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, 2003

                                       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: 0-31903

                             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 [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ]   No [X]

The number of outstanding shares of the registrant's  Common Stock,  $0.0001 par
value, was 62,189,930 as of March 31, 2003.


<PAGE>
<TABLE>
<CAPTION>



                             VINA TECHNOLOGIES, INC.


                                      INDEX

                                                                                                       Page
                                                                                                       ----


<S>                                                                                                     <C>
PART I:  FINANCIAL INFORMATION...........................................................................3

   Item 1. Condensed Consolidated Financial Statements...................................................3

           Condensed Consolidated Balance Sheets as of December 31, 2002 and March 31, 2003..............3

           Condensed Consolidated Statements of Operations for the three months ended March 31, 2002
           and 2003......................................................................................4

           Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2002
           and 2003......................................................................................5

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

   Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........12

   Item 3. Quantitative and Qualitative Disclosures About Market Risk...................................33

   Item 4. Controls and Procedures......................................................................33

PART II:  OTHER INFORMATION.............................................................................34

   Item 1. Legal Proceedings............................................................................34

   Item 6. Exhibits and Reports on Form 8-K.............................................................34

   Signatures...........................................................................................35

</TABLE>






                                       2
<PAGE>

PART I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements
<TABLE>
<CAPTION>

                             VINA Technologies, Inc.
                      Condensed Consolidated Balance Sheets
               (In thousands, except share and per share amounts)
                                   (unaudited)

                                                                            December 31,   March 31,
                                                                               2002          2003
                                                                           --------------------------
  ASSETS

  Current Assets:
<S>                                                                          <C>          <C>
  Cash, cash equivalents .................................................   $   4,567    $   2,673
  Restricted cash ........................................................       3,500          333
  Short-term investments .................................................          50           --
  Accounts receivable, net ...............................................       3,348        1,689
  Inventories ............................................................       3,367        3,839
  Prepaid expenses and other .............................................       2,354        1,084
                                                                             ---------     --------
         Total current assets ............................................      17,186        9,618

Property and equipment, net ..............................................       1,968        1,655
Other assets .............................................................          32           --
Intangible assets, net ...................................................       1,394        1,277
                                                                             ---------     --------
         Total assets ....................................................   $  20,580    $  12,550
                                                                             =========    =========

LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable .......................................................   $   2,979    $   1,864
  Accrued compensation and related benefits ..............................         900          539
  Accrued warranty .......................................................         414          400
  Other current liabilities ..............................................       1,915        1,532
  Current debt ...........................................................       3,000           --
                                                                             ---------     --------
         Total current liabilities .......................................       9,208        4,335

Commitments (Note 7) .....................................................          --           --

Stockholders' equity:
Convertible preferred stock; $0.0001 par value; 5,000,000 shares
   authorized;  none outstanding .........................................          --           --
Common stock; $0.0001 par value; 125,000,000 shares authorized; shares
   outstanding: December 31, 2002, 62,080,636;  March 31, 2003, 62,189,930           6            6
   Additional paid-in capital ............................................     189,297      188,786
   Deferred stock compensation ...........................................        (315)        (112)
   Accumulated deficit ...................................................    (177,616)    (180,465)
                                                                              --------     --------

     Total stockholders' equity                                                 11,372        8,215
                                                                             =========    =========

     Total liabilities and stockholders' equity                              $  20,580    $  12,550
                                                                             =========    =========
</TABLE>



            See notes to condensed consolidated financial statements

                                       3
<PAGE>
<TABLE>
<CAPTION>


                             VINA Technologies, Inc.
                 Condensed Consolidated Statements of Operations
                    (In thousands, except per share amounts)
                                   (unaudited)

                                                                              Three Months Ended
                                                                                   March 31,
                                                                               2002        2003
                                                                               ----        ----

<S>                                                                          <C>         <C>
Net revenue .................................................................$  6,439    $  2,708
Cost of revenue (excluding stock-based compensation) ........................   6,125       1,692
                                                                             --------    --------
Gross profit (loss) (excluding stock-based compensation) ....................     314       1,016
                                                                             --------    --------
Costs and expenses:
  Research and development (excluding stock-based compensation) .............   5,423       1,828
  Selling, general and administrative (excluding stock-based compensation) ..   4,803       1,936
  Stock-based compensation, net* ............................................   1,653        (324)
  Amortization of goodwill and intangible assets ............................     324         116
  Impairment of goodwill and intangible assets ..............................  29,276          --
  Restructuring expenses (excluding stock-based compensation) ...............      --         309
                                                                             --------    --------
      Total costs and expenses ..............................................  41,479       3,865
                                                                             --------    --------
Loss from operations ........................................................ (41,165)     (2,849)

Other income, net ...........................................................      72          --
                                                                             --------    --------
Net loss ....................................................................($41,093)   ($ 2,849)
                                                                             ========    ========

Net loss per share, basic and diluted .......................................($  0.67)   ($  0.05)
                                                                             ========    ========
Shares used in computation basic and diluted ................................  61,531      62,047
                                                                             ========    ========



* Stock-based compensation, net:
   Cost of revenue ..........................................................$    158    $     --
   Research and development .................................................     401          20
   Selling, general and administrative ......................................   1,094          (8)
   Restructuring benefit ....................................................      --        (336)
                                                                             --------    --------
                                                                             $  1,653    $   (324)
                                                                             ========    ========

</TABLE>




            See notes to condensed consolidated financial statements

                                       4
<PAGE>

<TABLE>
<CAPTION>

                             VINA Technologies, Inc.
                 Condensed Consolidated Statements of Cash Flows
                                 (in thousands)
                                   (unaudited)


                                                                Three Months Ended
                                                                      March 31,
                                                                2002          2003
                                                                ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                            <C>         <C>
  Net loss .................................................   $(41,093)   $ (2,849)
  Reconciliation of net loss to net cash used in operating
       activities:
    Depreciation and amortization ..........................        909         441
    Disposal of property and equipment .....................        304          --
    Impairment of goodwill and intangible assets ...........     29,276          --
    Stock-based compensation, net ..........................      1,653        (324)
  Changes in operating assets and liabilities:
    Accounts receivable ....................................      4,886       1,659
    Inventories ............................................        596        (472)
    Prepaid expenses and other .............................        199       1,270
    Other assets ...........................................         (2)         32
    Accounts payable .......................................     (1,589)     (1,115)
    Accrued compensation and related benefits ..............        (55)       (361)
    Accrued warranty .......................................        (29)        (14)
    Other current liabilities ..............................       (135)       (383)
                                                               --------    --------
     Net cash used in operating activities .................     (5,080)     (2,116)
                                                               --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment ......................       (302)        (11)
  Proceeds from sales/maturities of short-term investments .         --          50
                                                               --------    --------
     Net cash provided by (used in) investing activities ...       (302)         39
                                                               --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payment of short-term debt ..............................         --      (3,000)
   Release of restricted cash ..............................         --       3,167
   Proceeds from sale of common stock ......................      9,803          --
   Proceeds from sale of stock under employee stock purchase
   plan ....................................................         --          16
   Repurchase of common stock ..............................        (92)         --
                                                               --------    --------
     Net cash provided by financing activities .............      9,711         183
                                                               --------    --------

NET CHANGE IN CASH AND CASH EQUIVALENTS ....................      4,329      (1,894)

CASH AND CASH EQUIVALENTS, Beginning of period .............     15,805       4,567
                                                               --------    --------

CASH AND CASH EQUIVALENTS, End of period ...................   $ 20,134    $  2,673
                                                               ========    ========
</TABLE>

            See notes to condensed consolidated financial statements

                                       5
<PAGE>



                             VINA TECHNOLOGIES, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)

1. Unaudited Interim Financial Information

Business - VINA Technologies,  Inc. (the Company or VINA),  incorporated in June
1996,  designs,  develops,  markets  and sells  multi-service  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.  On March 17, 2003,  VINA,
Larscom  Incorporated,  a Delaware  corporation  ("Larscom")  and a wholly-owned
subsidiary of Larscom, entered into an Agreement and Plan of Merger, under which
the Larscom subsidiary will merge with and into VINA,  followed by the merger of
VINA with and into  Larscom,  with Larscom as the  surviving  corporation.  As a
result of the merger,  each issued and  outstanding  share of VINA common  stock
will be  automatically  converted  into the right to receive 0.2659 of a validly
issued,  fully paid and nonassessable  share of Larscom common stock. The merger
is intended to be a tax-free  reorganization  under  Section 368 of the Internal
Revenue  Code of 1986,  as amended,  and is expected to be treated as a purchase
for  financial  accounting  purposes,  in  accordance  with  generally  accepted
accounting principles.

Basis of Presentation -- The condensed consolidated financial statements include
the accounts of the Company and its wholly owned  subsidiaries.  All significant
inter company accounts and transactions  have been eliminated in  consolidation.
The  accompanying  interim  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, 2003 are not necessarily  indicative of the results
that  may be  expected  for the year  ending  December  31,  2003.  For  further
information,  refer to the  Company's  reports  filed  with the  Securities  and
Exchange Commission, including its Annual Report on Form 10-K for the year ended
December 31, 2002.

In this report, all references to "VINA" "we," "us," "our" or the "Company" mean
VINA Technologies, Inc. and its subsidiaries, except where it is made clear that
the term means only the parent company.

Going Concern - The  accompanying  financial  statements have been prepared on a
going  concern  basis,  which  contemplates  the  realization  of assets and the
satisfaction  of liabilities  in the normal course of business.  As of March 31,
2003,  we had cash and cash  equivalents  of $2.7  million  and its  accumulated
deficit was $180.5 million.  These factors among others raise  substantial doubt
that we will be able to continue as a going  concern for a reasonable  period of
time. We has implemented,  and is continuing to pursue,  aggressive cost cutting
programs in order to preserve available cash.

Our  intent is to  complete  the  announced  merger  with  Larscom in the second
quarter.  If we are  unsuccessful  in  completing  the merger  during the second
quarter,  then we will need to  obtain  additional  funding  during  the  second
quarter of 2003 to continue operations.  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.

Revenue Recognition - The Company recognizes revenue 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.  The
Company  generates  revenue  from  sale of  products  and  related  services  to
communications  service providers and through original  equipment  manufacturers
and value added resellers.

                                       6
<PAGE>

Product revenue is generated from the sale of communications  equipment embedded
with  software  that is essential to its  functionality,  and  accordingly,  the
Company accounts for these  transactions in accordance with SEC Staff Accounting
Bulletin  (SAB) No.  101,  Revenue  Recognition  in  Financial  Statements,  and
Statement of Position (SOP) 97-2, Software Revenue Recognition.  Product revenue
is recognized when all SAB No. 101 and SOP 97-2 criteria are met which generally
occurs at the time of shipment. In multiple element arrangements where there are
undelivered  elements at the time of shipment,  product revenue is recognized at
the time of shipment as the residual value of the arrangement  after  allocation
of fair value to the  undelivered  elements based on vendor  specific  objective
evidence (VSOE).  There is no VSOE on the sales of communications  equipment due
to the wide range in customer discounts provided by the Company.

Service  revenue is generated from the sale of  installation,  training and post
contract  customer  support  (PCS)  agreements  related  to  the  communications
equipment.  The Company also accounts for these  transactions in accordance with
SAB No. 101 and SOP 97-2, and as such recognizes revenue when all of the related
revenue recognition  criteria are met which is: (i) at the time the installation
or training  service is  delivered;  and (ii)  ratably  over the term of the PCS
agreement. In multiple element arrangements where these services are undelivered
when the communications  equipment is shipped, the Company defers the fair value
of  these  undelivered  elements  based on VSOE and  recognizes  revenue  as the
services are delivered.  VSOE of these  elements is based on  stand-alone  sales
(including  renewal rates of PCS  agreements)  of the services.  For all periods
presented, service revenue has been less than 10% of total net revenue.

The Company  additionally  records a provision for  estimated  sales returns and
warranty costs at the time the product revenue is recognized.

Stock Based  Compensation - The Company  accounts for employee stock plans under
the intrinsic  value method  prescribed by Accounting  Principles  Board Opinion
("APB")  No.  25,  Accounting  for Stock  Issued  to  Employees,  and  Financial
Accounting Standards Board Interpretation ("FIN") No. 44, Accounting for Certain
Transactions  Involving Stock Compensation (an Interpretation of APB No. 25) and
has adopted the  disclosure-only  provisions  of SFAS No.  123,  Accounting  for
Stock-Based  Compensation.  The Company  accounts for  stock-based  compensation
relating to equity instruments  issued to non-employees  based on the fair value
of options or warrants  estimated using the  Black-Scholes  model on the date of
grant in compliance  with the Emerging  Issues Task Force No. 96-18,  Accounting
for Equity Instruments that are issued to Other than Employees for Acquiring, or
in Conjunction with Selling,  Goods or Services.  Compensation expense resulting
from  non-employee  options is amortized  using the multiple  option approach in
compliance with FIN No. 28, Accounting for Stock  Appreciation  Rights and Other
Variable Stock Option or Award Plans.

Pursuant to FIN No. 44, options assumed in a purchase  business  combination are
valued at the date of  acquisition  at their  fair  value  calculated  using the
Black-Scholes  option  pricing model.  The fair value of the assumed  options is
included as part of the purchase price. The intrinsic value  attributable to the
unvested options is recorded as unearned stock-based  compensation and amortized
over the remaining vesting period of the related options. Options assumed by the
Company  related  to the  business  combination  made on behalf  of the  Company
subsequent  to July 1,  2000  (the  effective  date of FIN  No.  44)  have  been
accounted for pursuant to FIN No. 44.

For  purposes of pro forma  disclosure  under SFAS No. 123, the  estimated  fair
value of the options is assumed to be  amortized  to expense  over the  options'
vesting period,  using the multiple option method.  Pro forma  information is as
follows (in thousands, except per share amounts):


                                       7
<PAGE>
<TABLE>
<CAPTION>





                                                                            March 31,
                                                                   -----------------------

                                                                        2002      2003

<S>                                                                 <C>         <C>
Net loss, as reported ............................................. $ (41,093)  $ (2,849)

Add:  Stock-based compensation included in reported net loss,
      net of related tax effects ..................................     1,653       (324)

Less:  Stock-based compensation expense determined under fair
       value method for all awards, net of related tax effects.....    (1,396)      (446)
                                                                    ---------   --------
Pro forma net (loss) .............................................. $ (40,836)  $ (3,619)
                                                                    =========   ========
Net loss per share, as reported - basic and diluted ............... $   (0.67)  $  (0.05)
                                                                    =========   ========
Pro forma loss per share, as reported - basic and diluted ......... $   (0.66)  $  (0.06)
                                                                    =========   ========
</TABLE>

Comprehensive  Loss -  Comprehensive  loss for the three  months ended March 31,
2002 and March 31, 2003 was the same as net loss.

Recent Accounting  Standards - In June 2001, the Financial  Accounting Standards
Board (FASB) issued Statement of Financial  Accounting Standards (SFAS) No. 141,
Business  Combinations and SFAS No. 142,  Goodwill and Other Intangible  Assets.
SFAS No. 141 requires that all business  combinations  initiated  after June 30,
2001 be  accounted  for under the  purchase  method and  addresses  the  initial
recognition and measurement of goodwill and other intangible  assets acquired in
a business  combination.  SFAS No. 142  addresses  the initial  recognition  and
measurement of intangible assets acquired outside of a business  combination and
the  accounting  for goodwill and other  intangible  assets  subsequent to their
acquisition.  SFAS No. 142 provides  that  intangible  assets with finite useful
lives be amortized and that goodwill and intangible assets with indefinite lives
will not be amortized, but will be tested at least annually for impairment.  The
Company  adopted SFAS No. 142 on January 1, 2002. Upon adoption of SFAS No. 142,
the Company has stopped the  amortization  of intangible  assets with indefinite
lives (goodwill,  which includes the re-class of workforce-in-place)  with a net
carrying value of $27.6 million at December 31, 2001 and annual  amortization of
$8.8 million that  resulted from business  combinations  initiated  prior to the
adoption of SFAS No. 141. The Company evaluated goodwill under SFAS No. 142 upon
adoption,  on January  1, 2002,  and  determined  that there was no  impairment.
However, in accordance with SFAS No. 142, the Company was required to reevaluate
goodwill and other  intangibles  for impairment in March 2002 because events and
circumstances  changed  that more likely than not would reduce the fair value of
the reporting unit below its carrying amount (See Note 4).

In August  2001,  the FASB issued SFAS No. 144,  Accounting  for  Impairment  or
Disposal of Long-Lived Assets.  SFAS No. 144 supersedes SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of, and addresses  financial  accounting  and  reporting  for the  impairment or
disposal of long-lived  assets.  This  statement is effective for the Company on
January 1, 2002.  The adoption of this  statement  did not have an impact on the
financial position, results of operations or cash flows of the Company.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities,  which addresses financial accounting and reporting
for costs  associated with exit or disposal  activities and supersedes  Emerging
Issues Task Force  (EITF)  Issue No. 94-3,  "Liability  Recognition  for Certain
Employee  Termination  Benefits  and Other Costs to Exit an Activity  (including
Certain Costs  Incurred in a  Restructuring)."  This  statement  requires that a
Liability for a cost associated with an exit or disposal  activity be recognized
when the  liability is incurred.  Under Issue 94-3, a liability for an exit cost
as defined in Issue 94-3 was recognized at the date of an entity's commitment to
an exit  plan.  This  statement  also  establishes  that  the  liability  should
initially be measured and  recorded at fair value.  This  statement is effective

                                       8
<PAGE>

for the Company on January 1, 2003.  The adoption of this statement did not have
an impact on the financial position,  results of operations or cash flows of the
Company.

In December  2002,  the FASB issued SFAS No.  148,  Accounting  for  Stock-Based
Compensation  -- Transition and  Disclosure,  an amendment of FASB Statement No.
123. SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based  Compensation,
to provide  alternative methods of transition for a voluntary change to the fair
value based method of  accounting  for  stock-based  employee  compensation.  In
addition,  this statement amends the disclosure  requirements of SFAS No. 123 to
require prominent  disclosures in both annual and interim  financial  statements
about the method of accounting for  stock-based  employee  compensation  and the
effect of the method used on reported  results.  This statement is effective for
the Company's fiscal year beginning  January 1, 2003. The Company has elected to
continue accounting for employee stock option plans according to APB No. 25, and
the Company adopted the disclosure requirements under SFAS No. 148 commencing on
December 31, 2002.

In  November  2002,  the FASB  issued FASB  Interpretation  No. 45  "Guarantor's
Accounting  and  Disclosure  requirements  for  Guarantees,  including  Indirect
Guarantees of  Indebtedness of Others" ("FIN 45"). FIN 45 requires the guarantor
to recognize, at the inception of a guarantee, a liability for the fair value of
the obligation  undertaken in issuing the guarantee.  It also  elaborates on the
disclosures  to be made by a guarantor  in its  financial  statements  about its
obligations under certain guarantees that it has issued and to be made in regard
of product warranties.  Disclosures  required under FIN 45 are included in these
financial  statements  (see Note 7 concerning  the reserve for warranty  costs).
However, the initial recognition and initial measurement  provisions of this FIN
are applicable  for  guarantees  issued or modified after December 31, 2002. The
adoption of the recognition and measurement  provisions of FIN 45 did not have a
material effect on the Company's consolidated financial statements.

2. Inventories

     Inventories consist of the following (in thousands):

                                               December 31,     March 31,
                                                 2002              2003
                                               -----------      --------
           Raw materials and subassemblies...     1,684           1,572
           Finished goods....................     1,683           2,267
                                                  -----           -----
           Inventories.......................     3,367           3,839
                                                  =====           =====

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,
                                                         ------------------
                                                          2002       2003
                                                          ----       ----

Weighted average common shares outstanding ..........    62,207     62,152
Weighted average common shares outstanding subject to
   repurchase .......................................      (676)      (105)
                                                        -------    -------
Shares used in computation, basic and diluted .......    61,531     62,047
                                                        =======    =======

During  the three  months  ended  March 31,  2002 and  2003,  we had  securities
outstanding  which could  potentially  dilute  basic  earnings  per share in the
future,  but were excluded in the computation of diluted  earnings per shares in
such periods,  as their effect would have been  antidilutive due to the net loss
reported in such periods.  Such outstanding  securities consist of the following
at: March 31, 2002,  577,774  shares of common stock subject to  repurchase  and
options to purchase  12,668,119  shares of common stock and warrants to purchase
7,090,000 of our common  stock;  March 31, 2003,  70,075  shares of common stock
subject to repurchase and options to purchase  6,743,377 shares of common stock,
and warrants to purchase 7,090,000 shares of common stock.


                                       9
<PAGE>

4. Goodwill and Intangible Assets

As VINA operates in one reportable segment, the design,  development,  marketing
and sale of multiservice broadband access communications equipment, and has only
one reporting unit, VINA consolidated, the measurement of the fair value for our
goodwill is our market capitalization. The deterioration of the telecom industry
and the decline in our current  product  sales in the first quarter were factors
that required the Company to evaluate the fair value of the goodwill. Management
evaluated our fair value as determined by its market capitalization  against its
carrying  value,  net assets,  and  determined  that goodwill was  impaired.  In
addition,  under SFAS No. 144  "Accounting  for the  impairment  of  Disposal of
Long-Lived  Assets" the Company  evaluated the intangible  assets for impairment
and determined a portion of the intangible  assets were impaired.  We recorded a
$29.3 million  impairment  charge  during the quarter ended March 31, 2002.  The
amount was comprised of $27.3 million of goodwill and $2.0 million of intangible
assets.

Intangible assets consist of the following (in thousands):
<TABLE>
<CAPTION>

                                           December 31, 2002                 March 31, 2003

                                      Gross                           Gross
                      Amortization   Carrying  Accumulated           Carrying  Accumulated
                        Period       Amount   Amortization  Net       Amount   Amortization   Net
                       ---------   ---------- ---------- ---------  ---------- ----------- ---------
<S>                     <C>            <C>         <C>      <C>         <C>          <C>      <C>
Intellectual property   4 years        $1,859      (465)    $1,394      $1,859       (582)    $1,277
                                   ========== ========== =========  ========== =========== =========
</TABLE>


Estimated future amortization expense is as follows (in thousands):

                                    Fiscal year                  Total
                                                                 -----
                   (Remaining nine months) 2003                $   347
                                           2004                    465
                                           2005                    465
                                                    ------------------
                             Total Amortization                $ 1,277
                                                    ==================

5. Restructuring

During January 2003, VINA announced and completed  restructuring  plans intended
to better align its operations with the changing market conditions.  These plans
were  designed  to  focus  on  profit  contribution  and  reduce  expenses.  The
restructuring    includes   a   workforce    reduction   and   other   operating
reorganizations.  As a result of the restructuring  efforts, the Company reduced
its  workforce  by  approximately  35%.  The  2003  restructuring  actions  were
accounted for in accordance with the guidance set forth in SFAS No. 146.

A summary of the  restructuring  benefit and  expenses for the month ended March
31, 2003 is as follows (in thousands):
<TABLE>
<CAPTION>

                                                   Stock
                                  Workforce     Compensation  Abandonment of
                                  Reductions      Benefits      Facilities     Total
      <S>                          <C>           <C>             <C>          <C>
      2002 remaining provision      $   -         $    -          $  98        $  98
      January 2003 provision          309           (336)             -          (27)
      Net provision utilized         (309)           336             98           71
                                    -----          -----          -----        -----
      Balance March 31, 2003        $   -          $   -          $   -        $   -
                                    =====          =====          =====        =====
</TABLE>


6. 2002 Stock Option Exchange Program

On February 17, 2003,  we granted  2,601,982  option grants as part of the Stock
Option Exchange  Program  approved by the Board of Directors in May 2002.  Under
this  program,  eligible  employees  were able to make an  election  to exchange

                                       10
<PAGE>

certain  outstanding  stock option grants with an exercise price greater than or
equal to $1.00 for a new option to  purchase  the same  number of shares of VINA
Technologies Inc. common stock. The replacement option was issued per the Option
Exchange Program at least six months and one day after the cancellation  date of
August 15, 2002. The new options were issued from our 2000 Stock Option Plan and
are non-statutory stock options.  The individuals  participating in this program
were employees of VINA  Technologies,  Inc. on the replacement grant date making
them  eligible  to  receive  the new stock  options.  No  consideration  for the
canceled stock options was provided to individuals  terminating employment prior
to the  replacement  grant date.  The new option has an exercise price of $0.16,
which is equal to VINA  Technologies  Inc.  Common stock's  closing price on the
date prior to the replacement grant. The new stock options will continue to vest
on the same schedule as the canceled options.

7. Commitments and Contingencies

The Company's  contract  manufacturer  has obtained or has on order  substantial
amounts of inventory to meet their revenue forecasts. If future shipments do not
utilize the committed inventory, the contract manufacturer has the right to bill
for any excess  component and finished goods  inventory.  The Company also has a
non-cancelable purchase order with a major chip supplier for one of its critical
components.  As of March  31,  2003,  the  estimated  purchase  commitments  and
non-cancelable  purchase orders to those companies is approximately $870,000. In
August  2002,  the Company  placed  $1.0  million on deposit  with its  contract
manufacturer as security against these purchase  commitments,  of which $600,000
was used in April 2003 to pay outstanding  balances.  The remaining  $400,000 is
still on deposit with its contract manufacturer.

As of March 31, 2003,  we have lease  commitments  of $1.8 million for leases on
two properties, which expire by July 31, 2007.

The Company  provides a full 60-month parts and factory labor  warranty  against
defects in materials and workmanship for all VINA Integrated Access Device (IAD)
product lines. A 12-month  parts and factory labor warranty  against  defects in
materials  and  workmanship  is provided for all VINA  Integrated  Multi-Service
Access Platform (IMAP) product lines. All VINA-supplied software is also covered
by a  60-month  warranty  for IAD  products,  and a 12-month  warranty  for IMAP
products.  The Company accounts for warranty liability by taking a charge in the
period of  shipment  for the  estimated  warranty  costs  that will be  incurred
related to shipments.  A weighted  average of the cost per warranty  transaction
per product line is developed taking into  consideration:  the costs of freight,
replacement,  rework and  repair.  Estimated  returns  over time are  calculated
taking  into  account  experience  by  product  line.  A warranty  liability  is
calculated  by  applying  the number of units  under  warranty  against a factor
representing  the  likelihood  of a return  and the  estimated  cost per  return
transaction.  Actual warranty  charges are tracked and reported  separately from
other transactions.

The changes in the warranty reserve balances during the three months ended March
31, 2003 and the year ended December 31, 2002 are as follows (in thousands):

Balance at January 1, 2002 ..........................   $ 696

Additions related to current period sales ...........     (18)

Warranty costs incurred in the current period .......    (228)

Adjustments to accruals related to prior period sales     (36)
                                                        -----
Balance at December 31, 2002
                                                          414

Additions related to current period sales ...........      (5)

Warranty costs incurred in the current period .......      (8)

Adjustments to accruals related to prior period sales      (1)
                                                        -----
Balance at March 31, 2003 ...........................   $ 400
                                                        -----

Certain of the Company's sales agreements require that the Company indemnify the
customer for any expenses or liabilities resulting from claimed infringements of
patents, trademarks or copyrights of third parties.


                                       11
<PAGE>

The high  technology  and  telecommunications  industry  in which we  operate is
characterized  by frequent claims and related  litigation  regarding  patent and
other  intellectual  property rights. We are not a party to any such litigation;
however any such  litigation in the future could have a material  adverse effect
on our consolidated operations and cash flows.

8. Subsequent Event

In April 2003, VINA received a letter from Larscom under which Larscom indicates
that it is reserving  its rights  arising from an alleged  breach by VINA of the
merger agreement. In its letter Larscom stated that, while reserving its rights,
it intends to work toward the  consummation of the merger.  VINA also intends to
work with Larscom toward the  consummation of the merger.  In that regard,  VINA
and Larscom  have filed with the  Securities  and Exchange  Commissions  a joint
proxy  statement/prospectus  on SEC Form S-4 in connection with the merger. VINA
and  Larscom  mailed the joint proxy  statement/prospectus  to  stockholders  of
Larscom and VINA on or about May 2, 2003. Under the merger agreement,  VINA made
a representation and warranty that its anticipated revenue for the first quarter
of 2003 would not be materially below $3.5 million. VINA's revenue for the first
quarter of 2003 was  approximately  $2.7 million.  Under the terms of the merger
agreement,  either party may terminate  the merger  agreement if a breach of any
representation or warranty, individually or in the aggregate, by the other party
has had or is reasonably  likely to have a material adverse effect on such party
as defined in the merger agreement. VINA does not believe that its first quarter
2003 revenue  shortfall  would  permit a  termination  of the merger  agreement,
because,  among other  things,  VINA's value cannot be measured by one quarter's
operating results.

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

     When used in this  report 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 extent of fluctuations
in gross margins, the adequacy of capital resources,  growth in operations,  the
satisfaction  of closing  conditions of the proposed  merger with  Larscom,  our
belief  that  failure  to achieve  certain  revenue  results  would not permit a
termination  of the merger  agreement  with  Larscom,  the ability to  integrate
companies and operations  that we may acquire,  expected  reduction of operating
costs, our ability to reach a cash flow break-even  position,  our strategy with
regard to  protecting  our  proprietary  technology,  the ability to compete and
respond to rapid  technological  change,  the extent to which we can develop new
products, expected customer concentration, ability to execute our business plan,
the ability to identify  and resolve  software  issues and related  applications
deficiencies of our Multiservice Broadband Exchange (MBX) product and the market
acceptance  of  the  MBX   products,   the  extent  to  which  we  can  maintain
relationships with vendors of emerging technologies,  the extent to which and at
what  rate  demand  for  our  services  increases,   the  extent  to  which  the
telecommunications industry experiences consolidation, our ability to expand our
international  operations and enter into new markets, the extent to which we and
our ability to actively participate in marketing, business development and other
programs,  the  extent to which we can  expand our field  sales  operations  and
customer support  organizations and build our infrastructure,  the extent we can
build market awareness of our company and our products,  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,  satisfaction of certain conditions to closing of the proposed
merger,  including the risk that stockholder approval might not be obtained in a
timely manner or at all, the ability to successfully integrate the two companies
and achieve expected synergies following the merger, the ability of the combined
company to develop and market  successfully and in a timely manner new products,
the risk that  Larscom  may  assert  that our  failure  to have $3.5  million in
revenue in the first  quarter of 2003 allows  Larscom to terminate  the proposed
merger,  the  effects  of  competition,   competitive  pricing  and  alternative
technological  advances,  the extent to which our  current  and future  products
compete  with  the  products  of  our   customers,   our  ability  to  implement
successfully  and achieve the goals of our  corporate  restructuring  plan,  our
ability to design,  market and  manufacture  successfully  products that address
market   demands,   our  ability  to   accurately   predict  our   manufacturing
requirements,  our ability to maintain  relationships  with  vendors of emerging
technologies,  changes in our business plans,  our ability to retain and attract
highly  skilled  engineers  for our research  and  development  activities,  our
ability to execute our  business  plan,  and the risks set forth  within Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations." These forward-looking  statements speak only as of the date hereof.
We expressly  disclaim any  obligation or  undertaking  to release  publicly any
updates or  revisions  to any  forward-looking  statements  contained  herein to

                                       12
<PAGE>

reflect  any change in our  expectations  with  regard  thereto or any change in
events, conditions or circumstances on which any such statement is based.

     This Form 10-Q  includes the  following  registered  trademarks  as well as
filed  applications  to  register  trademarks  of VINA  Technologies  including:
Integrator-300,   VINA,  VINA  Technologies,   Multiservice  Broadband  Xchange,
Multiservice Xchange, and MX-500. All other trademarks and trade names appearing
in this Form 10-Q are the  property of their  respective  holders;  for example,
SLC,  ConnectReach  and  AnyMedia  are  trademarks  and  trade  names of  Lucent
Technologies. The inclusion of other companies' brand names and products in this
Form 10-Q is not an endorsement of VINA.

     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  for the year ended  December 31,
2002.

     On March 17,  2003,  VINA,  Larscom  Incorporated,  a Delaware  corporation
("Larscom") and a wholly-owned subsidiary of Larscom,  entered into an Agreement
and Plan of Merger,  under which the Larscom subsidiary will merge with and into
VINA, followed by the merger of VINA with and into Larscom,  with Larscom as the
surviving  corporation.  As a result of the merger,  each issued and outstanding
share of VINA common  stock will be  automatically  converted  into the right to
receive  0.2659 of a  validly  issued,  fully  paid and  nonassessable  share of
Larscom  common  stock.  The merger is intended to be a tax-free  reorganization
under  Section 368 of the  Internal  Revenue  Code of 1986,  as amended,  and is
expected  to be treated as a purchase  for  financial  accounting  purposes,  in
accordance with generally accepted accounting principles.

     In April 2003,  VINA  received a letter from  Larscom  under which  Larscom
indicates that it is reserving its rights arising from an alleged breach by VINA
of the merger agreement.  In its letter Larscom stated that, while reserving its
rights,  it intends to work toward the  consummation  of the  merger.  VINA also
intends to work with  Larscom  toward the  consummation  of the merger.  In that
regard, VINA and Larscom have filed with the Securities and Exchange Commissions
a joint  proxy  statement/prospectus  on SEC  Form  S-4 in  connection  with the
merger.  VINA  and  Larscom  mailed  the  joint  proxy  statement/prospectus  to
stockholders  of  Larscom  and VINA on or about May 2,  2003.  Under the  merger
agreement,  VINA made a representation and warranty that its anticipated revenue
for the first quarter of 2003 would not be materially below $3.5 million. VINA's
revenue for the first quarter of 2003 was approximately $2.7 million.  Under the
terms of the merger  agreement,  either party may terminate the merger agreement
if a breach of any representation or warranty, individually or in the aggregate,
by the other party has had or is  reasonably  likely to have a material  adverse
effect on such party as defined in the merger  agreement.  VINA does not believe
that its first quarter 2003 revenue  shortfall would permit a termination of the
merger agreement,  because,  among other things, VINA's value cannot be measured
by one quarter's operating results.

     The  consummation  of  the  merger  is  subject  to  the  approval  of  the
stockholders  of VINA and Larscom,  SEC  clearance and other  customary  closing
conditions.  There can be no assurance  that all the closing  conditions  to the
merger  will be met and the  merger  will  be  completed.  A copy of the  merger
agreement  and  the  exhibits  to the  merger  agreement  were  filed  with  the
Securities and Exchange  Commission on a Current Report on Form 8-K on March 20,
2003.



                                       13
<PAGE>

Overview

     VINA  Technologies,  Inc. 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  shipping  our
Multiservice  Integrator-300  product  family in March  1997,  our  Multiservice
Xchange  product in May 1999, our eLink product family in November 2000, and our
MBX product in September 2001.  Since  inception,  we have incurred  significant
losses,  and as of March  31,  2003,  we had an  accumulated  deficit  of $180.5
million.

     We market and sell our  products and  services  directly to  communications
service providers and through OEM customers and value-added resellers,  or VARs.
We recognize revenue 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.  Product revenue is generated from the
sale of communications equipment embedded with software that is essential to its
functionality,  and accordingly, we account for these transactions in accordance
with SEC  Staff  Accounting  Bulletin  (SAB) No.  101,  Revenue  Recognition  in
Financial  Statements,  and Statement of Position (SOP) 97-2,  Software  Revenue
Recognition.  Product  revenue is  recognized  when all SAB No. 101 and SOP 97-2
criteria are met which  generally  occurs at the time of  shipment.  In multiple
element  arrangements  where  there  are  undelivered  elements  at the  time of
shipment,  product revenue is recognized at the time of shipment as the residual
value of the  arrangement  after  allocation  of fair  value to the  undelivered
elements based on vendor specific objective evidence (VSOE).  Service revenue is
generated  from the sale of  installation,  training and  postcontract  customer
support  (PCS)  agreements  related  to the  communications  equipment.  We also
account for these  transactions in accordance with SAB No. 101 and SOP 97-2, and
as such recognizes revenue when all of the related revenue recognition  criteria
are met  which is:  (i) at the time the  installation  or  training  service  is
delivered;  and (ii)  ratably  over the term of the PCS  agreement.  In multiple
element   arrangements   where  these   services   are   undelivered   when  the
communications   equipment  is  shipped,  we  defer  the  fair  value  of  these
undelivered  elements  based on VSOE and  recognize  revenue as the services are
delivered.  We  additionally  record a provision for estimated sales returns and
warranty costs at the time the product revenue is recognized.

     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 year  ended  December  31,  2002,  sales to our three  largest
customers  accounted for approximately 71% of our net revenue, of which sales to
Allegiance Telecom, Lucent Technologies, and Nuvox Communications, accounted for
37%, 18% and 16% of our net revenue,  respectively.  While the level of sales to
any specific  customer is anticipated  to vary from period to period,  we expect
that we will continue to experience  significant customer  concentration for the
foreseeable future. Any decrease in sales or reduced pricing on products sold to
these   customers  will   substantially   reduce  our  net  revenue.   To  date,
international  sales have not been  significant.  International  sales have been
denominated primarily 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.  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  manufacturer  and the mix of products or system  configurations  sold.
Additionally,  our gross  margin  may  fluctuate  due to  changes  in our mix of

                                       14
<PAGE>

distribution channels. Currently, we derive a significant portion of our revenue
from sales made to our OEM customers. A significant increase in revenue to these
OEM customers would adversely affect our gross margin percentage.

     Research and  development  expenses  consist  primarily  of  personnel  and
related costs,  depreciation expenses and prototype costs related to the design,
development,  testing and enhancement of our 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
professional costs and exclude amortization of deferred stock compensation.

     Stock-based  compensation  consists  of the fair  value  of  stock  options
granted to  non-employees  for services and the  amortization  of deferred stock
compensation on stock options granted to employees.

     Other 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.

     From  inception  through  December  31,  2002,  we incurred  net losses for
federal and state  income tax purposes  and have not  recognized  any income tax
provision or benefit.  As of December 31, 2002,  we had $98.0 million of federal
and $36.0  million of state net operating  loss carry  forwards to offset future
taxable  income  that  expire  in  varying   amounts   through  2022  and  2014,
respectively.  Given our limited  operating history and losses incurred to date,
coupled  with  difficulty  in  forecasting  future  results,  a  full  valuation
allowance  has been  provided  against  deferred tax assets.  Furthermore,  as a
result of changes in our equity ownership from our preferred stock offerings and
initial public offering, utilization of net operating losses and tax credits may
be  subject  to  substantial  annual  limitations  due to the  ownership  change
limitations  as defined by Section 382 of the Internal  Revenue Code and similar
state  provisions.  The annual  limitation  may result in the  expiration of net
operating losses and tax credits before utilization.

Critical Accounting Policies

     Our  discussion  and  analysis of our  financial  condition  and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with generally accepted accounting principles. We believe
the  following  critical  accounting  policies,  among  others,  affect the more
significant  judgments and estimates  used in the  preparation  of our financial
statements:

     Revenue  Recognition - We recognize revenue 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.
Product revenue is generated from the sale of communications  equipment embedded
with  software  that is  essential to its  functionality,  and  accordingly,  we
account for these transactions in accordance with SEC Staff Accounting  Bulletin
(SAB) No. 101,  Revenue  Recognition in Financial  Statements,  and Statement of
Position (SOP) 97-2, Software Revenue Recognition.

     Product  revenue is  recognized  when all SAB No. 101 and SOP 97-2 criteria
are met, which  generally  occurs at the time of shipment.  In multiple  element
arrangements  where  there are  undelivered  elements  at the time of  shipment,
product  revenue is recognized at the time of shipment as the residual  value of
the arrangement after allocation of fair value to the undelivered elements based
on vendor specific objective evidence (VSOE).

     Service  revenue is generated from the sale of  installation,  training and
post contract  customer support (PCS) agreements  related to the  communications
equipment. We also account for these transactions in accordance with SAB No. 101
and SOP 97-2,  and as such  recognize  revenue  when all of the related  revenue
recognition  criteria  are met  which  is (i) at the time  the  installation  or
training  service  is  delivered;  and  (ii)  ratably  over  the term of the PCS
Agreement,  respectively.  In multiple element arrangements where these services
are undelivered when the communications  equipment is shipped, we defer the fair

                                       15
<PAGE>

value of these  undelivered  elements based on VSOE and recognize revenue as the
services are delivered.  We also record a provision for estimated  sales returns
and warranty costs at the time the product revenue is recognized.

     Allowance for Doubtful Accounts - We continuously  monitor  collections and
payments from our customers and maintain a provision for estimated credit losses
based upon the age of outstanding  invoices and any specific customer collection
issues that we have identified.  Since our accounts  receivable are concentrated
in a relatively few number of customers,  a significant  change in the financial
position of any one of these customers  could have a material  adverse impact on
the  collectability  of  our  accounts  receivable,  which  would  require  that
additional allowances be recorded.

     Inventory  Reserves - We regularly review the volume and composition of our
inventory on hand and compare it to our estimated forecast of product demand and
production  requirements.  We record write downs for estimated  obsolescence  or
unmarketable  inventory  for the  difference  between the cost and the estimated
market  value  based  upon  these  reviews.  If actual  future  demand or market
conditions are less favorable than our estimates,  then  additional  write-downs
may be required.

     On  January 1,  2003,  we  adopted  SFAS No.  146,  which  requires  that a
liability  for a cost  associated  with an exit or disposal  activity  initiated
after  December 31, 2002 be  recognized  when the liability is incurred and that
the  liability  be measured at fair  value.  During  2002,  the  accounting  for
restructuring  costs required us to record  provisions and charges when we had a
formal and  committed  plan. In  connection  with these plans,  we have recorded
estimated expenses for severance and outplacement  costs,  lease  cancellations,
asset  write-offs and other  restructuring  costs.  We continually  evaluate the
adequacy  of the  remaining  liabilities  under our  restructuring  initiatives.
Although we believe  that these  estimates  accurately  reflect the costs of our
restructuring  plans, actual results may differ,  thereby requiring us to record
additional provisions or reverse a portion of such provisions.

     We perform  impairment  tests on our intangible  assets  whenever events or
changes  in  circumstances   indicate  that  its  carrying  amount  may  not  be
recoverable in accordance with the guidance in Statement of Financial Accounting
Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
("SFAS No. 144"). We recognize  impairment  losses if the carrying amount of the
intangible  asset is not  recoverable  and exceeds its fair value.  The carrying
amount of a  long-lived  asset is not  recoverable  if it exceeds the sum of the
undiscounted cash flows we expect to result from our use of the asset.

     Stock-based  compensation  - The Company  accounts for employee stock plans
under the  intrinsic  value method  prescribed by  Accounting  Principles  Board
Opinion ("APB") No. 25, Accounting for Stock Issued to Employees,  and Financial
Accounting Standards Board Interpretation ("FIN") No. 44, Accounting for Certain
Transactions  Involving Stock Compensation (an Interpretation of APB No. 25) and
has adopted the  disclosure-only  provisions  of SFAS No.  123,  Accounting  for
Stock-Based  Compensation.  The Company  accounts for  stock-based  compensation
relating to equity instruments  issued to non-employees  based on the fair value
of options or warrants  estimated using the  Black-Scholes  model on the date of
grant in compliance  with the Emerging  Issues Task Force No. 96-18,  Accounting
for Equity Instruments that are issued to Other than Employees for Acquiring, or
in Conjunction with Selling,  Goods or Services.  Compensation expense resulting
from  non-employee  options is amortized  using the multiple  option approach in
compliance with FIN No. 28, Accounting for Stock  Appreciation  Rights and Other
Variable Stock Option or Award Plans.

Results of Operations

     Three Months Ended March 31, 2003 and 2002

     Net  revenue.  Net revenue  decreased  to $2.7 million for the three months
ended March 31,  2003 from $6.4  million  for the three  months  ended March 31,
2002.  This decrease in net revenue was primarily due to decreased unit sales to
existing  customers and lower average selling prices on our  Integrator-300  and
eLink products and to the significant decline in orders from Allegiance Telecom,
our top customer in 2002. Net revenue  attributable  to Allegiance for the first
three  months of 2003 was  $33,000,  compared  to $2.7  million  of  direct  and
indirect net revenue in the first three months of 2002.  Allegiance  has advised
us that it is pursuing a two vendor  strategy in the  integrated  access  device

                                       16
<PAGE>

product  category,  which will reduce our opportunity for sales to Allegiance in
future periods and will create additional  competitive  pricing pressures.  As a
result, we did not expect to receive any significant  revenue from Allegiance in
the first quarter of 2003 as Allegiance began purchasing from the second vendor.
We expect our net revenue from Allegiance in 2003 to decrease significantly from
2002  levels.  The  decline  in net  revenue  in the first  quarter  of 2003 was
primarily due to decreased unit sales of  Integrator-300  and MX-500 products to
existing customers.

     Cost  of  revenue.  Cost  of  revenue  including  stock-based  compensation
decreased  to $1.7  million for the three  months ended March 31, 2003 from $6.3
million for the three months ended March 31, 2002.  This decrease is a result of
lower net revenue in the first three months ended March 31, 2003, as compared to
the first three  months ended March 31,  2002.  Gross  profit  increased to $1.0
million for the three  months  ended March 31, 2003 from  $156,000 for the three
months ended March 31, 2002. This increase is a result of less excess  inventory
charges in the three  months  ended  March 31,  2003,  as  compared to the three
months  ended  March 31,  2002.  Gross  profit as a  percentage  of net  revenue
increased  to 38% in the first  quarter of 2003 from 2% in the first  quarter of
2002.  This  increase is primarily a result of lower excess  inventory  costs in
three months ended March 31, 2003.

     Research  and  development  expenses.  Research  and  development  expenses
including  stock-based  compensation  decreased  to $1.8  million  for the three
months  ended March 31, 2003 from $5.8  million for the three months ended March
31, 2002. These decreases were primarily a result of decreased  personnel costs,
and to a lesser extent prototype and stock-based compensation expenses. Research
and  development  expenses  including  stock-based  compensation  decreased as a
percentage of net revenue to 68% in the first quarter of 2003 compared to 90% in
the first  quarter of 2002.  The decrease from 2002 to 2003 was primarily due to
net revenue decreasing at a lesser rate than expenses.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses including  stock-based  compensation  decreased to $1.9
million for the three  months  ended  March 31,  2003 from $5.9  million for the
three months ended March 31, 2002.  This decrease was primarily  attributable to
decreased  personnel  costs,  as  well  as  decreased  stock-based  compensation
expenses.  Selling,  general and administrative  expenses including  stock-based
compensation  increased  as a  percentage  of net  revenue  to 71% for the first
quarter of 2003 compared to 90% for the first quarter of 2002. The decrease from
2002 to 2003 was primarily  due to net revenue  decreasing at a lesser rate than
expenses.

     Stock-based  compensation.  Stock-based  compensation benefit for the three
months  ended  March  31,  2003  was  $324,000  as  compared  to  a  stock-based
compensation  expense of $1.7 million for the three months ended March 31, 2002.
This  decrease  was due  primarily  to the  reversal of prior  period  estimated
stock-based compensation expense on forfeited stock options.

     Goodwill and intangible assets. As VINA operates in one reportable segment,
the design,  development,  marketing and sale of multi-service  broadband access
communications  equipment,  and has only one reporting unit, VINA  consolidated,
the measurement of the fair value for our goodwill is our market capitalization.
The deterioration of the telecom industry and the decline in our current product
sales in the first quarter of 2002 required us to evaluate the fair value of the
company's goodwill.  We evaluated the fair value of our company as determined by
our market capitalization against our carrying value, net assets, and determined
that  goodwill  was  impaired  and we  recorded  a charge of $27.3  million  for
impairment  of goodwill.  In addition,  under SFAS No. 144  "Accounting  for the
Impairment of Disposal of Long-Lived Assets", we evaluated our intangible assets
for impairment  and determined a portion of the intangible  assets were impaired
and we recorded a charge of $2.0 million for  impairment of  intangible  assets.
Amortization  expense  in the  first  three  months  ended  March  31,  2003 was
$116,000.

     Restructuring  expenses.  Restructuring  expenses,  excluding the impact of
stock-based compensation,  of $309,000 for the three months ended March 31, 2003
resulted primarily from severance and outplacement  costs.  Including the impact
of stock-based compensation,  we recorded a net restructuring benefit of $27,000
for the three months ended March 31, 2003.


                                       17
<PAGE>


     Liquidity and Capital Resources

     Cash and cash equivalents at March 31, 2003 were $2.7 million,  compared to
$4.6 million at December 31, 2002. The decrease of $1.9 million was attributable
to cash used in operating  activities of $2.1 million offset by cash provided by
financing  activities  of $183,000.  Cash provided by financing  activities  was
attributable  to  the  release  of  restricted  cash.  Cash  used  by  financing
activities  was  attributable  to  payment  of  short-term  debt.  Cash  used in
operating  activities consists primarily of net loss of $2.8 million, a decrease
in  accounts  payable  of $1.1  million,  a  decrease  in other  liabilities  of
$383,000, partially offset by a $1.7 million decrease in accounts receivable and
a $1.3 million decrease in prepaid expenses and other.

     Our contract  manufacturer has obtained or has on order substantial amounts
of inventory to meet our revenue  forecasts.  If future shipments do not utilize
the committed inventory,  the contract manufacturer has the right to bill us for
any excess component and finished goods inventory. We also have a non-cancelable
purchase order with a major chip supplier for one of our critical components. As
of March  31,  2003,  the  estimated  purchase  commitments  and  non-cancelable
purchase orders to those companies was $870,000.  In August 2002, we placed $1.0
million on deposit  with our contract  manufacturer  as security  against  these
purchase  commitments,  of  which  $600,000  was  used  in  April  2003  to  pay
outstanding  balances.  The  remaining  $400,000  is still on  deposit  with our
contract manufacturer.

     We also have an  irrevocable  letter of credit of $333,000  that is used as
collateral for the lease on the Newark, California facility.

     We  currently  have lease  commitments  of $1.8  million  for leases on two
properties,  which expire by July 30, 2007. Future annual  obligations under our
operating leases are as follows: $259,000 in 2003; $337,000 in 2004; $430,000 in
2005; $491,000 in 2006; $292,000 in 2007.

     In February  2003, we  established an asset secured credit line with a bank
for up to $3.5 million.  We need to meet monthly  covenants to be able to borrow
against  this  credit  line and can meet them  currently.  The credit line has a
one-year  duration  and  terms of prime  plus 2%. We  currently  do not have any
outstanding balance on this credit line.

     Our intent is to complete the  announced  merger with Larscom in the second
quarter.  If we are  unsuccessful  in  completing  the merger  during the second
quarter,  then we will need to  obtain  additional  funding  during  the  second
quarter of 2003 to continue operations. We will from time to time review and may
pursue additional financing opportunities,  including sales of additional equity
or debt securities,  or utilizing our credit line. 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. Further,  our recent transfer from the Nasdaq
National  Market to the Nasdaq  SmallCap  Market may make it even more difficult
for us to raise funds. The factors described above raise substantial doubt as to
our ability to continue as a going concern for the foreseeable future.

     On March 17, 2003, VINA, Larscom and a Larscom subsidiary,  entered into an
Agreement and Plan of Merger pursuant to which the Larscom subsidiary will merge
with and into VINA,  followed by the merger of VINA with and into Larscom,  with
Larscom as the surviving corporation. As a result of the merger, each issued and
outstanding share of VINA common stock will be automatically  converted into the
right to receive 0.2659 of a validly issued,  fully paid and nonassessable share
of Larscom common stock. The merger is intended to be a tax-free  reorganization
under  Section 368 of the  Internal  Revenue  Code of 1986,  as amended,  and is
expected  to be treated as a purchase  for  financial  accounting  purposes,  in
accordance with generally accepted accounting principles.

     In April 2003,  VINA  received a letter from  Larscom  under which  Larscom
indicates that it is reserving its rights arising from an alleged breach by VINA
of the merger agreement.  In its letter Larscom stated that, while reserving its
rights,  it intends to work toward the  consummation  of the  merger.  VINA also
intends to work with  Larscom  toward the  consummation  of the merger.  In that
regard, VINA and Larscom have filed with the Securities and Exchange Commissions

                                       18
<PAGE>

a joint  proxy  statement/prospectus  on SEC  Form  S-4 in  connection  with the
merger.  VINA  and  Larscom  mailed  the  joint  proxy  statement/prospectus  to
stockholders  of  Larscom  and VINA on or about May 2,  2003.  Under the  merger
agreement,  VINA made a representation and warranty that its anticipated revenue
for the first quarter of 2003 would not be materially below $3.5 million. VINA's
revenue for the first quarter of 2003 was approximately $2.7 million.  Under the
terms of the merger  agreement,  either party may terminate the merger agreement
if a breach of any representation or warranty, individually or in the aggregate,
by the other party has had or is  reasonably  likely to have a material  adverse
effect on such party as defined in the merger  agreement.  VINA does not believe
that its first quarter 2003 revenue  shortfall would permit a termination of the
merger agreement,  because,  among other things, VINA's value cannot be measured
by one quarter's operating results.

     The  consummation  of  the  merger  is  subject  to  the  approval  of  the
stockholders  of VINA and Larscom,  SEC  clearance and other  customary  closing
conditions.  There can be no assurance  that all the closing  conditions  to the
merger  will be met and the  merger  will  be  completed.  A copy of the  merger
agreement  and the  exhibits  to the  merger  agreement,  were  filed  with  the
Securities and Exchange  Commission on a Current Report on Form 8-K on March 20,
2003.


                         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 the Proposed Merger with Larscom

Our business could suffer in response to the announcement of our proposed merger
with Larscom.

     The  announcement  of our proposed  merger with Larscom may have a negative
impact on our ability to sell our products and services,  attract and retain key
management,  development or other personnel, maintain and attract new customers,
and maintain  strategic  relationships  with third  parties.  For  example,  our
customers may, in response to the announcement of the proposed merger,  delay or
defer  purchasing  decisions.   If  our  customers  delay  or  defer  purchasing
decisions, our revenue could materially decline. Also, speculation regarding the
likelihood of the closing of the merger could  increase the volatility of VINA's
share prices. In addition,  our employees may experience uncertainty about their
future role with Larscom. If the merger is not completed,  we could be harmed by
these adverse changes in our business or the  expectation of these changes,  and
restoring our business to its pre-announcement  value could take a long time and
be costly, and may not occur.

While  Larscom's and VINA's share prices have been  volatile in recent  periods,
the merger  exchange ratio is fixed and no adjustment to the exchange ratio will
be made as a result of  fluctuations  in the  market  prices of  Larscom or VINA
common stock.

     Larscom's  stock price has been volatile in the past and may continue to be
volatile in the future.  On completion  of the merger,  each share of our common
stock  will be  exchanged  for 0.2659 of a share of Larscom  common  stock.  The
exchange  ratio will not change  even if the market  price of either or both the
VINA common stock and Larscom  common  stock  fluctuates.  In addition,  neither
party may  withdraw  from the merger or resolicit  the vote of its  stockholders
solely  because of changes in the market  price of VINA common  stock or Larscom
common  stock.  Any  reduction  in  Larscom's  stock  price will  result in VINA
stockholders  receiving less value in the merger at closing. The specific dollar
value of Larscom common stock that VINA  stockholders will receive on completion
of the merger will depend on the market  value of Larscom  common  stock at that
time.  Stockholders  will not know the exact value of Larscom common stock to be
issued to VINA stockholders in the merger until the merger has been completed.

During the  pendency of the merger,  VINA may not be able to enter into a merger
or business  combination  with  another  party at a favorable  price  because of
restrictions in the merger agreement.


                                       19
<PAGE>

     Covenants  in the merger  agreement  may impede the ability of VINA to make
acquisitions or complete other  transactions that are not in the ordinary course
of business pending  completion of the merger. As a result, if the merger is not
completed,  we may be at a disadvantage to our competitors.  In addition,  while
the  merger  agreement  is in  effect  and  subject  to  very  narrowly  defined
exceptions,  we are  prohibited  from  soliciting,  initiating,  encouraging  or
entering  into certain  extraordinary  transactions,  such as a merger,  sale of
assets or other business  combination  outside the ordinary  course of business,
with  any  third  party.  Any  such  transactions  could  be  favorable  to  our
stockholders.

Failure to complete the merger may result in VINA paying a  termination  fee and
could harm VINA's common stock price and future business and operations.

     If the merger is not completed, VINA may be subject to the following risks:

     o    if the merger  agreement is terminated  under  certain  circumstances,
          VINA will be  required  to pay the other  party a  termination  fee of
          $185,000;

     o    the price of VINA  common  stock may  decline to the  extent  that the
          current market price of VINA common stock reflects a market assumption
          that the merger will be completed; and

     o    costs  related to the merger,  such as legal,  accounting  and certain
          financial  advisory  fees,  must be paid  even  if the  merger  is not
          completed.

     In  addition,  if the merger  agreement is  terminated  and VINA's board of
directors determines to seek another merger or business  combination,  there can
be no  assurance  that it will be  able  to  find a  partner  willing  to pay an
equivalent or more attractive price than the price to be paid in the merger.

VINA and Larscom may not realize the benefits they expect from the merger.

     The  integration  of Larscom and VINA will be complex,  time  consuming and
expensive and may disrupt Larscom's and VINA's businesses.  The combined company
will need to overcome significant challenges in order to realize any benefits or
synergies from the merger.  These challenges  include the timely,  efficient and
successful execution of a number of post-merger events, including:

     o    integrating the operations and technologies of the two companies;

     o    retaining and assimilating the key personnel of each company;

     o    retaining   existing   customers  of  both  companies  and  attracting
          additional customers;

     o    retaining  strategic  partners  of each  company  and  attracting  new
          strategic partners; and

     o    creating  uniform  standards,  controls,   procedures,   policies  and
          information systems.

The execution of these post-merger  events will involve  considerable  risks and
may not be successful. These risks include:

     o    the potential  disruption of the combined  company's  ongoing business
          and distraction of its management;

     o    the  potential  strain  on  the  combined   company's   financial  and
          managerial controls and reporting systems and procedures;

     o    unanticipated  expenses and potential delays related to integration of
          the operations, technology and other resources of the two companies;

     o    the  impairment  of  relationships   with  employees,   suppliers  and

                                       20
<PAGE>

          customers as a result of any integration of new management personnel;

     o    greater than anticipated  costs and expenses related to restructuring,
          including  employee severance or relocation costs and costs related to
          vacating leased facilities; and

     o    potential  unknown  liabilities  associated  with the  merger  and the
          combined operations.

     The combined company may not succeed in addressing these risks or any other
problems   encountered  in  connection   with  the  merger.   The  inability  to
successfully  integrate the operations,  technology and personnel of Larscom and
VINA, or any significant delay in achieving  integration,  could have a material
adverse effect on the combined company after the merger and, as a result, on the
market price of Larscom's common stock.

The cost of the merger could harm the financial results of the combined company.

     VINA and Larscom expect to incur  transaction  costs of approximately  $2.0
million in  connection  with the  merger.  If the  benefits of the merger do not
exceed the associated costs, including costs associated with integrating the two
companies and dilution to Larscom's  stockholders resulting from the issuance of
shares in connection with the merger, the combined company's  financial results,
including earnings per share, could be materially harmed.

The  merger  could  cause VINA or Larscom  to lose key  personnel,  which  could
materially  affect  the  combined  company's  business  and  require it to incur
substantial costs to recruit replacements for lost personnel.

     As a result  of the  merger,  current  and  prospective  VINA  and  Larscom
employees could experience  uncertainty about their future roles within Larscom.
This uncertainty may adversely affect the ability of VINA and Larscom to attract
and  retain  key  management,  sales,  marketing  and  technical  personnel.  In
addition, in connection with the merger,  certain current employees of VINA will
be entitled to  acceleration  of vesting of stock  options,  which may adversely
affect the ability of the combined  company to retain such  employees  following
the merger. Further, in connection with the merger, certain employees of Larscom
may be entitled to acceleration of vesting of stock and stock options, which may
adversely  affect the ability of the combined  company to retain such  employees
following the merger. Any failure to attract and retain key personnel could have
a material adverse effect on the business of Larscom and VINA.

Larscom has alleged a breach of the terms of the merger agreement by VINA.

     VINA has received a letter from Larscom, under which Larscom indicates that
it is  reserving  its  rights  arising  from  an  alleged  breach  by  VINA of a
representation  and  warranty  under the  merger  agreement.  Under  the  merger
agreement,  VINA made a representation and warranty that its anticipated revenue
for the first quarter of 2003 would not be materially below $3.5 million. VINA's
revenue for the first quarter of 2003 was approximately $2.7 million.  Under the
terms of the merger  agreement,  either party may terminate the merger agreement
if a breach of any representation or warranty, individually or in the aggregate,
by the other party has had or is  reasonably  likely to have a material  adverse
effect on such party as defined in the merger agreement.

The merger may be completed even though material adverse changes may result from
the announcement of the merger, industry-wide changes and other causes.

     In general,  either  party can refuse to complete  the merger if there is a
material  adverse change  affecting the other party between the date of signing,
March 17, 2003,  and the  closing.  However,  certain  types of changes will not
prevent  the  merger  from  going  forward,  even if they  would have a material
adverse effect on Larscom or VINA, including:

     o    changes  resulting  from  any  failure  by a party  to meet or  exceed
          analysts' published revenues or earnings  predictions or any change in
          a party's stock price or trading volume, in and of itself;

     o    with  some  limited   exceptions,   any  changes  resulting  from  the

                                       21
<PAGE>

          announcement or pendency of the merger  agreement or the merger,  or

     o    with some limited exceptions, changes affecting generally the industry
          or industries  in which a party  participates,  the U.S.  economy as a
          whole or foreign economies in any locations where a party has material
          operations  or  sales,   unless  such   condition   disproportionately
          adversely affects a party.


If adverse  changes  occur but Larscom and VINA must still  complete the merger,
Larscom's  stock  price may  suffer.  This in turn may  reduce  the value of the
merger to Larscom and VINA stockholders.

                          Risks Related To Our Business

We will need to obtain  additional  funding during second quarter of 2003. If we
are unable to raise more capital,  we may not have sufficient  funds to continue
operations.

     During  the  year  ended  December  31,  2002,  we used  cash in  operating
activities  of  $20.3  million.  As of  March  31,  2003,  we had  cash and cash
equivalents of $2.7 million and an accumulated deficit of $180.5 million. If the
merger  with  Larscom  is not  consummated,  we will need to  obtain  additional
funding  during  the  second  quarter of 2003.  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. Our recent move from the Nasdaq  National  Market to
the  Nasdaq  SmallCap  Market  may make it even more  difficult  for us to raise
funds. If we are unable to raise additional capital, we will not have sufficient
funds to continue operations.

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  would  decline and our
operating results and business would 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,  one of our original  equipment  manufacturers,  or OEM, customers
that sell and market 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  would  decline and our
operating results and business would be harmed.  For the year ended December 31,
2002, sales to our three largest  customers  accounted for  approximately 71% of
our net revenue, of which sales to Allegiance  Telecom,  Lucent Technologies and
Nuvox  Communications  accounted  for  37%,  18%  and  16% of our  net  revenue,
respectively.  We believe that we have been the primary  supplier of  integrated
access  devices to Allegiance in the past.  Allegiance has advised us that it is
now pursuing a two vendor strategy in this product  category,  which will reduce
our  opportunity  for sales to  Allegiance  in future  periods  and will  create
additional  competitive  pricing  pressures.  As a result,  we did  receive  any
significant  revenue from  Allegiance in the first quarter of 2003 as Allegiance
began  purchasing  from the second  vendor,  and we expect our net revenue  from
Allegiance in 2003 to decrease  significantly from 2002 levels. Our concentrated
customer base continues to expose us to risks  resulting from potential  adverse
changes in these  relationships and risks resulting from the financial condition
of these customers.

     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.  Also,  the  ultimate
business success of our direct service provider customers, our OEM customers and
value added  resellers,  or VARs,  and our indirect  customers  who purchase our
products  through  an OEM  customer  and VARs,  could  affect the demand for our
products.  For example,  Advanced Telecom Group, one of our largest customers in
2001, declared bankruptcy in May 2002, and we are no longer shipping any product

                                       22
<PAGE>

to them. In addition,  any difficulty in collecting amounts due from one or more
of our key customers would harm our operating  results and financial  condition.
If any of these  events  occur,  our  operating  results and  business  would be
harmed.

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

     To date,  we have sold the  majority of our products to  competitive  local
exchange  carrier,  or CLEC,  customers,  either  directly  or  through  our OEM
customers.  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.  For example,  our CLEC  customer,
Advanced  Telecom  Group,  recently  filed  for  bankruptcy  protection.  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.

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  $17.1 million in 1999,  $43.3
million in 2000,  $48.6  million in 2001 and $55.4  million in 2002. As of March
31, 2003, we had an accumulated  deficit of  approximately  $180.5  million.  To
achieve  profitability,  we will need to generate and sustain higher net revenue
while lowering our cost and expense levels.

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 would be adversely affected for that quarter.

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.

     Competitive  pressures have forced us to reduce the prices of our products.
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.

We  depend  upon a  single  contractor  for  most  of our  manufacturing  needs.
Termination of this relationship  could impose significant costs on us and could

                                       23
<PAGE>

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 to build our products.  Currently,
our primary contract manufacturer is Benchmark Electronics.  Under our agreement
with  Benchmark,  Benchmark  may cancel the  contract on short notice and is not
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,  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  our  agreement  or
relationship  with  Benchmark  is  terminated,   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.

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.  For example,  under our OEM agreement with Lucent  Technologies,
Lucent 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.  For  example,  Lucent may be
required to maintain a significant  inventory of our products for longer periods
than they originally  anticipated,  which would reduce future  purchases.  These
reductions,  in  turn,  could  cause  fluctuations  in  our  future  results  of
operations and severely harm our business and financial condition.

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 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.

                                       24
<PAGE>

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  customers,  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. Development costs and expenses are incurred before we generate any
net revenue 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 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
four to six 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. Our contract  manufacturer  has obtained
or has on order substantial  amounts of inventory to meet our revenue forecasts.
If future  shipments  do not  utilize  the  committed  inventory,  the  contract
manufacturer  has the right to bill us for any  excess  component  and  finished
goods inventory.  We also have a non-cancelable purchase order with a major chip
supplier for one of our critical components. As of March 31, 2003, the estimated
purchase  commitments and  non-cancelable  purchase orders to those companies is
approximately  $870,000.  In August 2002, we placed $1.0 million on deposit with
our contract  manufacturer as security  against these purchase  commitments,  of
which $600,000 was used in April 2003 to pay outstanding balances. The remaining
$400,000 is still on deposit with our contract manufacturer.  If we overestimate
our  manufacturing   requirements,   demand  for  our  products  is  lower  than
forecasted,  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 and in March 2002 we expensed $1.7 million for excess inventory. 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-offs. 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,  which  could  negatively  affect our net  revenue in such
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 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,
some of 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. For example,  following deployment of our MBX, products it was
discovered  that the MBX failed to meet all of its  specified  applications.  We
then temporarily suspended deployment of the MBX. The MBX is now fully available
to customers for all  applications.  There can be no assurance  that  additional
defects or errors may not arise or be discovered in the future. 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.

                                       25
<PAGE>

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,  one of our  OEM  customers.  Our  agreement  with  Lucent  is not
exclusive and does not contain minimum volume  commitments.  Lucent Technologies
accounted for  approximately  18% of our net revenue for the year ended December
31, 2002.  Our OEM agreement with Lucent expires in May 2003, and we can give no
assurances that we will be able to extend the term of our contract or enter into
a new contract with Lucent.  Lucent may terminate the agreement  earlier upon 60
days notice.  At any time or after a short period of notice,  Lucent could elect
to cease  marketing and selling our products.  They may so elect for a number of
reasons,  including the  acquisition by Lucent 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 Lucent, which
may also harm our relationships with this customer. For example, our MBX product
may compete with products offered by our OEM customers,  including Lucent, which
could  adversely  affect  our  relationship  with that  customer.  Our  existing
relationship  with  Lucent  could  make it harder  for us to  establish  similar
relationships  with  Lucent's  competitors.   Any  loss,  reduction,   delay  or
cancellation in expected sales to our OEM customers, the inability to extend our
contract or enter into a new contract with Lucent on favorable  terms would hurt
our  business  and our  ability to  increase  net  revenue  and could  cause our
quarterly results to fluctuate significantly.

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

     A customer's decision to purchase our products,  in particular with our MBX
product,  often involves a significant commitment of its resources and a lengthy
evaluation and product qualification  process. Our sales cycle varies from a few
months to over a 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.

                                       26
<PAGE>

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.  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.

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. 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 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.

The competition for qualified  personnel has been 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 has been strong in our
industry  and in Northern  California,  where there is a high  concentration  of
established and emerging growth  technology  companies.  This competition  could
make it more  difficult  to retain our key  personnel  and to recruit new highly
qualified  personnel.  Our Chief  Executive  Officer  resigned April 1, 2002. W.
Michael  West,  Chairman of the Board of  Directors,  has been  appointed  Chief
Executive Officer. In addition,  our Vice President of Business  Development and

                                       27
<PAGE>

Marketing Communications and our Vice President of Human Resources both resigned
in January  2003.  We  currently  are not  planning on  re-hiring  for these two
positions.  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.  These
payments  could harm our  operating  results.  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 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 four U.S. patent applications pending, and one patent
issued.  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.  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,  result in costly  litigation  and  divert  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.

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.


                                       28
<PAGE>

     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.

Because our headquarters are located in Northern  California,  which is a region
containing active  earthquake  faults, 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.

        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  Adtran,
Alcatel,  Carrier  Access  Corporation,   Cisco  Systems,  Lucent  Technologies,
Siemens,  Verilink  and Zhone  Technologies.  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 and further
intensify competition.

     We believe that our existing OEM customers continuously evaluate whether to
offer their own  multiservice  broadband  access  devices.  If our OEM customers
decide to internally  design and sell their own  multiservice  broadband  access
devices,  or acquire one or more of our  competitors or their  broadband  access

                                       29
<PAGE>

technologies,  they could eliminate or  substantially  reduce their purchases of
our products. One of our OEM customers,  Lucent Technologies,  accounted for 18%
of our net revenue for the year ended December 31, 2002. In addition,  growth of
our  business  may  cause our OEM  customers,  including  Lucent,  to view us as
greater  competition.  Our OEM relationships  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  products  offered by
Lucent,  which could adversely  affect our relationship  with that customer.  We
cannot assure you that our OEM customers  will continue to rely, or expand their
reliance, on us as an external source of supply for their multiservice broadband
access devices. Because we rely on one OEM customer for a substantial portion of
our net revenue,  a loss of sales to this OEM customer could  seriously harm our
business, financial condition and results of operations.

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

     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; and

     o    domestic and foreign government regulation.

     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 that 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.

                                       30
<PAGE>

     We are  currently  certified  for ISO  9001  per  the  1994  standard.  Our
registration  expires in September 2003. We must be recertified against the new,
2000 ISO 9001  standard.  Failure to achieve  recertification  could  affect our
relationships  with many of our customers who require or prefer their vendors to
be ISO 9001 certified.

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

Our stock has traded at or below $1.00 for more an  extended  period of time and
may be subject to delisting from the Nasdaq SmallCap Market.

     Our common stock has  recently  traded at or below $1.00 and was subject to
delisting  from the Nasdaq  National  Market.  After an oral hearing  before the
Nasdaq Listing  Qualifications  Panel, on September 20, 2002, the listing of our
common  stock was  transferred  from the  Nasdaq  National  Market to the Nasdaq
SmallCap Market.  Similar to the requirements of the Nasdaq National Market, one
of the continued  listing  requirements  for the Nasdaq  SmallCap  Market is the
$1.00 minimum bid price  requirement.  On October 2, 2002,  Nasdaq  granted us a
180-day grace period,  until March 30, 2003, to meet the $1.00 minimum bid price
requirement.  If shares of our common  stock do not meet the  minimum  $1.00 per
share closing bid price requirement on or before March 30, 2003, our stock could
be delisted from the Nasdaq Stock Market. On April 7, 2003, Nasdaq granted us an
additional  90-day grace  period,  until July 7, 2003, to meet the $1.00 minimum
bid price  requirement.  If shares of our common  stock do not meet the  minimum
$1.00 per share  closing bid price  requirement  on or before July 7, 2003,  our
stock could be delisted from the Nasdaq Stock  Market.  If our stock is delisted
from the Nasdaq Stock Market,  our stockholders  could find it more difficult to
dispose of, and obtain,  accurate  quotations  as to the market  value of, their
shares, and the market price of our stock would likely decline further.

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,
in February 2001 we acquired Woodwind  Communications  Systems, Inc., a provider
of voice-over-broadband  network edge access solutions,  and in December 2001 we
acquired certain assets of Metrobility  Optical Systems,  Inc., in both cases in
exchange for shares of our common  stock.  The issuance of equity  securities in
connection with future  acquisitions or investments could  significantly  dilute
our investors. If we incur or assume debt in connection with future 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;


                                       31
<PAGE>

     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 intangible
          assets; and

     o    incurrence of significant write-offs.

Our stock price may be volatile, and you may not be able to resell our shares at
or above the price you paid, or at all.

     In August 2000,  we completed  our initial  public  offering.  Prior to our
initial public offering there had not been a public market for our common stock.
The stock  market  in  general,  and the  Nasdaq  Stock  Market  and  technology
companies in particular,  have experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating  performance
of companies. The trading prices and valuations of many technology companies are
substantially  below historical levels.  These broad market and industry factors
may further  decrease the market price of our common  stock,  regardless  of our
actual operating performance.

Many corporate actions would be controlled by officers, directors and affiliated
entities, if they acted together, regardless of the desire of other investors to
pursue an alternative course of action.

     As  of  March  31,  2003,  our  directors,  executive  officers  and  their
affiliated  entities  beneficially  owned  approximately  65% of our outstanding
common  stock after  giving  effect to the  stockholders  agreement  executed by
Jeffrey  Drazan and certain  entities  affiliated  with Sierra  Ventures.  These
stockholders, if they acted together, could exert control over matters requiring
approval by our stockholders, including electing directors and approving mergers
or other business combination transactions.  This concentration of ownership may
also  discourage,  delay or prevent a change in control  of our  company,  which
could deprive our  stockholders of an opportunity to receive a premium for their
stock as part of a sale of our company and might reduce our stock  price.  These
actions may be taken even if they are opposed by our other stockholders.

Delaware law, our corporate  charter and bylaws and our stockholder  rights plan
contain  anti-takeover  provisions  that  would  delay or  discourage  take over
attempts that stockholders may consider favorable.

     Provisions in our restated certificate of incorporation and bylaws may have
the  effect of  delaying  or  preventing  a change of  control or changes in our
management. These provisions include:

     o    the  right of the board of  directors  to elect a  director  to fill a
          vacancy created by the expansion of the board of directors;

     o    the  ability of the board of  directors  to alter our  bylaws  without
          obtaining stockholder approval;

     o    the establishment of a classified board of directors;

     o    the ability of the board of  directors to issue,  without  stockholder
          approval,  up to five million shares of preferred stock with terms set
          by the board of  directors  which  rights  could be senior to those of
          common stock; and

     o    the elimination of the right of stockholders to call a special meeting
          of stockholders and to take action by written consent.

     Each of these provisions could discourage  potential take over attempts and
could lower the market price of our common stock.


                                       32
<PAGE>

     We  have  adopted  a  stockholder  rights  plan  and  declared  a  dividend
distribution  of one  right  for  each  outstanding  share  of  common  stock to
stockholders  of record as of August 6,  2001.  Each  right,  when  exercisable,
entitles the  registered  holder to purchase from VINA one  one-thousandth  of a
share of a new series of preferred  stock,  designated as Series A Participating
Preferred Stock, at a price of $35.00 per one one-thousandth of a share, subject
to  adjustment.  The rights will  generally  separate  from the common stock and
become  exercisable  if any person or group acquires or announces a tender offer
to acquire 20% or more of our  outstanding  common stock  without the consent of
our board of directors.  Because the rights may  substantially  dilute the stock
ownership of a person or group  attempting  to take us over without the approval
of our board of  directors,  our  stockholder  rights  plan  could  make it more
difficult  for a third party to acquire us (or a  significant  percentage of our
outstanding capital stock) without first negotiating with our board of directors
regarding  such  acquisition.  We have  amended the  stockholder  rights plan to
exempt the  merger  agreement  and the voting  agreement  between  certain  VINA
stockholders  and Larscom  executed in connection with the merger agreement from
triggering the plan.

     In addition,  because we are  incorporated in Delaware,  we are governed by
the  provisions of Section 203 of the Delaware  General  Corporation  Law. These
provisions may prohibit large  stockholders,  in particular  those owning 15% or
more of our outstanding  voting stock,  from merging or combining with us. These
provisions in our charter,  bylaws and under Delaware law could reduce the price
that  investors  might be willing  to pay for shares of our common  stock in the
future and result in the market price being lower than it would be without these
provisions.

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 March 31, 2003.  To date,  our  international  sales have been
denominated primarily in U.S. dollars, and accordingly, 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. 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.

Item 4. Controls and Procedures

     (a)  Evaluation  of  disclosure  controls  and  procedures.  Based on their
evaluation  as of a date  within 90 days of the  filing  date of this  Quarterly
Report on Form 10-Q,  the Company's  principal  executive  officer and principal
financial  officer have  concluded  that the Company's  disclosure  controls and
procedures  (as defined in Rules  13a-14(c) and 15d-14(c)  under the  Securities
Exchange  Act of 1934  (the  "Exchange  Act"))  are  effective  to  ensure  that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.

     (b) Changes in internal controls.  There were no significant changes in the
Company's internal controls or in other factors that could significantly  affect
these  controls  subsequent  to the  date of  their  evaluation,  including  any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.


                                       33
<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 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

Exhibit
  No.     Exhibit
  ---     -------

  2.1     Agreement and Plan of Merger, dated as of March 17, 2003, by and among
          Larscom Incorporated,  London Acquisition Corp. and VINA Technologies,
          Inc.  (incorporated  by reference to Exhibit 2.1 to our Current Report
          on Form 8-K filed with the Securities and Exchange Commission on March
          20, 2003).

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

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

     (b)  We filed a report on Form 8-K on March 20,  2003 with  respect  to the
          merger of the Company with Larscom Incorporated,  as described in Item
          5 of the Form 8-K.


                                       34
<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, 2003                   By:     /s/ W. Michael West
                                           ----------------------
                                            W. Michael West
                                            Chief Executive Officer
                                              (Principal Executive Officer)

Date:  May 14, 2003                   By:     /s/ Stanley E. Kazmierczak
                                           -----------------------------
                                            Stanley E. Kazmierczak
                                            Chief Financial Officer
                                            (Principal Financial and Accounting
                                            Officer)



                                       35
<PAGE>




   Exhibit
     No.                     Description of Document
     ---                     -----------------------

     2.1  Agreement and Plan of Merger, dated as of March 17, 2003, by and among
          Larscom Incorporated,  London Acquisition Corp. and VINA Technologies,
          Inc.  (incorporated  by reference to Exhibit 2.1 to our Current Report
          on Form 8-K filed with the Securities and Exchange Commission on March
          20, 2003).

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

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



                                       36
<PAGE>


CERTIFICATIONS

     I, W. Michael West, certify that:

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

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

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

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

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

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

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

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

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

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

     6. The registrant's other certifying  officers and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date:  May 14, 2003

By:     /s/ W. Michael West
      ------------------------
      W. Michael West
      Chief Executive Officer
      (Principal Executive Officer)


                                       37
<PAGE>


     I, Stanley E. Kazmierczak, certify that:

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

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

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

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

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

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

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

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

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

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

     6. The registrant's other certifying  officers and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.





Date:  May 14, 2003

By:     /s/ Stanley E. Kazmierczak
      --------------------------------
      Stanley E. Kazmierczak
      Chief Financial Officer
      (Principal Financial and Accounting Officer)





                                       38