on
us, including:

     o    difficulties  in  assimilating  acquired  operations,  technologies or
          products including the loss of key employees;

     o    unanticipated costs;

     o    diversion of management's attention from our core business concerns;

     o    adverse  effects on  business  relationships  with our  suppliers  and
          customers or those of the acquired businesses;

     o    risks  of  entering  markets  in  which  we have no or  limited  prior
          experience;

     o    assumption of contingent liabilities;

     o    incurrence of significant  amortization  expenses  related to goodwill
          and other intangible assets; and

     o    incurrence of significant write-offs.

We may need to raise more capital,  but the availability of additional financing
is  uncertain.  If adequate  funds are not  available  or are not  available  on
acceptable  terms,  we may be unable to  develop  or enhance  our  products  and
services,  take  advantage  of future  opportunities  or respond to  competitive
pressures, which could negatively impact our product development and sales.

     We  currently  anticipate  that we will need to obtain  additional  funding
during 2002. If our capital requirements vary significantly from those currently
planned,  we may  require  additional  financing  sooner  than  anticipated.  If
additional  funds are raised  through  the  issuance of equity  securities,  the
percentage of equity ownership of our existing  stockholders will be reduced. In
addition,  holders of these equity  securities  may have rights,  preferences or
privileges  senior to those of the holders of our common  stock.  If  additional
funds  are  raised  through  the  issuance  of  debt  securities,  we may  incur
significant   interest   charges,   and  these  securities  would  have  rights,
preferences and privileges senior to holders of common stock. The terms of these
securities  could  also  impose  restrictions  on  our  operations.   Additional
financing may not be available  when needed on terms  favorable to us or at all.
If adequate funds are not available or are not available on acceptable terms, we
may be unable to develop or enhance our products and services, take advantage of
future opportunities or respond to competitive pressures, which could negatively
impact our product development and sales.

Item 3 Quantitative and Qualitative Disclosures About Market Risk

     We are exposed to  financial  market  risks  related to interest  rates and
foreign  currency  exchange rates.  Our investments in commercial paper and debt
obligations are subject to interest rate risk, but due to the short-term  nature
of these investments,  interest rate changes would not have a material impact on
their  value  as of  December  31,  2000 or at March  31,  2001.  To  date,  our
international   sales  have  been  denominated  solely  in  U.S.  dollars,   and
accordingly,  we have not been  exposed to foreign  currency  rate  fluctuations
related  to  sales  transactions.   However,  the  functional  currency  of  our
subsidiary in the United  Kingdom is the U.S.  dollar and as the local  accounts
are maintained in British pounds,  we are subject to foreign  currency  exchange
rate fluctuations  associated with remeasurement to U.S. dollars. A hypothetical
change of 10% in the foreign  currency  exchange rates would not have a material
impact on our consolidated financial position or the results of operations.


<PAGE>


PART II:  OTHER INFORMATION

Item 1  Legal Proceedings

     From time to time,  we may be  involved  in  litigation  relating to claims
arising out of the ordinary  course of business.  As of the date of this report,
there are no material legal proceedings pending or, to our knowledge, threatened
against us.

Item 2  Changes in Securities and Use of Proceeds

(c)  Changes in Securities

     On February 27, 2001, VINA acquired Woodwind  Communications  Systems, Inc.
pursuant  to the  merger  of a wholly  owned  subsidiary  of VINA  with and into
Woodwind.  Pursuant  to the  merger  and as  partial  consideration  for all the
outstanding shares of capital stock of Woodwind Communications, VINA issued 4.15
million  shares of VINA Common Stock to the former  stockholders  of Woodwind in
exchange  for the capital  stock of  Woodwind.  The shares of Common  Stock were
issued pursuant to the exemption from registration  provided by Section 3(a)(10)
of the Securities Act of 1933, as amended.

(d)  Use of Proceeds from Sales of Registered Securities

     On August 9, 2000, the SEC declared effective our Registration Statement on
Form S-1 (No. 333-36398),  relating to the initial public offering of our common
stock.  The managing  underwriters in the offering were Lehman  Brothers,  Inc.,
Thomas Weisel  Partners LLC and U.S.  Bancorp Piper  Jaffray,  Inc. The offering
commenced on August 10, 2000,  and was closed on August 15, 2000,  after we sold
all of the 3,000,000  shares of common stock  registered  under the Registration
Statement. On September 15, 2000, the underwriters purchased 450,000 shares from
us in connection with the exercise of the underwriters'  over-allotment  option.
The initial  public  offering  price was $12 per share for an aggregate  initial
public  offering  of  $41,00,000  (including  the  450,000  shares  sold  to the
underwriters upon exercise of the  over-allotment  option),  netting proceeds of
approximately  $36.5 million to us after underwriting fees of approximately $2.9
million and other offering expenses of approximately $2.0 million. None of these
fees and expenses were paid to any  director,  officer,  general  partner of the
Company or their  associates,  persons owning 10% or more of any class of equity
securities of the Company or an affiliate of the Company.

     The  net  proceeds  were  predominately  held in a money  market  fund  and
commercial paper and bonds as of March 31, 2001. Of the net proceeds, from these
investments,  approximately $7.5 million was used towards partial  consideration
of the purchase of Woodwind  Communications  Systems,  Inc.

Item 6  Exhibits and Reports on Form 8-K

     (b) The Company  filed a report on Form 8-K on March 5, 2001 to provide the
details of the acquisition of Woodwind Communications Systems, Inc.









<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.


                                    VINA TECHNOLOGIES, INC.


Date:  May 14, 2001          By:      /s/ Steven M. Bauman
                                 ----------------------------------
                                   Steven M. Bauman
                                   President and Chief Executive Officer
                                   (Principal Executive Officer)




Date:  May 14, 2001          By:     /s/ Stanley E. Kazmierczak
                                 ----------------------------------
                                   Stanley E. Kazmierczak
                                   Chief Financial Officer
                                   (Principal Financial and Accounting Officer)