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

                                    FORM 10-K
     (Mark One)
         X         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000

                                       OR

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

                For the Transition Period From _______ To _______


                         Commission File Number: 0-31093

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

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


  39745 Eureka Drive, Newark, CA 94560                  (510) 492-0800
(Address of principal executive offices)       (Registrant's telephone number,
                                                     including area code)

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

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock, par value $.0001 per share
                                (Title of Class)

     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 if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

     The aggregate  market value of Common Stock held by  non-affiliates  (based
upon the closing sale price on the Nasdaq National Market on March 20, 2001) was
approximately $69,200,000.00. As of March 20, 2001, there were 36,912,420 shares
of Common Stock, $0.0001 per share par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Items  10 (as to  directors),  11,  12 and 13 of Part  III  incorporate  by
reference information from the registrant's proxy statement to be filed with the
Securities  and Exchange  Commission  in  connection  with the  solicitation  of
proxies for the  registrant's  2001 Annual Meeting of Stockholders to be held on
May 22, 2001.



<PAGE>

<TABLE>
<CAPTION>



                             VINA TECHNOLOGIES, INC.
                                TABLE OF CONTENTS
                                                                                                   Page
<S>                                                                                                 <C>

PART I................................................................................................2

 Item 1.  Business....................................................................................2
 Item 2.  Properties.................................................................................16
 Item 3.  Legal Proceedings..........................................................................16
 Item 4.  Submission of Matters to a Vote of Security Holders........................................16

PART II..............................................................................................18

 Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters......................18
 Item 6.  Selected Consolidated Financial Data.......................................................20
 Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations......21
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.................................42
 Item 8.  Consolidated Financial Statements and Supplementary Data...................................43
 Item 9.  Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.......63

PART III.............................................................................................63

 Item 10.  Directors and Executive Officers of the Registrant........................................63
 Item 11.  Executive Compensation....................................................................63
 Item 12.  Security Ownership of Certain Beneficial Owners and Management............................63
 Item 13.  Certain Relationships and Related Transactions............................................63

PART IV..............................................................................................64

 Item 14.  Exhibits, Consolidated Financial Statement Schedules, and Reports on Form 8-K.............64

</TABLE>


<PAGE>



                                     PART I

Item 1.  Business

     When used in this  report,  the words  "may,"  "intend,"  "might,"  "will,"
"should,"  "could,"  "would,"  "expect,"   "believe,"   "estimate,"   "predict,"
"potential,"  or the  negative  of these  terms,  and  similar  expressions  are
intended to identify  forward-looking  statements.  These statements reflect our
current  views with respect to future  events and are based on  assumptions  and
subject to risks and  uncertainties.  Given these risks and  uncertainties,  you
should  not  place   undue   reliance  on  these   forward-looking   statements.
Forward-looking  statements  include,  but are not limited to, statements about:
marketing and commercialization of our products under development; our estimates
regarding our capital requirements and our needs for additional financing; plans
for future products and services and for  enhancements of existing  products and
services;  our patent  applications  and  licensed  technology;  our  ability to
attract  customers and establish  collaboration  and licensing  agreements;  and
sources of revenues  and  anticipated  revenues,  including  contributions  from
corporate  collaborations,  license agreements and other collaborative  efforts,
and the continued viability and duration of those agreements and efforts.

     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 risks set forth
below under Item 7, "Management's Discussion and Analysis of Financial Condition
and Results of  Operations  -- Other  Factors  That May Affect  Results."  These
forward-looking  statements  speak  only  as of the  date  hereof.  The  Company
expressly  disclaims  any  obligation  or  undertaking  to release  publicly any
updates or  revisions  to any  forward-looking  statements  contained  herein to
reflect any change in the  Company's  expectations  with  regard  thereto or any
change in events,  conditions or  circumstances  on which any such  statement is
based.

     In the  sections  of this  report  entitled  "Business"  and  "Management's
Discussion  and Analysis of Financial  Condition  and Results of  Operations  --
Other  Factors That May Affect  Results,"  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.

     T1 Integrator, VINA, VINA Technologies,  eLink 100, MBX and Business Office
Exchange are our registered  trademarks.  We have filed applications to register
the following  trademarks:  VINA HDSL Integrator,  DSL eLink,  VINA Multiservice
Xchange,  Simplifying  the First Mile,  and The Leading  Architect  of the First
Mile. We also refer to trademarks of other  corporations  and  organizations  in
this document.

Overview

     VINA  Technologies  develops  and  markets  multiservice  broadband  access
products that enable  telecommunications  service  providers to deliver  bundled
voice  and data  services.  Our  products  integrate  various  broadband  access
technologies,  including  both circuit- and  packet-based  technologies,  onto a
single  platform  to  alleviate  capacity  constraints  in  the  first  mile  of
communications networks. We believe that by integrating voice and data services,
our solutions decrease network access equipment costs and operating expenses for
our service  provider  customers.  Our products also create  additional  revenue
opportunities  for  service  providers  by  enabling  them to  deliver  enhanced
services.  These services include local and long distance telephone services, as
well as high-speed data services, such as Internet access,  business-to-business
electronic  commerce,  extended  local area  networks,  outsourced  applications
services  and   messaging.   By  supporting   both  circuit-  and   packet-based
technologies,  our products protect service providers' investments in prevailing
circuit-based  networks  and  offer  them a  cost-effective  migration  path  to
emerging  packet-based  networks.  They  also  facilitate  seamless  and  remote
upgrades and service provisioning by our customers.

     We sell our products to competitive local exchange carriers,  interexchange
carriers  and  incumbent  local  exchange  carriers  through our sales force and
value-added  resellers and as an original equipment  manufacturer.  Our original
equipment  manufacturer  and largest service provider  customers  include Lucent
Technologies,  Allegiance  Telecom and Nuvox  Communications  (formerly  Gabriel
Communications and Trivergent).

Industry Background

    Increasing Demand for Broadband Access

     The volume of Internet  and other data  traffic has grown  quickly over the
past  several  years,  due  primarily  to  increased  numbers  of users  and the
proliferation of bandwidth intensive  applications such as  business-to-business
electronic commerce, web hosting and remote access for telecommuters.  According
to the Yankee Group, in 2002, over 50% of public communications  network traffic
in the  United  States  will be data  traffic,  surpassing  the  amount of voice
traffic on the public network for the first time. Moreover,  Ryan Hankin Kent, a
market research and consulting firm, projects North American Internet traffic to
grow at a rate of approximately 300% per year between 2001 and 2003.  Electronic
business  applications  have become  critical  business  tools and, as a result,
businesses of all sizes increasingly  require their  telecommunications  service
provider to deliver constant broadband connections at affordable rates.

    The First Mile Bottleneck

     Although service providers have deployed emerging packet-based technologies
to  expand  the speed and  capacity  of long  distance  networks,  more  limited
investment  has been made in local  networks,  or the first mile, to address the
substantial  increase  in  traffic.  As a result,  the first mile has become the
telecommunication infrastructure's principal bottleneck, limiting the ability of
service providers to deliver broadband services to the market.

     Deregulation is Accelerating  Competition and the Introduction of Broadband
Access

     Historically,   in  the  United  States,   dominant  telephone   companies,
principally Regional Bell Operating  Companies,  were the exclusive operators of
first mile  communications  networks.  The U.S.  Telecommunications  Act of 1996
opened the local  communications  market to new entrants.  The 1996 Act required
the dominant local  carriers,  known as incumbent  local exchange  carriers,  or
ILECs,  to lease  portions of their networks to other carriers to compete in the
first mile.  These new entrants are referred to as  competitive  local  exchange
carriers,  or CLECs.  Expanded competition has accelerated the deployment of new
technologies,  including  digital  subscriber  line,  or DSL,  digital cable and
broadband  fixed  wireless,  into the local  market.  To date,  these  broadband
solutions have been introduced as parallel data networks,  co-existing alongside
the voice infrastructure controlled by ILECs, complicating the network.

     While  both  CLECs and ILECs  have  introduced  services  in the  market to
address  competition  and the  need for  broadband  access,  each of them  faces
significant challenges in their respective markets.

     CLECs. CLECs have targeted the large business market in particular and have
gained market share from ILECs in recent years.  Most CLECs have provided either
voice or data  services and are facing  numerous  challenges  as they attempt to
achieve  profitability.  CLECs  are  seeking  to  decrease  network  expense  by
improving  bandwidth  management and reducing customer  turnover.  They are also
seeking to  increase  revenue  per  customer by  introducing  bundled  suites of
enhanced  voice and data services,  such as long  distance,  local call routing,
Internet access, business-to-business electronic commerce and web hosting. CLECs
have also taken the lead in offering bundled voice and data services to small to
medium  size  businesses,  a market  which we believe  has been  dominated,  but
underserved,  by ILECs.  These  businesses  often do not have the  financial  or
technical  resources of large businesses to invest in and manage costly parallel
voice and data networks. We believe that small to medium size businesses present
an opportunity for CLECs to substantially grow their customer base. According to
the Yankee  Group,  in the U.S.  there were  approximately  9.8 million small to
medium size businesses with two to 499 employees in 1999.

     ILECs.  Historically,  ILECs have faced strict  regulations  limiting their
investment  returns  in the  voice  market  by  tying  those  returns  to  their
infrastructure  and other costs.  ILECs now seek to introduce  new enhanced data
services in  deregulated  markets  where their  returns are not so  constrained.
Although  ILECs have  traditionally  dominated the first mile market,  they have
lost  substantial  market share to CLECs in the large  business  market and have
begun to lose market share in the small to medium size business  market  because
CLECs have been able to deliver more cost-effective services. In order to defend
their  customer  base in the small to medium  size  business  market,  ILECs are
seeking to provide bundled voice and data services to their customers. ILECs are
also  experiencing  a copper  wire  telecommunication  lines  shortage  in major
metropolitan  areas  because  there has been an  increase in the number of phone
lines installed in customer premises for a variety of applications.  Due to this
shortage,  ILECs face pressure to more efficiently utilize their copper wires to
meet the increasing demand for voice and high-speed data access.

     Convergence of Voice and Data Networks

     Voice and data networks  have evolved into  parallel  networks as broadband
access  networks  include both  circuit-based  networks  utilizing time division
multiplexing, or TDM, and packet-based networks utilizing various protocols such
as  asynchronous  transfer  mode, or ATM,  internet  protocol,  or IP, and frame
relay.  The  deployment  of equipment  dedicated to  circuit-based  networks and
packet-based  networks  has  resulted  in  the  creation  of  a  highly  complex
telecommunications  infrastructure  comprised of multiple networks  dedicated to
support various  protocols.  As a result,  service providers are subject to high
network operating costs due to the redundancy of operating parallel networks and
limited  equipment  compatibility.  In order for  service  providers  to deliver
cost-effective,  bundled  voice and data  services,  we believe  these  parallel
networks need to be integrated and simplified.

     Limitations  Constraining  the  Deployment  of  Converged   Next-Generation
Network Solutions

     While  many  service  providers  desire to provide  bundled  voice and data
services,  they have been limited in their ability to deliver their  services by
the following:

o  Uncertain migration path. Service providers have invested billions
   of dollars in circuit-based networks. They recognize that separate
   voice  and  data  networks  must  be  converged  because  separate
   networks  are  not   cost-effective  in  the  long  term.  Service
   providers  require products that support both networks and offer a
   cost-effective  migration  path  from  circuit-based  networks  to
   emerging packet-based networks.

o  Multiple  Equipment  and  Protocol  Types.   Addressing   multiple
   protocols  has  historically  required  service  providers  to tap
   multiple   vendors  and  equipment  types,  and  has  resulted  in
   confusion as well as unnecessary  network  complexity and expense.
   Service  providers  require  multiservice  access  solutions  that
   integrate   readily  into  their   existing   networks,   maintain
   compatibility  with other  components of their network and provide
   remote,  dynamic bandwidth and service  provisioning,  eliminating
   the need for expensive manual provisioning and installation.

o  Inefficient use of network bandwidth. The rapid increase in demand
   for bandwidth and the limited capacity available in the first mile
   of telecommunications networks have strained the level of services
   provided to end users.  Service  providers  require more efficient
   multiservice  access  solutions  that  minimize  network  expense,
   maximize bandwidth and are deliverable over a single copper line.

o  Operational challenges to infrastructure deployment. The scope and
   complexity   of  existing   communication   networks  pose  unique
   challenges  to service  providers in  recruiting  and training the
   necessary personnel to deploy,  scale,  provision and maintain the
   network.  Simplified  network  solutions are needed to help reduce
   the number of personnel and technical expertise required.

     In order to address  these  challenges,  several  communications  equipment
companies have introduced  broadband  integrated access devices,  or IADs. First
generation  IADs are  circuit-based.  As service  providers plan their converged
next-generation  networks,  they have become increasingly reluctant to invest in
communication  equipment  that  cannot  support  asynchronous  transfer  mode or
Internet  protocol  traffic.  In  response,   several  vendors  have  introduced
packet-based IADs.  However,  we believe these new products have not been widely
adopted  because  service  providers have invested  billions of dollars in their
circuit-based  networks,  which they are unwilling to abandon. The transition to
converged,  next-generation  networks is a costly and complex  process that will
take many years to complete.  Therefore, service providers are seeking broadband
access  solutions that operate in both circuit- and  packet-based  environments,
enabling them to protect their investment in existing equipment while ensuring a
cost-effective migration path to converged, packet-based networks. This solution
must be affordable, scalable and easy to install and operate.

The VINA Solution

     We develop  and  market  broadband  access  communications  equipment  that
offers,  in one  product,  access to circuit-  and  packet-based  networks.  Our
products enable service providers to offer a complete suite of bundled voice and
data services to end users,  including voice, video, data and Internet services,
such as  business-to-business  electronic  commerce and web  hosting.  Using our
products,  service providers may remotely and dynamically customize the services
they deliver to individual  customers.  Furthermore,  our products allow service
providers to  cost-effectively  deliver  bundled  offerings from a single vendor
with a single bill. Our products  require  little or no  information  technology
expertise on the end users' part and allow service providers to deliver products
for the  first  mile  which  reduce  the cost  and  complexity  associated  with
purchasing, operating and maintaining their networks.

     We  believe  that  our  products  offer  service  providers  the  following
benefits:

o   Defined Network Migration Path. Our products offer a seamless path
    from the circuit-based  network  environment to packet-based voice
    and data network  environment.  We utilize software to migrate our
    products  to  packet-based  networks,  minimizing  or  eliminating
    costly  equipment  upgrades.  Our  equipment  is  currently  being
    installed in both circuit- and packet-based networks.

o   Reduced Network Complexity and Operating Costs. Our platform-based
    solution integrates multiple products, such as routers, firewalls,
    channel banks, modems and features of private branch exchanges, or
    PBXs,  which  reduce the  operating  costs and the  complexity  of
    delivering bundled voice and data services.  Service providers are
    able to operate  more  responsively  and to roll out services on a
    cost-effective  basis through our software-based  remote bandwidth
    and service provisioning.

o   Increased  Value-Added  Services.   Our  solution  allows  service
    providers to enhance revenue derived from their installed customer
    base by selling additional  software-enabled  services,  such as a
    firewall or local call  routing.  Our  platform-based  solution is
    designed  to work  with a broad  range  of  first  mile  transport
    technologies.

o   Ease  of   Deployment.   Our  hardware   products   incorporate  a
    software-based  management  system,  including  a  graphical  user
    interface  to  facilitate  installation  and use and to allow  our
    service  provider  customers  to  remotely  manage  their  product
    offerings and upgrades.  Our product  solution,  combined with our
    extensive   service   program,   simplifies  and  accelerates  the
    deployment of bundled voice and data services.

o   Robust Service Platform.  Our products provide  telecommunications
    grade quality and reliability. We offer robust solutions that have
    been designed to navigate the  unpredictable  course of technology
    and  standards  development.  We  design  our  products  to  allow
    software-based  upgrades for anticipated  future network transport
    technologies.

     Our solution  accepts multiple  transport  services into a single broadband
access product. By incorporating  various functions,  such as firewall,  channel
bank and features of a private branch exchange onto a single platform, we enable
our service  provider  customers  to reduce  their  equipment  costs and network
complexity,  ease migration from circuit- to packet-based  networks, and enhance
revenue opportunity from their installed customer base.

Our Products

     We offer a family of products for the first mile  designed to allow service
providers  to  deliver a  complete  suite of  bundled  voice  and data  services
cost-effectively over a reduced number of network connections.

         Multiservice T1 Integrator and HDSL Integrator

     Our  Multiservice T1 Integrator and HDSL  Integrator are hardware  platform
solutions  that allow service  providers to integrate  their  customers'  voice,
data,  video and Internet  requirements  onto a single T1 line or high-bit  rate
digital subscriber line, or HDSL. These  multiservice  broadband access products
provide  toll-quality voice service in both circuit- and packet-based  networks.
In  addition,   they  support  software-based   value-added  features  including
intelligent local call routing,  firewalls,  service level agreement  statistics
and Business OfficeXchange, which enables our products to operate as stand-alone
PBX systems.  Consequently,  our multiservice broadband access products not only
lower deployment costs and streamline provisioning,  but also enable our service
providers  to  differentiate  themselves  in the market and  address  end users'
service requirements.

     Our T1 Integrator's  channel bank function  converts a T1 digital line into
24  individual   analog  telephone   circuits.   In  addition,   its  integrated
multiplexing  and routing  functionality  allows the  allocation of channels for
video and personal computers, or PCs, as well as high-speed,  dedicated Internet
and frame relay access.  The T1 Integrator also supports  standard  channel bank
functionality and local call routing, which enables 911, 411 and local toll-free
calls to be  switched  to the ILEC and  provides  redundancy  in the event of an
interruption in T1 service.

         Multiservice Xchange product family

     Our  Multiservice  Xchange product family  includes the MX-500,  MX-550 and
MX-400.  The  MX-500  and  MX-550 are  compact,  multiservice  broadband  access
platforms that deliver circuit- and packet-based voice, data, video and Internet
access  services.  The MX-500  supports  up to a maximum of two T1 lines and the
MX-550  supports an  international  equivalent,  E1 line.  The MX-500 and MX-550
provide  support for the  circuit-  based TDM network to deliver  voice and data
access services.  The MX-500 and MX-550 also support asynchronous transfer mode,
or ATM,  voice and data services.  Accordingly,  the MX-500 and MX-550 meets the
needs of both service  providers who have  implemented ATM networks,  as well as
providers  who intend to migrate  from  existing  circuit-  to ATM  packet-based
networks.  The MX-500 provides  toll-quality  voice service in both circuit- and
packet-based networks. The MX-550 also supports telecommunication protocols used
in major international markets.  Consequently,  the MX-500 and MX-550 enable our
service  provider  customers  to realize  savings in  deployment,  facility  and
maintenance costs,  streamline provisioning and expand the range of services our
customers are able to offer to end users.

     We  recently  introduced  the MX-400,  a product  originally  developed  by
Woodwind  Communications  Systems.  The MX-400 is  designed  to provide a single
point of connectivity  for the delivery of integrated  network  services.  These
services  include  broadband  access,  continuous  Internet  access,  public and
private  voice/facsimile  services and private data services  using Frame Relay,
ATM,  switching  or IP over SDSL or T1  delivery  technologies.  The MX-400 also
enables Voice over IP, or VoIP,  with Media Gateway Control  Protocol,  or MGCP.
The  ability  to offer  MGCP  functionality  allows  service  providers  to take
advantage of the revenue  generating  benefits of deploying VoIP services to the
small and medium sized  business  market.  To date,  we have not sold any MX-400
products.

         eLink product family

     Our  eLink  product  family  includes  the  eLink-100  and  eLink-200.  The
eLink-100 was also originally developed by Woodwind  Communications Systems. The
eLink-100 is an  eight-port  platform  addresses the needs of one of the largest
segment of the Digital Subscriber Line, or DSL, market and provides  high-speed,
continuous  Internet  access,  public  voice/facsimile  services  and Local Area
Network interconnect using ATM, and Frame Relay over SDSL delivery technologies.
The eLink 100 supports advanced voice services such as local station-to-station,
voice  compression,  silence  suppression  and  echo  cancellation,  as  well as
web-based  system  configuration  and system  version  download.  The  eLink-100
replaces the DSL eLink product, which was supplied to us by Polycom. To date, we
have not sold any eLink-100 or DSL eLink products.

     Our eLink-200  supports TDM and integrates eight analog ports for voice and
one Ethernet  port for data on the same T1 line.  The  space-saving  device also
forms a complete solution in one box by marrying a channel bank, DHCP server and
IP router with NAT  functionality  and firewall  support.  The  eLink-200  began
shipping in the fourth quarter of 2000.

          Multiservice Broadband Xchange

     The  Multiservice  Broadband  Xchange,  or MBX,  is a central  office-based
multiservice  platform  that is designed to enable  service  providers to deploy
bundled  broadband  voice and data  services  to the  first  mile or edge of the
network.  The MBX platform  provides a  software-based  migration  path from TDM
technology  to ATM  switching.  This platform is design for options that include
DSL, fiber optics and service mediation with IP services.

     The MBX platform  consolidates the voice  concentration  functionality of a
digital loop  carrier,  the data  aggregation  and switching  capabilities  of a
multiservice ATM switch,  and the voice/data  interworking  functions of a media
gateway.   The  MBX  provides   flexibility   in  its  support  of   traditional
concentration of voice lines with the added support of frame relay switching. To
date this product is still under  development.  We expect to be in a position to
commence shipments of this product in the third quarter of 2001.



<PAGE>


Sales and Marketing

         Sales

     We sell our products to service providers directly through our sales force,
and indirectly through our original equipment  manufacturers  (OEM) customer and
value added  resellers  (VARs).  We have  established  an OEM customer and other
marketing  relationships  in order to serve  particular  markets and provide our
service  provider  customers  with  opportunities  to purchase  our  products in
conjunction with complementary products and services.

o   Direct.  Direct  sales  have  represented,  and  we  believe  will
    continue to represent,  the majority of our sales. We believe that
    direct  interaction  with  service  providers  offers  us the best
    understanding of the business models and technical requirements of
    our customers.  Further, we believe that the competitive nature of
    the  telecommunications  equipment  industry requires us to reduce
    costs by eliminating intermediate steps in the distribution chain.

o   OEM.  OEM  sales  through  Lucent  are an  important  distribution
    channel  for  us  in  the  United  States.   We  believe  Lucent's
    relationships  with CLECs,  ILECs and small independent  operating
    companies will continue to enhance our ability to reach this large
    customer  base.  The OEM  customer  uses our  products  to deliver
    complete,    end-to-end   solutions   that   are   installed   and
    field-serviced by their technical support  organizations.  We plan
    to initiate and develop  relationships  with additional leaders in
    the communications equipment industry as potential OEM customers.

o   Value-Added  Resellers.  In addition  to direct  sales and our OEM
    customer, we have existing  relationships with VARs focused on the
    service  provider  market.  We intend to leverage our existing VAR
    relationships to seek new  opportunities for the deployment of our
    products.  In  addition  to the  VARs we work  with in the  United
    States, we are developing relationships with VARs in Europe.

     Whether we ship our products  directly or through our OEM customer or VARs,
maintaining a direct relationship with each of our service provider customers is
an important  part of our sales  strategy.  Since  establishing a strong working
relationship  with our customers is critical to sales success and future product
development, we strive to maintain strong visibility across our service provider
customer base,  regardless of the distribution channel. As of December 31, 2000,
our sales organization consisted of 52 employees.

         Marketing

     Our marketing  objectives  include building market awareness and acceptance
of our company and our products, as well as generating qualified customer leads.
To  accomplish  these  objectives,   our  marketing  activities  include  public
relations,  communications,  research,  sales support,  direct marketing,  a web
presence, product marketing, as well as channel marketing. We work directly with
service  providers to help them develop  business  models and introduce  product
packages,  promotional programs and pricing strategies,  all designed to promote
the delivery of multiple voice and data services over a single  broadband access
facility.  In  addition,  we actively  work with a number of industry  and trade
publications  and  industry  analysts  to educate  service  providers  on how to
deploy, and the benefits of, multiservice broadband access networks.

     We have  developed  an  extensive  co-marketing  initiative  targeting  our
customers.  Our QuickStart  implementation program educates our customers on our
products and services through sales support  programs,  joint marketing and lead
generation activities, joint sales initiatives, and technical support. The tools
and resources  available through our QuickStart  program enable our customers to
quickly understand our product solutions,  expand their customer base and create
new revenue opportunities for their installed base. As of December 31, 2000, our
marketing organization consisted of 17 employees.

Customer Service and Support

     Our customer service  organization  maintains and supports products sold to
service  providers and offers technical support to our OEM customer and VARs. We
also assist our OEM customer and VARs in offering installation,  maintenance and
support  services to their customers for our products.  We handle  questions and
problems over the  Internet,  telephone and e-mail.  We  continually  update our
website to enable  our direct and  indirect  customers  to  download  the latest
technical  information  and tips,  along with  firmware,  software  and  product
manuals.

Customers

     We  primarily  sell to  CLECs,  ILECs  and  smaller  independent  operating
companies through direct sales and indirectly through our OEM customer and VARs.
The  following  is a list of some of our direct and  indirect  service  provider
customers:

2nd Century Communications CapRock Communications    North American Telephone
Allegiance Telecom         Intermedia Communications Nuvox Communications
ATG Technologies           KMC Telecom               Pacific Bell
Birch Telecom              MCI Worldcom              TelePacific Communications
Broadwing                  Media One Group           Time Warner Telecom

     For the year ended  December 31, 2000,  sales to Lucent  account for 31% of
our net revenue.  Five customers,  including Lucent Technologies,  accounted for
approximately  75% of our net revenue for the year ended  December 31, 2000,  of
which sales to Lucent,  Gabriel  Communications  and  Trivergent  Communications
accounted for 31%, 16% and 13% of our net revenue, respectively.

     For the year ended  December 31, 1999,  sales to Lucent  account for 46% of
our net revenue. Five customers,  including Lucent,  accounted for approximately
80% of our net revenue for the year ended December 31, 1999.

     For the year  ended  December  31,  1998,  sales to Walker  and  Associates
accounted  for  57%  of our  net  revenue.  Five  customers,  including  Walker,
accounted for  approximately  87% of our net revenue for the year ended December
31, 1998,  of which sales to Walker and Lucent  accounted for 57% and 17% of our
net revenue respectively.

Strategic Relationships

     A  key  element  of  our  plan  is  to  expand  our  sales,  marketing  and
distribution channels through strategic relationships.  We have established, and
will  continue to pursue,  these  strategic  relationships  in order to grow net
revenues, and to provide indirect sales and marketing of our solutions.

     Lucent  Technologies.  In May 1998, we entered into an OEM  agreement  with
Lucent,  which we restated in May 1999. The Lucent agreement expires in May 2002
and can be renewed for a one year period.  The  agreement  may be  terminated by
Lucent at any time upon 60 days' notice.  Our working  relationship  with Lucent
offers each of us a number of strategic advantages.  Lucent uses our products to
offer a complete  end-to-end  solution for the first mile integrating  voice and
data traffic.  In turn, we have the opportunity to leverage  Lucent's  extensive
sales force and marketing relationships to reach new customers and markets.

     Lucent incorporates our T1 Integrator and MX into its ConnectReach  product
family.  ConnectReach  consists of our Multiservice T1 Integrator and a seamless
connection to Lucent's SLC-2000 Access System, a digital loop carrier,  enabling
the two  products  to  function  as a single,  integrated  voice and data access
system.  ConnectReach  also  interconnects  with the AnyMedia  Access System,  a
next-generation digital loop carrier. Lucent's ConnectReach Plus consists of our
MX with a seamless  connection  with either  Lucent's  SLC-2000 Access System or
AnyMedia  access  system.  Designed  to offer  cost-effective  enhanced  bundled
services  to  branch  offices  and  small  and  medium  sized  businesses,   the
ConnectReach Plus seamlessly  integrates voice, data, video, and Internet access
over a common T1, E1 or DSL network  connection.  The  ConnectReach  Plus can be
deployed today in a TDM network to provide support for existing services such as
TDM voice,  data, and Internet access. The same ConnectReach Plus chassis can be
configured  for voice over ATM,  providing a smooth  migration  path for service
providers.

  Interoperability Relationships

     Maintaining  product  compatibility with a broad range of equipment vendors
and central office gateway protocols is critical to our success as a supplier of
first mile solutions. These relationships allow us to work with other vendors to
develop  solutions  that continue to simplify the network and enhance our market
position  with  service  providers.   We  have  entered  into   interoperability
agreements with three vendors in the voice over DSL market--CopperCom, Jetstream
and Tollbridge.  We also have  relationships  with developers of SS7 gateways to
accelerate the  deployment of  asynchronous  transfer  mode, or ATM-based  local
exchange carrier services,  including  relationships  with Convergent  Networks,
Tachion and TeraBridge. These relationships help minimize the technology risk to
our service provider customers.

Technology

     Our  products  and  technology  enable  multiservice  access  over a single
broadband  network  with an open  architecture.  The open nature of our products
allows  our  solution  to  be  seamlessly   integrated  into  the  existing  TDM
infrastructure  to deliver  enhanced bundled services while offering the ability
to migrate the network through hardware or software upgrades, to an asynchronous
transfer mode, or ATM network,  and subsequently to an Internet protocol,  or IP
network. We have developed extensive core competencies.

         Asynchronous Transfer Mode and Frame Relay Expertise

     We have developed  expertise in packetized voice and data  technology.  The
two widely deployed and proven packet-based technologies that can be utilized to
integrate  voice  and data  over a  single  line are ATM and  frame  relay.  Our
expertise with  packet-based  technology  stems from developing  advanced system
functions such as digital signal  processing,  echo  cancellation,  dynamic call
setup and  virtual  circuit  switching,  as well as class of service  management
capabilities.

         Digital Subscriber Line Expertise

     DSL has emerged as the most  attractive  first mile access  technology  for
providing high bandwidth data access over existing  copper  telephone  lines. In
addition to high-speed access,  DSL technology lowers access costs,  compared to
equivalent T1 lines. Several versions of DSL are being implemented for differing
applications,  including  synchronous  digital subscriber line (SDSL),  high-bit
rate digital subscriber line, or HDSL, and HDSL2 for business  applications.  We
have  designed  our  products to scale  quickly and easily add new  transmission
technologies.  We have  implemented  HDSL in our T1 Integrator  product line and
implemented SDSL in our eLink 100 product line.

         Internet and Internet Protocol Expertise

     Demand  for  Internet  services  has grown  exponentially.  These  services
require  an all IP  infrastructure,  especially  in the access  network  for Web
applications  and use,  e-commerce  and email.  Our products  incorporate  an IP
router  which  offers  firewall  options that  include  circuit  level  security
technology and packet filtering, as well as network address translation, or NAT,
and a software-based  dynamic host control protocol, or DHCP, to provide dynamic
IP address  management.  These IP elements are necessary to ensure  reliable and
secure  Internet  access.  Our products  offer our customers a fully  integrated
Internet access solution.

         Time Division Multiplexing Expertise

     Most  carrier  networks  use  high  bit  rate  digital  systems   employing
time-division  multiplexing,  or TDM. With  extensive  deployment of T1, digital
local offices and optical  transmission,  TDM became  economically viable in the
1980s and  1990s.  The  existing  telephone  network is  predominantly  based on
digital time division switching, transmission and signaling over the out-of-band
control  network.  Our family of products  has been  designed to allow  seamless
integration into existing TDM networks and to offer a migration path to emerging
technologies such as ATM or IP.

         Hardware Design

     Our customers favor telecommunications grade hardware designs. Thus we have
avoided hardware design technology commonly used in the PC industry. Instead our
designs incorporate  microprocessors  specifically  developed for communications
applications and for high  reliability and high  availability  environments.  We
utilize design techniques which result in over-design of our digital  circuitry,
analog circuitry,  cooling and power systems.  We incorporate field programmable
gate array logic  components  where  possible  to  simplify  designs and improve
reliability.  Our interface  designs  incorporate  popular standard  chipsets in
order to assure compatibility with other carrier equipment. Our hardware designs
include  many  maintenance   features  which  reduce  operating  costs  for  our
customers.  For example, our service provider customers can use our equipment to
test their analog lines while the line is not inoperable.  We perform  extensive
environmental  testing  on all of our  products  and  most of our  products  are
designed for and meet network equipment building systems, or NEBs,  requirements
adopted by most  carriers.  Our products are also  designed to meet the European
telecommunications and physical standards.  We believe that all our designs meet
applicable underwriters labs and Federal Communications Commission standards.

Research and Development

     We believe  that our  success  is, to a large  extent,  dependent  upon our
responsiveness  to the  continued  technological  migration  of  our  customers'
networks.  Our  research  and  development  group  works  closely  with  our OEM
customer,  our customer  steering  committee,  and our marketing  department for
product definition and to assure compatibility with central office equipment.

     Research  and  development  expenses,  including  all product  development,
system testing and documentation,  were approximately $4.2 million in 1998, $6.7
million in 1999 and $12.6 million in 2000. All of our product  development costs
have been expensed as incurred. We have licensed certain commercially  available
software  from third  parties.  We conduct  the  majority  of our  research  and
development  at our Newark,  California  headquarters  and are in the process of
establishing additional centers in the United States and internationally.  As of
December 31, 2000, we had 75 full-time employees in research and development.

     While we develop  some custom  products for our OEM  customer,  most of our
research  and  development  efforts are focused on  standard  products.  We have
significant  hardware  and  software  expertise  in both  TDM  and  ATM  network
technologies. We place heavy emphasis on our design verification processes which
include   extensive   testing  at  our   Newark   facilities   and   significant
interoperability testing at partner sites.

Manufacturing

     We outsource our manufacturing  operations. We are currently negotiating an
agreement with Benchmark Electronics to replace Flextronics International as our
primary  contract  manufacturer.  Benchmark  is located in Angleton,  Texas.  We
believe  outsourcing our manufacturing  enables us to benefit from the component
purchasing  capabilities of a global contract  manufacturer that can accommodate
significant increases in production volume and product mix, as necessary. We use
a rolling 12-month forecast based on anticipated product orders to determine our
product  requirements.  We, in turn,  provide  these  forecasts  to the contract
manufacturer, which purchases the components for our products and assembles them
to our specifications.  We intend to utilize Benchmark's resources and expertise
to assist us in manufacturing, engineering, repair and product testing.

     Our  current  manufacturer,   Flextronics  International,   performs  board
assembly,  systems  configuration  and  testing and  product  shipping.  We have
developed comprehensive inspection tests and use statistical process controls to
assure the reliability and quality of our products. Our manufacturing  engineers
develop all test  procedures  and design and build all  equipment  and  stations
required to test our products.  We integrate these  manufacturing tests with our
contract  manufacturer's  build  processes.  Our  manufacturing  personnel  work
closely with our design engineers to design for manufacturability, and to ensure
that our test methods remain current as broadband access technologies evolve.

     We obtain several of the key components used in our products 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.  In the
fourth  quarter  of 1999,  we  experienced  a  severe  shortage  of  components,
particularly  subscriber line interface circuits,  which jeopardized our ability
to deliver our products in a timely  fashion.  The  suppliers of our  components
range from small vendors to large established companies. Components for which we
currently have only a single source include  subscriber line interface  circuits
that we purchase  from  Advanced  Micro  Devices,  and  microprocessors  that we
purchase  from  Motorola  Corporation.  Components  for which we currently  have
limited sources include digital signal processors, DSL modules and flash memory.
We purchase most components on a purchase order basis and do not have guaranteed
supply  arrangements  with  most  of  our  key  suppliers.  We or  our  contract
manufacturer may not be able to obtain necessary supplies in a timely manner.

     We  select   manufacturers  and  suppliers  on  the  basis  of  technology,
manufacturing capacity,  materials management,  quality and cost. We may, in the
future,  seek  additional  manufacturers  and suppliers to meet our  anticipated
requirements  and  lower the cost of our  products.  We  obtained  International
Standards Organization, or ISO, 9001 certification in 2000.

Competition

     The  market  for  multiservice   broadband  access  products  is  extremely
competitive.  We believe that  competition  will increase  substantially  as the
introduction of new technologies,  deployment of broadband access networks,  and
potential  regulatory  changes  create new  opportunities  for  established  and
emerging  companies.  Furthermore,  DSL- and  T1-based  solutions  compete  with
broadband wireless and cable offers. We face competition primarily in two areas:
equipment  manufacturers,  such as Accelerated Networks,  ADTRAN, Carrier Access
Corporation,  Efficient Networks (to be acquired by Siemens),  Polycom and Zhone
Technologies  and  diversified  equipment  manufacturers  such as Cisco Systems,
Lucent and Nortel Networks.  In addition,  we may in the future compete with SS7
gateway suppliers as well as Voice-over-DSL (VoDSL) suppliers.

     The  principal  competitive  factors for  products  utilized in our markets
include:

o  pricing;
o  product features;
o  reliability and scalability;
o  performance;
o  compatibility with other products;
o  ease of installation and use;
o  customer relationships, service and support; and
o  brand recognition.

     Some of our competitors have greater  financial and other resources than do
we. With greater resources, our competitors may be able to take better advantage
of new competitive  opportunities,  including offering lease and other financing
programs. In addition, the rapid technological  developments in our industry can
result in frequent  changes to our group of  competitors.  Consolidation  in our
industry may also affect our ability to compete. Acquisitions may strengthen our
competitors'  financial,  technical and marketing  resources and provide greater
access to customers or new technologies.  As a result,  these competitors may be
able to devote greater resources than we can to the development, promotion, sale
and support of their products

Intellectual Property

     We rely on a combination of copyright,  patent, trademark, trade secret and
other intellectual property laws,  nondisclosure agreements and other protective
measures  to  protect  our  proprietary   rights.  We  also  utilize  unpatented
proprietary know-how and trade secrets and employ various methods to protect our
trade secrets and know-how. We currently have three patent applications pending,
and another patent  application in process,  but no issued patents.  Although we
employ a variety of intellectual  property in the development and  manufacturing
of  our  products,  we  believe  that  none  of  our  intellectual  property  is
individually critical to our current operations.  However,  taken as a whole, we
believe our  intellectual  property  rights are significant and that the loss of
all or a substantial portion of such rights could have a material adverse effect
on our results of operations.  Our intellectual property protection measures may
be insufficient  to prevent  misappropriation  of our  technology.  From time to
time,  third  parties  may  assert  patent,   copyright,   trademark  and  other
intellectual  property  rights to  technologies,  processes  or rights  that are
important to our business. For example, we recently received letters from Sonoma
Systems  alleging that one of our products  infringes a patent owned by them and
inviting  us to  discuss  licensing  their  patent.  We  believe  that we do not
infringe  Sonoma  Systems'  patent.  These  assertions  may result in litigation
requiring  us to pay  substantial  damages or to  redesign  or stop  selling our
products.  Also, even if we were to prevail,  litigation could be time-consuming
and expensive and could divert our time and attention.  In addition, the laws of
many foreign  countries do not protect our  intellectual  properties to the same
extent as the laws of the United  States.  We may desire or be required to renew
or to  obtain  licenses  from  others in order to  further  develop  and  market
commercially  viable  products  effectively.  Any necessary  licenses may not be
available on reasonable terms.

Employees

     As of December 31, 2000, we employed 178 full-time  employees  including 69
in sales and marketing, 11 in operations, 75 in research and development, and 23
in  finance  and   administration.   Our   employees  are  not  covered  by  any
collective-bargaining  agreements,  and  we  consider  our  relations  with  our
employees to be good.

Item 2.  Properties

     VINA's   headquarters   are  in   Newark,   California,   where  it  leases
approximately  52,000  square feet of space.  VINA also  operates  facilities in
Richardson,  Texas and  Berkshire,  England.  As of December 31, 2000,  VINA had
sublease and lease  agreements  covering  approximately  60,000 square feet that
expire on various dates ranging from  September  2001 to July 2007.  The Company
believes  that its current  facilities  are  adequate to support its current and
anticipated  near-term  operations  and believes  that it can obtain  additional
space it may need in the future on commercially reasonable terms.

Item 3.  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 4.  Submission of Matters to a Vote of Security Holders

     We did not have any matters  submitted to a vote of security holders during
the fourth quarter ended December 31, 2000.

EXECUTIVE OFFICERS

     Set forth below is information concerning our executive officers who report
under Section 16 of the Securities  Exchange Act of 1934, as amended,  and their
ages as of March 20, 2001.

<TABLE>
<CAPTION>

<S>                            <C>                                  <C>
Name                           Age                              Position(s)
----                           ---                              -----------
Steven M. Bauman............   56     President, Chief Executive Officer and Director
Joshua W. Soske.............   42     Executive Vice President, Chief Technical Officer and Director
T. Diane Pewitt.............   44     Executive Vice President, Research & Development and Operations
Gaymond W. Schultz..........   60     Executive Vice President
Stanley E. Kazmierczak......   41     Vice President, Finance and Administration, Chief Financial
                                      Officer and Secretary
Thomas J. Barsi.............   33     Vice President, Business Development
Julie P. Cotton.............   54     Vice President, Human Resources
Kay E. Kienast..............   51     Vice President, Marketing
John W. Neese...............   51     Vice President, Engineering
C. Reid Thomas..............   39     Vice President, Sales

</TABLE>

     Steven M. Bauman has served as our President,  Chief Executive  Officer and
as a director  since August  1999.  Mr.  Bauman was a principal  at  GeoPartners
Research,  a Cambridge,  Massachusetts-based  consultancy  from February 1998 to
August 1999. He was Vice President/General Manager, Network Systems Division and
then Vice President of Virtual  Private  Networks of 3Com, a supplier of network
systems,  from October 1995 to February  1998. Mr. Bauman was Vice President and
General Manager, Software Group, Farallon Communications (now Netopia) from 1993
until September 1995.

     Joshua  W.  Soske has  served as our  Executive  Vice  President  and Chief
Technology  Officer since August 1999, as a director since our inception and was
one of our  founders.  Mr. Soske  served as our  President  and Chief  Executive
Officer from  inception  until August 1999. He has been President and founder of
International  Design  and  Research,  a  communications  consulting  firm which
provides management,  architectural design and contract  manufacturing  services
dealing  primarily with  telephone,  data network,  and television  technologies
since March 1979.

     T. Diane  Pewitt has served as our  Executive  Vice  President,  Research &
Development and Operations  since March 2001. Ms. Pewitt was our Vice President,
Operations  from March 2000 until March 2001.  She served as Vice  President  of
Messaging for the service provider line of business for Lucent Technologies from
June 1999 to March 2000. She also served as the Vice President of Operations for
Lucent  Technologies'  Octel Messaging  Division from January 1998 to June 1999.
Ms. Pewitt was also Director of Operations  for Lucent from June 1994 to January
1998.

     Gaymond W. Schultz has served as our Executive  Vice  President  since July
1996 and was one of our founders.  Mr. Schultz was our Chief  Financial  Officer
from March 1997 until July  1999.  Mr.  Schultz  was a partner at  International
Design and  Research  from 1994 to June 1996.  Additionally,  Mr.  Schultz was a
founder and served as Vice President of Engineering of StrataCom,  a provider of
wide area data networking equipment, from 1985 to 1999.

     Stanley  E.  Kazmierczak  has  served as our Vice  President,  Finance  and
Administration,  Chief  Financial  Officer and  Secretary  since July 1999.  Mr.
Kazmierczak  served as Chief Financial  Officer and Vice President,  Finance and
Operations of Digital Link, a supplier of networking products, from January 1999
to July 1999, and as Chief Financial Officer from December 1992 to July 1999. He
was Vice President,  Finance and  Administration of Digital Link from March 1996
to January 1999.

     Thomas J.  Barsi has  served as our Vice  President,  Business  Development
since January 2000. Mr. Barsi served as our Director of Marketing until December
1999 and our  Director of Sales from  January  1999 to December  1999.  Prior to
joining us, he was  Director of  Marketing  responsible  for the product line of
high-end business products for Pacific Bell Internet from June 1995 to July 1996
and a product manager at Pacific Bell Internet from September 1994 to June 1995.

     Julie P. Cotton has served as our Vice  President,  Human  Resources  since
June 2000.  Ms.  Cotton was Vice  President,  Human  Resources at Pilot  Network
Services, an Internet security company, from April 1999 to June 2000. She worked
as a management  consultant  from April 1998 to April 1999.  Ms. Cotton was also
Director of Organizational  Effectiveness for Applied Materials,  a manufacturer
of semiconductor capital equipment,  from October 1995 to April 1998. For a year
prior  to  her  position  with  Applied  Materials,  Ms.  Cotton  worked  as  an
independent consultant.

     Kay E.  Kienast  has served as our Vice  President,  Marketing  since March
2000. Ms. Kienast was Vice  President,  NSA Marketing at Newbridge  Networks,  a
manufacturer of telecommunications  equipment from August 1998 to June 1999. She
was Vice  President,  Marketing  at  Cincinnati  Bell  Information  Systems from
January  1998 to  August  1998  and was  Director  of  Marketing  at  Unisys,  a
telecommunications  equipment manufacturer,  from November 1995 to January 1998.
She  was  Manager,   Strategy,   Planning  and  Research  at  Digital  Equipment
Corporation from mid 1993 to November 1995.

     John W. Neese has served as our Vice  President,  Engineering  since  March
2000. Mr. Neese was our  Engineering  Director from August 1996 to February 2000
and Chief Financial Officer and Secretary from August 1996 to March 1997. He was
Engineering Director at Corsair Communications, a manufacturer of cellular fraud
detection products, from August 1995 to August 1996.

     C. Reid  Thomas has served as our Vice  President,  Sales since April 2000.
Mr. Thomas served as Managing Director, Sales for Lucent Technologies,  where he
was  responsible  for AT&T Markets from August 1996 to April 2000.  Prior to his
employment with Lucent, Mr. Thomas was Group Manager, Strategy and Alliances for
Octel Communications, from January 1995 to August 1996.

                                     PART II

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

     Our common stock has been traded on the Nasdaq National  Market  ("Nasdaq")
under the symbol "VINA" since our initial public  offering.  The following table
sets forth, for the periods indicated, the range of high and low sales prices of
our common stock on Nasdaq as reported in its consolidated transaction reporting
system.

    Fiscal Year 2000                                 High        Low
    ----------------                                 ----        ---
    Third Quarter (from August 10, 2000)........   $24.000     $12.250
    Fourth Quarter..............................   $14.250     $ 3.063

     The last  reported  sale of our common  stock on Nasdaq was $1.875 on March
20, 2001. As of March 20, 2001, the common stock was held by 460 stockholders of
record.

     We have never  declared or paid  dividends on our capital  stock and do not
anticipate paying any dividends in the foreseeable future.

     On August 9, 2000, the SEC declared effective our Registration Statement on
Form S-1 (No. 333-36398),  relating to the initial public offering of our common
stock.  The managing  underwriters  in the offering were Lehman  Brothers  Inc.,
Thomas  Weisel  Partners LLC and U.S.  Bancorp  Piper  Jaffray Inc. The offering
commenced  on August 10, 2000,  and was closed on August 15, 2000,  after we had
sold  all  of  the  3,000,000  shares  of  common  stock  registered  under  the
Registration  Statement.  On September  15,  2000,  the  underwriters  purchased
450,000  shares from us in  connection  with the  exercise of the  underwriters'
over-allotment  option.  The initial public offering price was $12 per share for
an aggregate  initial  public  offering of $41.4 million  (including the 450,000
shares sold to the  underwriters  upon exercise of the  over-allotment  option),
netting proceeds of approximately $36.4 million to us after underwriting fees of
approximately  $2.9 million and other offering  expenses of  approximately  $2.1
million.  None of these  fees  and  expenses  was paid to any of our  directors,
officers, or general partners or their associates, persons owning 10% or more of
any class of our equity securities or any affiliate of VINA.

     From August 10, 2000, the effective date of our Registration  Statement, to
December 31, 2000, the ending date of the reporting period, we have not used any
of our net proceeds from our initial public offering. For more information,  see
Item 7 of this  report on page 21,  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations".



<PAGE>


Item 6.  Selected Consolidated Financial Data

     The  following  selected  consolidated  financial  data  should  be read in
conjunction with  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations" and with our  consolidated  financial  statements and
related  notes to  consolidated  financial  statements  included  in this Annual
Report on Form 10-K. The  consolidated  statements of operations for each of the
years in the three-year  period ended  December 31, 2000,  and the  consolidated
balance sheet data at December 31, 1999 and 2000, are derived from  consolidated
financial  statements  which are  included  in the Form 10-K.  The  consolidated
statement  of  operation  data set forth below for the period from June 21, 1996
(inception) through December 31, 1996 and for the fiscal year ended December 31,
1997 and the  consolidated  balance sheet data as of December 31, 1996, 1997 and
1998 have been derived from our consolidated  financial  statements not included
in this  Form  10-K.  The  historical  operating  results  are  not  necessarily
indicative of future operating results.

<TABLE>

<CAPTION>
                                                 Period from
                                                June 21, 1996
                                                 (inception)
                                                   through                             Years Ended December 31,
                                                 December 31,      ---------------------------------------------------------------
                                                     1996               1997            1998             1999             2000
                                                --------------     ------------ --- ------------ -- ------------- --- ------------
                                                                                (in thousands, except per share data)
Consolidated Statements of Operations Data:
<S>                                               <C>               <C>              <C>               <C>             <C>
Net revenue ...................................   $     --          $    579         $  4,393          $ 12,700        $ 32,078
Cost of revenue ...............................                          542            2,054             7,713          19,240
                                                  --------           --------        --------          --------        --------
Gross profit ..................................         --                37            2,339             4,987          12,838
                                                  --------           --------        --------          --------        --------

Costs and expenses:
   Research and development ...................        499             1,906            4,174             6,690          12,609
   Selling, general and
          administrative ......................        342             2,532            6,414            10,881          21,124
   Stock-based
       compensation* ..........................                           79              154             4,715          24,169
                                                  --------          --------         --------          --------        --------
       Total costs and expenses ...............        841             4,517           10,742            22,286          57,902
                                                  --------          --------         --------          --------        --------
Loss from operations ..........................       (841)           (4,480)          (8,403)          (17,299)        (45,064)
Interest income, net ..........................          9               165              413               223           1,732
                                                  --------          --------         --------          --------        --------
Net loss ......................................   $   (832)         $ (4,315)        $ (7,990)         $(17,076)       $(43,332)
                                                  ========          ========         ========          ========        ========

Net loss per share, basic and
     diluted (1)

                                                       N/A          $  (4.83)        $  (2.63)         $  (3.30)       $  (2.63)
                                                  ========          ========         ========          ========        ========
Shares used in computation, basic
    and diluted (1) ...........................         --               894            3,038             5,169          16,467
                                                  ========          ========         ========          ========        ========

</TABLE>



<PAGE>

<TABLE>

<CAPTION>


---------------------------
* Stock-based compensation:


<S>                                            <C>                 <C>              <C>             <C>              <C>
  Cost of revenue......................        $       --          $       --       $       2       $      152       $    1,855
  Research and development.............                --                  36              78            1,098            7,985
  Selling, general and
         administrative................                --                  43              74            3,465           14,329
                                               ----------          ----------      ----------       ----------       ----------
                                               $       --          $       79      $      154       $    4,715       $   24,169
                                               ==========          ==========      ==========       ==========       ==========

</TABLE>

<TABLE>
<CAPTION>
                                                                            As of December 31,
                                                  -----------------------------------------------------------------------
                                                      1996          1997          1998           1999          2000
                                                      ----          ----          ----           ----          ----
                                                                              (in thousands)

Consolidated Balance Sheet Data:
<S>                                               <C>           <C>           <C>            <C>           <C>
Cash, cash equivalents and
    Short-term investments..................      $    5,049    $    3,543    $   11,359     $     2,568   $   44,499
Working capital (deficit)...................           4,842         2,896        11,058            (492)      40,657
Total assets................................           5,314         4,524        14,456           6,673       58,536
Long-term debt, less current portion........             129           400           655             534            0
Total stockholders' equity..................           4,917         3,233        11,549             348       44,829

</TABLE>

--------------------------------------------------------------------------------
(1)  The diluted net loss per share  computation  excludes  potential  shares of
     common stock issuable  pursuant to convertible  preferred stock and options
     to purchase  common  stock,  as well as common stock  subject to repurchase
     rights held by us, as their effect would be antidilutive. See Notes 1 and 7
     of notes to consolidated financial statements for a detailed explanation of
     the  determination  of the shares used in  computing  basic and diluted net
     loss per share.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

     This  section  and  other  parts  of this  report  contain  forward-looking
statements that involve risks and uncertainties. Our actual results could differ
materially  from  those  anticipated  in  forward  looking  statements  for many
reasons,  including but not limited to the risks  discussed in this report under
the heading  "Other Factors That May Affect  Results." The following  discussion
and analysis should be read in conjunction with "Selected Consolidated Financial
Data" and the  Consolidated  Financial  Statements  and related  notes  included
elsewhere in this Annual Report on Form 10-K.

Recent Developments

     On February 27, 2001, we acquired  Woodwind  Communications  Systems,  Inc.
("Woodwind"),  a provider of voice-over-broadband network edge access solutions.
The aggregate acquisition price consisted of approximately 4.1 million shares of
VINA common stock,  $7.5 million in cash and the assumption of Woodwind  options
to purchase  approximately  1.4 million shares of common stock.  The transaction
will be accounted for as a purchase.

Overview

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

     From our  inception  in June 1996  through  February  1997,  our  operating
activities  related  primarily to  developing  and testing  prototype  products,
commencing  the staffing of our sales and  customer  service  organizations  and
establishing  relationships  with  our  customers.  We  began  shipments  of our
Multiservice  T1 Integrator  product family in March 1997. In May 1999, we began
shipping our  Multiservice  Xchange product.  Since inception,  we have incurred
significant  losses, and as of December 31, 2000, we had an accumulated  deficit
of $73.5 million.

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

     Our customer  base is highly  concentrated.  A  relatively  small number of
customers  have  accounted  for a  significant  portion  of our  historical  net
revenue.  For the year  ended  December  31,  2000,  sales  to our five  largest
customers  accounted for approximately 75% of our net revenue, of which sales to
Lucent  Technologies,   Gabriel  Communications  and  Trivergent  Communications
accounted for 31%, 16% and 13% 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.  To  date,  international  sales  have  not  been
significant.  International  sales have been denominated  solely in U.S. dollars
and,  accordingly,  we have not been  exposed  to  significant  fluctuations  in
foreign currency exchange rates.

     Cost of revenue consists  primarily of costs of products  manufactured by a
third-party contract manufacturer, component costs, depreciation of property and
equipment,  personnel  related  costs to manage the  contract  manufacturer  and
warranty costs,  and excludes  amortization of deferred stock  compensation.  We
conduct program  management,  manufacturing  engineering,  quality assurance and
documentation  control at our  facility  in Newark,  California.  Currently,  we
outsource   our   manufacturing   and  testing   requirements   to   Flextronics
International  Ltd.  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, costs of
components and sub-assemblies, costs from our contract manufacturers and the mix
of products or system  configurations sold.  Additionally,  our gross margin may
fluctuate  due to changes in our mix of  distribution  channels.  Currently,  we
derive the  majority of our net revenue from sales made to our OEM  customer.  A
significant  increase  in the  proportion  of net  revenue  derived  from an OEM
customer would adversely impact or reduce our gross margin.

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

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

     For the years  ended  December  31,  1998,  1999 and 2000,  we  recorded an
aggregate of $54.6 million in deferred stock  compensation  to be amortized over
the  vesting  period.  In  addition,  we recorded  an  aggregate  of $734,000 in
stock-based  compensation  related to stock options granted to non-employees for
services.  The deferred stock  compensation  recorded  represents the difference
between the deemed fair market  value of our common  stock at the time of option
grants during these periods and the exercise  prices of these options.  As there
was no public market for our common  stock,  the fair market value of our common
stock on option grant dates was  determined  by our board of directors  prior to
our initial public  offering.  The board of directors in their  determination of
fair  market  value took into  consideration  many  factors  including,  but not
limited to, our  financial  performance,  current  economic  trends,  actions by
competitors,  market maturity, emerging technologies,  near-term backlog and, in
some circumstances, valuation analyses performed by independent appraisers using
generally  accepted  valuation  methodologies  such  as the  income  and  market
approaches.  We are  amortizing  deferred  stock  compensation  using a multiple
option  award  valuation  approach  over the vesting  periods of the  applicable
options,  which is generally  four years.  The  amortization  of deferred  stock
compensation,  based upon options granted through December 31, 2000, is expected
to be $16.6  million in 2001,  $7.1  million in 2002,  $2.4  million in 2003 and
$286,000 thereafter.

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

     From  inception  through  December  31,  2000,  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, 2000,  we had $40.8 million of federal
and $26.5 million of state net  operating  loss  carryforwards  to offset future
taxable  income  that  expire  in  varying   amounts   through  2020  and  2005,
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.  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  provided
by 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.

         Results of Operations

     The  following  table  sets  forth  selected  consolidated   statements  of
operations  data as a percentage of net revenue for the periods  indicated.  For
purposes of this table, cost of revenue, gross profit, research and development,
and  selling,  general and  administrative  amounts do not  include  stock-based
compensation.

<TABLE>

<CAPTION>

                                                   Years Ended December 31,
                                         -----------------------------------------------
                                              1998            1999             2000
                                           -----------     ------------    -------------
<S>                                           <C>             <C>             <C>
Net revenue..............................     100.0%          100.0%          100.0%
Cost of revenue..........................      46.8            60.7            60.0
                                           -----------     ------------    -------------
Gross profit.............................      53.2            39.3            40.0
                                           -----------     ------------    -------------
Costs and expenses:
   Research and development..............      95.0            52.7            39.3
   Selling, general and administrative...     146.0            85.7            65.9
   Stock-based compensation..............       3.5            37.1            75.3
                                           -----------     ------------    -------------
Total costs and expenses.................     244.5           175.5           180.5
                                           -----------     ------------    -------------
Loss from operations.....................    (191.3)         (136.2)         (140.5)
Interest income, net.....................       9.4             1.8             5.4
                                           -----------     ------------    -------------
Net loss.................................    (181.9)%        (134.4)%        (135.1)%
                                           ===========     ============    =============
</TABLE>


         Fiscal Years Ended December 31, 2000, 1999 and 1998

     Net revenue.  Net revenue was $32.1 million in 2000,  $12.7 million in 1999
and $4.4  million in 1998.  The 152%  increase in net revenues in 2000 over 1999
was primarily due to increased unit sales to existing customers and sales to new
customers.  The  increase  in net  revenue  in  1999  over  1998  was  primarily
attributable to sales of our  Multiservice  Xchange  products  introduced in the
second  quarter of 1999 and increased  unit sales of other  products,  offset by
price  reductions  effected in the second  quarter of 1999. In 1999, net revenue
would have been $4.7 million higher absent these price reductions.

     Cost of revenue. Cost of revenue was $19.2 million in 2000, $7.7 million in
1999 and $2.1 million in 1998.  Gross profit  increased to $12.8 million in 2000
from $5.0  million in 1999 and $2.3 million in 1998.  Gross margin  increased to
40.0% in 2000 from 39.3% in 1999 due  primarily to cost  reductions  on existing
products and higher margins on new products.  Gross margin decreased to 39.3% in
1999 from  53.2% in 1998,  primarily  due to price  reductions  effected  in the
second  quarter of 1999.  We  anticipate  that our gross  margin may continue to
fluctuate  due  to  many  factors,   including  competitive  pricing  pressures,
fluctuations in manufacturing  volumes,  costs of components and sub-assemblies,
costs  from  our  contract   manufacturers,   the  mix  of  products  or  system
configurations sold and changes in our mix of distribution channels.

     Research  and  development  expenses.  Research  and  development  expenses
increased to $12.6 million in 2000 from $6.7 million in 1999 and $4.2 million in
1998.  These  increases were primarily a result of additional  personnel  costs,
higher  prototype  expenses  and higher  consulting  costs  associated  with our
continuing   research  and  development   efforts.  We  believe  that  continued
investment  in research and  development  is critical to attaining our strategic
product and cost reduction objectives, and as a result, we expect these research
and development expenses to increase in absolute dollars in the future. Research
and development  expenses decreased as a percentage of net revenue from 95.0% in
1998 to 52.7% in 1999 and 39.3% in 2000.  These  decreases  were a result of net
revenue increasing at a rate faster than research and development expenses.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative expenses increased to $21.1 million in 2000 from $10.9 million in
1999 and $6.4 million in 1998.  These  increases were primarily  attributable to
increased  personnel  costs,  including  hiring  of  additional  sales  and  key
management  personnel,  as well as  increased  recruiting  costs  and  increased
promotional expenses,  including trade shows and advertising.  Selling,  general
and administrative expenses decreased as a percentage of net revenue from 146.0%
in 1998, to 85.7% in 1999 and 65.9% in 2000.  These  decreases  were a result of
net revenue increasing at a rate faster than selling, general and administrative
expenses.  We intend to actively participate in marketing,  business development
activities and selling and promotional programs,  substantially expand our field
sales operations and customer support organizations and build our infrastructure
to support our anticipated business growth and operation as a public company. As
a result,  we expect expenses  related to these programs to continue to increase
substantially in absolute dollars in the future.

     Stock-based compensation.  We recorded deferred stock compensation of $36.4
million  in  2000,  $17.8  million  in  1999  and  $394,000  in 1998  for  which
amortization  of deferred  stock  compensation  was $23.5 million in 2000,  $4.6
million  in 1999 and  $154,000  in 1998.  Stock-based  compensation  related  to
options issued to non-employees for services was $99,000 in 1999 and $635,000 in
2000.

     Interest income,  net.  Interest  income,  net increased to $1.7 million in
2000 from $223,000 in 1999.  This increase was primarily  attributable to higher
cash  balances  resulting in higher  interest  income  earned offset by interest
expense on bank  loans.  Interest  income  decreased  to  $223,000  in 1999 from
$413,000 in 1998. This decrease was primarily attributable to lower cash balance
resulting in lower interest income earned.

Liquidity and Capital Resources

     Since inception,  we have satisfied our cash requirements primarily through
private sales of convertible  preferred  stock which generated gross proceeds of
approximately  $48.8 million  prior to our initial  public  offering.  In August
2000,  we completed  an initial  public  offering of 3,450,000  shares of common
stock at a price of $12.00 per share,  resulting  in proceeds  of  approximately
$36.4 million net of underwriters discount and offering expenses. As of December
31, 2000, we had cash,  cash  equivalents  and  short-term  investments of $44.5
million.

     Net cash used in  operating  activities  was $18.1  million  in 2000,  $9.1
million in 1999,  and $8.1 million in 1998.  Cash used in  operating  activities
resulted  primarily  from net  losses  from  operations  offset  by  stock-based
compensation  and increases in accrued  liabilities and accounts payable in each
period.

     Net cash used in investing  activities  was $39.3  million in 2000 and $4.7
million in 1998, primarily  reflecting  purchases of short-term  investments and
property plant and equipment. Net cash provided by investing activities was $3.1
million in 1999 primarily due to proceeds from the sale of investments.

     Cash  provided by  financing  activities  was $62.5  million in 2000,  $1.2
million  in 1999  and  $16.6  in  1998.  In 2000,  cash  provided  by  financing
activities  was due  primarily to proceeds from our initial  public  offering in
August 2000 and the sale of convertible  preferred  stock in 2000. In 1999, cash
provided by financing  activities  was primarily due to issuance of common stock
and proceeds from issuance of long-term debt in 1998, cash provided by financing
activities was primarily due to issuance of convertible preferred stock.

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

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

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

New Accounting Standard

     Statement of Financial  Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all fiscal years
beginning after June 15, 2000. SFAS No. 133, as amended,  establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities.  Under SFAS
No. 133, certain contracts that were not formerly considered derivatives may now
meet the  definition  of a  derivative.  The  Company  will  adopt  SFAS No. 133
effective January 1, 2001.  Management has concluded its analysis of the effects
of adopting SFAS No. 133 and the adoption will not have a significant  impact on
the financial position, results of operations, or cash flows of the Company.

     In  December  1999,  the  Securities  and  Exchange  (SEC)  released  Staff
Accounting   Bulletin   (SAB)  No.  101,   "Revenue   Recognition  in  Financial
Statements."  This bulletin  summarized  certain  interpretations  and practices
followed  by the  Division  of  Corporation  Finance and the Office of the Chief
Accountant  of the  SEC in  administering  the  disclosure  requirements  of the
Federal securities laws in applying accounting  principles generally accepted in
the United States of America to revenue recognition in financial statements. The
adoption  of SAB No.  101 in  2000  had no  impact  on the  Company's  financial
position, results of operations or cash flows.


<PAGE>

RISKS FACTORS

                          Risks Related to Our Business

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

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

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

     We have incurred significant losses since inception and expect that our net
losses and negative cash flow from  operations will continue for the foreseeable
future.  We incurred net losses of  approximately  $8.0  million in 1998,  $17.1
million in 1999 and $43.3  million in 2000.  As of December 31, 2000,  we had an
accumulated deficit of approximately $73.5 million. To achieve profitability, we
will need to  generate  and  sustain  substantially  higher  net  revenue  while
maintaining reasonable cost and expense levels. We have large fixed expenses and
expect to continue to incur significant and increasing expenses for research and
development,  sales and marketing, customer support, developing direct sales and
distribution channels, and general and administrative expenses.

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

     We derive almost all of our net revenue from direct sales to a small number
of  telecommunications  customers  and our  indirect  sales  through  our  major
original  equipment  manufacturer,  or OEM,  customer that sells and markets our
products.  If we lose one of our customers or experience a delay or cancellation
of a significant  order or a decrease in the level of purchases  from any of our
customers,  our net revenue could decline and our operating results and business
could be harmed.  Our five largest customers  accounted for approximately 75% of
our net revenue for the fiscal year ended  December 31, 2000,  of which sales to
Lucent  Technologies,  Gabriel  Communications and Trivergent accounted for 31%,
16%  and  13%  of  our  net   revenue,   respectively.   We   expect   that  the
telecommunications industry will continue to experience consolidation. If any of
our  customers  is  acquired  by a  company  that  is one  of  our  competitors'
customers,  we may  lose its  business.  In  addition,  if our OEM  customer  is
acquired, we could lose that customer. For example,  Intermedia  Communications,
one of our service provider  customers,  was recently  acquired by MCI Worldcom.
Also, the ultimate  business success of our direct service  provider  customers,
our OEM customer and 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.  In addition,  any difficulty in collecting amounts due
from one or more of our key  customers  could  harm our  operating  results  and
financial condition. If any of these events occur, our net revenue could decline
and our operating results and business could be harmed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Since inception, our order backlog at the beginning of each quarter has not
been  significant,  and we expect  this trend to  continue  for the  foreseeable
future.  Our backlog as of December  31, 2000 was  approximately  $3.3  million.
Accordingly,  we must  obtain  substantial  additional  orders in a quarter  for
shipments  in that  quarter to achieve  our net  revenue  objectives.  Our sales
agreements allow  purchasers to delay scheduled  delivery dates without penalty.
Our customer  purchase  orders also allow  purchasers  to cancel  orders  within
negotiated time frames without significant penalty. In addition,  due in part to
factors such as the timing of product release dates, purchase orders and product
availability,  significant volume shipments of our products could occur near the
end of our fiscal quarters. If we fail to ship products by the end of a quarter,
our operating results could be adversely affected for that quarter.

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

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

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

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

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

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

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

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

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

     We have  rapidly  and  significantly  expanded  our  operations  in  recent
periods. This expansion  significantly  strains our managerial,  operational and
financial  resources.  Some of our senior management  personnel joined us within
the last 12 months. Our Vice President of Marketing, Executive Vice President of
Research and Development  and Operations,  Vice President of Human Resources and
Vice  President of Sales have all joined us since  January  2000.  To manage the
expected growth of our operations and personnel, we will be required to:

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

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

o  expand access to additional manufacturing capacity;

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

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

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

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

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

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

o  difficulties adhering to international protocol standards;

o  expenses associated with customizing products for other countries;

o  protectionist laws and business practices that favor local competition;

o  reduced protection for intellectual property rights in some countries;

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

o  fluctuations in currency exchange rates;

o  political and economic instability; and

o  import or export licensing requirements.

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

     The  development  of new or enhanced  products  is a complex and  uncertain
process.  We and our OEM  manufacturers  have in the past and may in the  future
experience  design,  manufacturing,  marketing and other difficulties that could
delay or prevent the development,  introduction or marketing of new products and
enhancements. For example, we had expected to begin shipments of our MBX product
in the second  quarter of 2001  which has been  delayed to the third  quarter of
2001 because of continued development issues. Development costs and expenses are
incurred  before we generate any net revenues  from sales of products  resulting
from  these  efforts.   Our  total  research  and   development   expenses  were
approximately  $12.6  million in the year ended  December 31, 2000. We intend to
continue to incur  substantial  research and development  expenses,  which could
have a negative impact on our earnings in future periods.

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

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

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

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

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

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

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

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

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

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

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

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

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

        Risks Associated With The Multiservice Broadband Access Industry

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

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

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

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

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

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

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

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

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

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

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

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

o  evolving industry standards for transmission technologies and transport
   protocols;

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

o  domestic and foreign government regulation; and

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

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

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

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

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

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

                Additional Risks That May Affect Our Stock Price

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.

     On August 10, 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  National  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  above historical levels.  These trading prices and valuations may
not be  sustainable.  These broad market and  industry  factors may decrease the
market  price  of  our  common  stock,   regardless  of  our  actual   operating
performance.

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

     We may review  acquisition  prospects and strategic  investments that could
complement our current product offerings,  augment our market coverage,  enhance
our technical capabilities or otherwise offer growth opportunities. For example,
on February 27,  2001,  we acquired  Woodwind  Communications  Systems,  Inc., a
provider of  voice-over-broadband  network edge access solutions.  The aggregate
acquisition  price consisted of approximately  4.1 million shares of VINA common
stock,  $7.5 million in cash, and the assumption of Woodwind options to purchase
approximately  1.4  million  shares  of common  stock.  The  issuance  of equity
securities  in  connection  with  these   acquisitions   or  investments   could
significantly  dilute our  investors.  If we incur or assume debt in  connection
with these acquisitions or investments, we may incur interest charges that could
increase our net loss.  We have little  experience  in  evaluating,  completing,
managing or integrating acquisitions and strategic investments. Acquisitions and
strategic  investments may entail numerous integration risks and impose costs on
us, including:

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

o unanticipated costs;

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

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

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

o assumption of contingent liabilities;

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

o incurrence of significant write-offs.

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

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

Substantial  future sales of our common  stock in the public  market could cause
our stock price to fall.

     Additional sales of our common stock in the public market after our initial
public offering,  or the perception that such sales could occur, could cause the
market  price of our  common  stock to  decline.  As of March 20,  2001,  we had
36,912,420  shares of common  stock  outstanding.  Other  than the 3.45  million
shares sold in our public offering,  all of our outstanding  shares were subject
to a  lock-up  that  expired  on  February  7,  2001.  Accordingly,  most of our
outstanding  shares of common  stock are freely  transferable.  Sales of a large
number of these shares could decrease the market price of our common stock.

     In addition,  holders of approximately  17.7 million shares of common stock
have rights with respect to registration of these shares for sale to the public.
If these holders, by exercising their registration  rights, cause a large number
of securities to be registered  and sold in the public  market,  the sales could
decrease  the  market  price for our  common  stock.  If we were to include in a
company-initiated  registration  shares  held by these  holders  pursuant to the
exercise  of their  registration  rights,  these sales may hinder our ability to
raise needed capital.

Many corporate actions could 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.

     Our   directors,   executive   officers  and  their   affiliated   entities
beneficially  own  approximately  58% of our  outstanding  common  stock.  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,
including those who purchase shares in this offering.

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

     Provisions in our amended and 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.

     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 7A.  Quantitative and Qualitative Disclosures About Market Risk

     We are exposed to  financial  market  risks  related to interest  rates and
foreign  currency  exchange rates.  Our investments in commercial paper and debt
obligations are subject to interest rate risk, but due to the short-term  nature
of these investments,  interest rate changes would not have a material impact on
their value as of December 31, 2000. We had no such  investments  as of December
31, 1999.  We also had debt  obligations  of $1.0 million and $1.1 million as of
December 31, 1998 and 1999,  which bore interest on a prime plus fixed basis. We
had no debt  obligation  as of December 31,  2000.  We do not hedge any interest
rate exposures and a hypothetical change of 10% in interest rates would not have
a material impact on the fair market value of these debt  obligations.  To date,
our  international  sales  have been  denominated  solely in U.S.  dollars,  and
accordingly,  we have not been  exposed to foreign  currency  rate  fluctuations
related  to  sales  transactions.   However,  the  functional  currency  of  our
subsidiary in the United  Kingdom is the U.S.  dollar and as the local  accounts
are maintained in British pounds,  we are subject to foreign  currency  exchange
rate fluctuations  associated with remeasurement to U.S. dollars. A hypothetical
change of 10% in the foreign  currency  exchange rates would not have a material
impact on our consolidated financial position or the results of operations.



<PAGE>


Item 8.  Financial Statements and Supplementary Data

                 Index to Consolidated Financial Statements
<TABLE>

<CAPTION>


<S>                                                                                                    <C>
                                                                                                        Page
 Independent Auditors' Report........................................................................    44
 Consolidated Balance Sheets as of December 31, 1999 and 2000........................................    45
 Consolidated Statements of Operations for the Years Ended December 31, 1998, 1999 and 2000 .........    46
 Consolidated Statement of Stockholders' Equity and Comprehensive Loss for the Years ended
  December 31, 1998, 1999 and 2000...................................................................    47
 Consolidated Statements of Cash Flows for the Years Ended December 31, 1998, 1999 and 2000..........    49
 Notes to the Consolidated Financial Statements......................................................    50

</TABLE>




<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
VINA Technologies, Inc.:

     We have  audited  the  accompanying  consolidated  balance  sheets  of VINA
Technologies,  Inc. and its  subsidiaries  (the Company) as of December 31, 1999
and 2000, and the related consolidated  statements of operations,  stockholders'
equity and comprehensive loss, and cash flows for each of the three years in the
period  ended   December  31,  2000.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

     In our opinion,  such consolidated  financial statements present fairly, in
all material respects, the financial position of VINA Technologies, Inc. and its
subsidiaries at December 31, 1999 and 2000, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 2000 in conformity  with  accounting  principles  generally  accepted in the
United States of America.

DELOITTE & TOUCHE LLP

San Jose, California
January 22, 2001 (February 28, 2001 as to Note 13)







<PAGE>


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

<CAPTION>
                                                                                          December 31,
                                                                                  ------------------------
                                                                                       1999         2000
                                                                                       ----         ----
ASSETS
Current assets:
<S>                                                                                <C>          <C>
  Cash and cash equivalents ....................................................   $   2,568    $   7,740
  Short-term investments .......................................................          --       36,759
  Accounts receivable, net of allowance of $221 in 1999 and $335 in 2000 .......       2,469        5,243
  Inventories ..................................................................          96        1,973
  Prepaid expenses and other ...................................................         166        2,649
                                                                                   ---------    ---------
      Total current assets .....................................................       5,299       54,364
Property and equipment, net ....................................................       1,356        4,096
Other assets ...................................................................          18           76
                                                                                   ---------    ---------
      Total assets .............................................................   $   6,673    $  58,536
                                                                                   =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable .............................................................   $   3,521    $   8,536
  Accrued compensation and related benefits ....................................         891        2,588
  Accrued warranty .............................................................         449          686
  Other current liabilities ....................................................         410        1,897
  Current portion of long-term debt ............................................         520           --
                                                                                   ---------    ---------
      Total current liabilities ................................................       5,791       13,707
                                                                                   ---------    ---------
Long-term debt .................................................................         534           --
                                                                                   ---------    ---------

Commitments and Contingencies (Note 6)

Stockholders' equity:
  Convertible  preferred  stock;  $0.0001 par value;  shares  authorized:
   1999, 15,000,000; 2000, 5,000,000; aggregate liquidation preference
   of $24,993 in 1999:
    Series A, B, C and D; aggregate shares issued and outstanding: 1999,
     14,290,517; 2000, none ....................................................           1           --
  Common stock; $0.0001 par value; shares authorized:  1999, 35,000,000;
    2000, 125,000,000; shares outstanding: 1999, 8,746,081; 2000, 32,546,845 ...           1            3
  Additional paid-in capital ...................................................      44,081      144,708
  Deferred stock compensation ..................................................     (13,523)     (26,386)
  Accumulated deficit ..........................................................     (30,212)     (73,544)
  Accumulated other comprehensive income .......................................          --           48
                                                                                   ---------    ---------

      Total stockholders' equity ...............................................         348       44,829

                                                                                   ---------    ---------
      Total liabilities and stockholders' equity ...............................   $   6,673    $  58,536
                                                                                   =========    =========

</TABLE>

                 See notes to consolidated financial statements


<PAGE>


                             VINA TECHNOLOGIES, INC.
                      Consolidated Statements of Operations
                    (In thousands, except per share amounts)

<TABLE>

<CAPTION>

                                                        Years Ended
                                                        December 31,
                                               ---------------------------------
                                                   1998       1999        2000
                                                  -----       -----      -----

<S>                                             <C>         <C>         <C>
Net revenue .................................   $  4,393    $ 12,700    $ 32,078
Cost of revenue
  (excluding stock-based compensation) ......      2,054       7,713      19,240
                                                --------    --------    --------
Gross profit
  (excluding stock-based compensation) ......      2,339       4,987      12,838
                                                --------    --------    --------
Costs and expenses:
  Research and development
    (excluding stock-based compensation) ....      4,174       6,690      12,609
  Selling, general and administrative
    (excluding stock-based compensation) ....      6,414      10,881      21,124
  Stock-based compensation* .................        154       4,715      24,169
                                                --------    --------    --------
      Total costs and expenses ..............     10,742      22,286      57,902
                                                --------    --------    --------
Loss from operations ........................     (8,403)    (17,299)    (45,064)
Interest income .............................        493         355       1,757
Interest expense ............................        (80)       (132)        (25)
                                                --------    --------    --------
Net loss ....................................   ($ 7,990)   ($17,076)   ($43,332)
                                                ========    ========    ========

Net loss per share, basic and diluted .......   ($  2.63)   ($  3.30)   ($  2.63)
                                                ========    ========    ========
Shares used in computation, basic and diluted      3,038       5,169      16,467
                                                ========    ========    ========

---------------------------
*  Stock-based compensation:
      Cost of revenue .......................   $      2    $    152    $  1,855
      Research and development ..............         78       1,098       7,985
      Selling, general and administrative ...         74       3,465      14,329
                                                --------    --------    --------
                                                $    154    $  4,715    $ 24,169
                                                ========    ========    ========

</TABLE>




                 See notes to consolidated financial statements





<PAGE>

                            VINA TECHNOLOGIES, INC.
     Consolidated Statements of Stockholders' Equity and Comprehensive Loss
                      (In thousands, except share amounts)

<TABLE>

<CAPTION>



<S>                                        <C>            <C>         <C>         <C>          <C>         <C>          <C>
                                                  Convertible
                                               Preferred Stock            Common Stock        Additional                  Deferred
                                               ---------------            ------------         Paid-In    Subscription     Stock
                                             Shares        Amount     Shares        Amount     Capital     Receivable  Compensation
                                             ------        ------     ------        ------     -------     ----------  ------------

<S>                                        <C>            <C>         <C>         <C>          <C>         <C>          <C>
Balances, January 1, 1998...............   10,500,000     $       1   6,173,450    $      1    $  8,498     $      --   $      (121)

Comprehensive loss:
   Net loss ............................           --            --          --          --          --            --            --
Exercise of stock options ..............           --            --     608,468          --         187            --            --
Repurchase of common stock .............           --            --    (100,000)         --         (12)           --            --
Sale of Series C convertible preferred
  stock (net of issuance costs of $655).    3,000,000            --          --          --      11,345            --            --
Sale of Series D convertible preferred .
  stock (net of issuance costs of $21)..      779,771            --          --          --       4,657            --            --
Subscription receivable ................           --            --          --          --          --           (25)           --
Deferred stock compensation ............           --            --          --          --         394            --          (394)
Amortization of deferred stock
  compensation .........................           --            --          --          --          --            --           154
                                           ----------------------------------------------------------------------------------------
Balances, December 31, 1998.............   14,279,771             1   6,681,918           1      25,069           (25)         (361)
Comprehensive loss:
   Net loss ............................           --            --          --          --          --            --            --
Exercise of stock options ..............           --            --   1,608,497          --         608            --            --
Repurchase of common stock .............           --            --    (344,334)         --         (18)           --            --
Sale of common stock ...................           --            --     800,000          --         480            --            --
Sale of Series D convertible preferred
  stock.................................       10,746            --          --          --          65            --            --
Receipt of subscription receivable......           --            --          --          --          --            25            --
Issuance of non-employee stock options
  for services.......... ...............           --            --          --          --          99            --            --
Deferred stock compensation ............           --            --          --          --      17,778            --       (17,778)
Amortization of deferred stock
  compensation .........................           --            --          --          --          --            --         4,616
                                           ----------------------------------------------------------------------------------------
Balances, December 31, 1999.............   14,290,517             1   8,746,081           1      44,081            --       (13,523)
Comprehensive loss:
   Net loss ............................           --            --         --           --          --            --            --
   Other comprehensive
     income, net of tax:
   Unrealized gain on available-for-
     sale investments...................           --            --          --          --          --            --            --
     Comprehensive loss ................           --            --          --          --          --            --            --
Exercise of stock options ..............           --            --   3,081,973          --       3,573            --            --
Repurchase of common stock .............           --            --    (425,866)         --        (231)           --            --
Sale of Series E convertible preferred
  stock (net of issuance of costs of $8)    3,404,140             1          --          --      23,820            --            --
Issuance of common stock (net of
  issuance costs of $4,967).............           --            --   3,450,000          --      36,433            --            --
Issuance of non-employee stock option
  for services .........................           --            --         --           --         635            --            --
Conversion of convertible preferred
  stock ................................  (17,694,657)           (2) 17,694,657           2          --            --            --
Deferred stock compensation ............           --            --          --          --      36,397            --       (36,397)
Amortization of deferred stock
  compensation..........................           --            --          --          --          --            --        23,534
                                           ----------------------------------------------------------------------------------------
Balances, December 31, 2000.............           --     $      --  32,546,845    $      3   $ 144,708    $       --     $ (26,386)
                                           ========================================================================================

</TABLE>


                 See notes to consolidated financial statements



<PAGE>

                             VINA TECHNOLOGIES, INC.
     Consolidated Statements of Stockholders' Equity and Comprehensive Loss
                      (In thousands, except share amounts)

<TABLE>

<CAPTION>




                                                           Accumulated
                                                              Other
                                             Accumulated   Comprehensive    Stockholders'  Comprehensive
                                               Deficit        Income          Equity           Loss
                                               -------        ------          ------           ----

<S>               <C>                         <C>             <C>           <C>             <C>
Balances, January 1, 1998...............      $  (5,146)           --       $   3,233
Comprehensive loss:
   Net loss ............................         (7,990)           --          (7,990)      $ (7,990)
                                                                                             ========
Exercise of stock options ..............             --            --             187
Repurchase of common stock .............             --            --             (12)
Sale of Series C convertible preferred
  stock (net of issuance costs of $655).             --            --          11,345

Sale of Series D convertible preferred
   stock (net of issuance costs of $21).             --            --           4,657
Subscription receivable ................             --            --             (25)
Deferred stock compensation ............             --            --              --
Amortization of deferred stock
   compensation ........................             --            --             154
                                          ----------------------------------------------------

Balances, December 31, 1998.............        (13,136)           --          11,549
Comprehensive loss:
   Net loss ............................        (17,076)           --         (17,076)      $(17,076)
                                                                                            =========
Exercise of stock options ..............             --            --             608
Repurchase of common stock .............             --            --             (18)
Sale of common stock ...................             --            --             480
Sale of Series D convertible preferred
   stock................................             --            --              65
Receipt of subscription receivable......             --            --              25
Issuance of non-employee stock
   options for service ...............               --            --              99
Deferred stock compensation ............             --            --              --
Amortization of deferred
   stock compensation...................             --            --           4,616
                                          ----------------------------------------------------

Balances, December 31, 1999.............        (30,212)           --             348
Comprehensive loss:
   Net loss ............................        (43,332)           --         (43,332)      $(43,332)
   Other comprehensive
     income, net of tax:
   Unrealized gain on available-for-
     sale investments...................             --            48              48             48

     Comprehensive loss ................             --            --              --       $(43,284)
                                                                                            =========
Exercise of stock options ..............             --            --           3,573
Repurchase of common stock .............             --            --            (231)
Sale of Series E convertible preferred
   stock (net of issuance costs of $8)..             --            --          23,821
Issuance of common stock (net of
   (issuance costs of $4,967)...........             --            --          36,433
Issuance of non-employee stock
   options for services.................             --            --             635
Conversion of convertible preferred
   stock................................             --            --              --
Deferred stock compensation ............             --            --              --
Amortization of deferred stock
   compensation.........................             --            --          23,534
                                        ------------------------------------------------------
Balances, December 31, 2000.............     $  (73,544)           48       $  44,829
                                        ======================================================

</TABLE>
                 See notes to consolidated financial statements


<PAGE>

                             VINA TECHNOLOGIES, INC.
                      Consolidated Statements of Cash Flows
                                 (In thousands)
<TABLE>

<CAPTION>

                                                                              Years Ended December 31,
                                                                           -------------------------------
                                                                            1998        1999       2000
                                                                            ----        ----       ----

Cash flows from operating activities:
<S>                                                                      <C>         <C>         <C>
  Net loss ...........................................................   $ (7,990)   $(17,076)   $(43,332)
  Reconciliation of net loss to net cash used in operating activities:
     Depreciation and amortization ...................................        299         640       1,042
     Stock-based compensation ........................................        154       4,715      24,169
     Accrued interest income on investments ..........................         --          --      (1,180)
     Changes in operating assets and liabilities:
        Accounts receivable ..........................................     (1,592)       (852)     (2,774)
        Inventories ..................................................        126         (88)     (1,877)
        Prepaid expenses and other ...................................       (243)        160      (2,483)
        Other assets .................................................        (42)         70         (58)
        Accounts payable .............................................        458       2,657       5,015
        Accrued compensation and related benefits ....................        303         441       1,697
        Accrued warranty .............................................        135         297         237
        Other current liabilities ....................................        313         (26)      1,455
                                                                           ------      ------     -------
           Net cash used in operating activities .....................     (8,079)     (9,062)    (18,089)
                                                                           ------      ------     -------

Cash flows from investing activities:
  Purchases of property and equipment ................................       (666)       (938)     (3,782)
  Purchases of short-term investments ................................     (6,004)     (3,994)    (50,499)
  Proceeds from sales/maturities of short-term investments ...........      2,000       7,998      15,000
                                                                           ------       -----     -------
          Net cash provided by (used in) investing activities ........     (4,670)      3,066     (39,281)
                                                                           ------       -----     -------

Cash flows from financing activities:
  Net proceeds from sale of convertible preferred stock ..............     15,977          90      23,821
  Net proceeds from sale of common stock .............................         --         480      36,433
  Proceeds from exercise of stock options ............................        187         608       3,573
  Repurchase of common stock .........................................        (12)        (18)       (231)
  Proceeds from issuance of long-term debt ...........................        666         464         375
  Repayments of long-term debt .......................................       (257)       (415)     (1,429)
                                                                           ------       -----      ------
         Net cash provided by financing activities ...................     16,561       1,209      62,542
                                                                           ------       -----      ------

Net change in cash and cash equivalents ..............................      3,812      (4,787)      5,172
Cash and cash equivalents, Beginning of year .........................      3,543       7,355       2,568
                                                                           ------      ------      ------
Cash and cash equivalents, End of year ...............................     $7,355      $2,568      $7,740
                                                                           ======      ======      ======
Noncash investing and financing activities:
     Deferred stock compensation......................................     $  394     $17,778     $36,397
                                                                           ======     =======     =======
     Conversion of convertible preferred stock into common stock......     $   --     $    --     $     2
                                                                           ======     =======     =======
     Unrealized gain on available-for-sale investments                     $   --     $    --     $    80
                                                                           ======     =======     =======

Supplemental disclosures of cash flow information:
  Cash paid for interest                                                   $   78     $   103     $    64
                                                                           ======     =======     =======

</TABLE>

                 See notes to consolidated financial statements


<PAGE>




                             VINA TECHNOLOGIES, INC.
                   Notes to Consolidated Financial Statements
                  Years Ended December 31, 1998, 1999 and 2000

1.       BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

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

     Basis of Presentation -- The consolidated  financial statements include the
accounts of VINA  Technologies,  Inc.  and its wholly  owned  subsidiaries.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

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

     Reclassifications  --  Certain  prior  year  amounts  in  the  accompanying
consolidated  financial  statements have been reclassified to conform to current
year  presentation.  These  reclassifications  had no effect on the consolidated
financial  position,  results of operations or cash flows for any of the periods
presented.

     Certain Significant Risks and Uncertainties -- Financial  instruments which
potentially  subject  the  Company  to  concentrations  of credit  risk  consist
primarily of cash equivalents,  short-term  investments and accounts receivable.
The Company only  invests its cash in highly  liquid and high  investment  grade
instruments.  The  Company  sells its  products  to  distributors  and end users
primarily in the United States and  generally  does not require its customers to
provide collateral or other security to support accounts  receivable.  To reduce
credit risk,  management  performs ongoing credit  evaluations of its customers'
financial  condition and maintains  allowances for estimated  potential bad debt
losses.

     The Company participates in a dynamic high technology industry and believes
that changes in any of the following areas could have a material  adverse effect
on the Company's future consolidated  financial position,  results of operations
or cash flows:  advances and trends in new technologies and industry  standards;
competitive pressures in the form of new products or price reductions on current
products;  changes in the overall  demand for  products  offered by the Company;
changes in certain strategic relationships or customer relationships; litigation
or claims against the Company based on intellectual property,  patent,  product,
regulatory  or other  factors;  risk  associated  with  changes in domestic  and
international  economic and/or political  conditions or regulations;  changes in
third party  manufacturers;  changes in  suppliers;  availability  of  necessary
product  components;  the  Company's  ability  to obtain  additional  capital to
support  operations;  the Company's ability to integrate acquired businesses and
the Company's  ability to attract and retain employees  necessary to support its
growth.

     Certain  components and  subassemblies  used in the Company's  products are
purchased from a sole supplier or a limited group of suppliers. In addition, the
Company  outsources  the production  and  manufacture of its access  integration
devices to a sole turnkey manufacturer.  Any manufacturing disruption,  shortage
of supply of products or components,  or the inability of the Company to procure
products or components from alternative sources on acceptable terms could have a
material  adverse  effect  on the  Company's  business,  consolidated  financial
condition and results of operations.

     Cash Equivalents -- The Company classifies all investments in highly liquid
debt instruments with maturities at the date of purchase of three months or less
as cash equivalents.

     Short-Term   Investments  --  Short-term  investments  consist  of  various
instruments  with  investment  grade  credit  ratings.   All  of  the  Company's
short-term  investments  are  classified  as  "available-for-sale"  based on the
Company's  intended  use and are  stated at fair  market  value  based on quoted
market prices. The difference between amortized cost and fair value representing
unrealized  holding gains or losses is recorded as a component of  stockholders'
equity, net of tax, as accumulated other comprehensive  income. Gains and losses
on sales are determined on a specific identification basis.

     Fair Value of Financial  Instruments -- The Company's financial instruments
include cash equivalents and short-term investments. Cash equivalents are stated
at cost which  approximates  fair market  value based on quoted  market  prices.
Short-term  investments  are stated at fair market value based on quoted  market
prices.

     Inventories  --  Inventories  are  stated at the  lower of cost  (first-in,
first-out method) or market.

     Property and  Equipment -- Property and  equipment  are stated at cost less
accumulated  depreciation and  amortization.  Depreciation is computed using the
straight-line  method  over  estimated  useful  lives of  three  to five  years.
Amortization of leasehold improvements is computed over the shorter of the lease
term or the estimated useful lives of the related assets.

     Long-Lived Assets -- The Company evaluates long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. An impairment loss would be recognized when the
sum of the undiscounted future net cash flows expected to result from the use of
the asset and its eventual  disposition is less than its carrying  amount.  Such
impairment loss would be measured as the difference  between the carrying amount
of the asset and its fair value based on the present  value of estimated  future
cash flows.

     Income  Taxes -- The Company  accounts  for income taxes under an asset and
liability  approach.  Deferred  income  taxes  reflect  the net tax  effects  of
temporary differences between the carrying amounts of assets and liabilities for
financial  reporting purposes and the amounts used for income tax purposes,  and
operating  loss and tax credit  carryforwards  measured  by  applying  currently
enacted tax laws.  A valuation  allowance is provided to reduce net deferred tax
assets to an amount that is more likely than not to be realized.

     Stock-Based  Compensation -- The Company accounts for stock-based awards to
employees  using the  intrinsic  value  method  in  accordance  with  Accounting
Principles  Board  Opinion  (APB)  No.  25,  "Accounting  for  Stock  Issued  to
Employees," and to  nonemployees  using the fair value method in accordance with
Statement of Financial  Accounting  Standards  (SFAS) No. 123,  "Accounting  for
Stock-Based Compensation."

     Revenue  Recognition -- Revenues are recognized when persuasive evidence of
an arrangement exists, delivery has occurred or services have been rendered, the
price is fixed and determinable and  collectibility is reasonably  assured.  For
sales to both  distributors and end users,  this generally occurs at the time of
shipment.  Net revenues  from software  upgrades sold to existing  customers are
also recognized upon shipment. For certain sales to distributors with collection
dependent on resale, net revenue  recognition occurs upon resale to end users. A
provision for estimated sales returns and warranty costs is recorded at the time
the product net revenue is recognized.

     The Company  applies  Statement of Position (SOP) 97-2,  "Software  Revenue
Recognition," as amended, which requires, among other things, net revenue earned
on software  arrangements  involving  multiple  elements to be allocated to each
element based on the relative  fair values of the elements when vendor  specific
objective evidence of the fair value of undelivered elements exists.

     Research and  Development -- Costs incurred in research and development are
charged to operations as incurred.

     Foreign  Currency  -- The  functional  currency  of the  Company's  foreign
subsidiary is the U.S. dollar.  Transaction and  remeasurement  gains and losses
were not significant for any of the periods presented.

     Net Loss per Share -- Basic earnings per share (EPS) excludes  dilution and
is computed by dividing net income (loss) attributable to common stockholders by
the  weighted  average  number  of  common  shares  outstanding  for the  period
excluding the weighted average common shares subject to repurchase.  Diluted EPS
reflects  the  potential  dilution  that  could  occur  if  securities  or other
contracts to issue common stock  (convertible  preferred  stock and common stock
options using the treasury stock method) were exercised or converted into common
stock.  Potential  common shares in the diluted EPS  computation are excluded in
net loss periods as their effect would be antidilutive.

     Comprehensive  Loss  --  In  accordance  with  SFAS  No.  130,   "Reporting
Comprehensive  Income," the Company reports by major  components and as a single
total, the change in its net assets during the period from nonowner sources in a
consolidated  statement of  comprehensive  loss which has been included with the
consolidated statements of stockholders' equity. Accumulated other comprehensive
income at  December  31,  2000 is  comprised  entirely  of  unrealized  gains on
available-for-sale securities, net of tax.

     New  Accounting   Standard--  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," is effective for all fiscal years beginning
after June 15,  2000.  SFAS No.  133,  as amended,  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts, and for hedging activities.  Under SFAS
No. 133, certain contracts that were not formerly considered derivatives may now
meet the  definition  of a  derivative.  The  Company  will  adopt  SFAS No. 133
effective January 1, 2001.  Management has concluded its analysis of the effects
of adopting SFAS No. 133 and the adoption will not have a significant  impact on
the financial position, results of operations, or cash flows of the Company.

     In  December  1999,  the  Securities  and  Exchange  (SEC)  released  Staff
Accounting   Bulletin   (SAB)  No.  101,   "Revenue   Recognition  in  Financial
Statements."  This bulletin  summarized  certain  interpretations  and practices
followed  by the  Division  of  Corporation  Finance and the Office of the Chief
Accountant  of the  SEC in  administering  the  disclosure  requirements  of the
Federal securities laws in applying accounting  principles generally accepted in
the United States of America to revenue recognition in financial statements. The
adoption  of SAB No.  101 in  2000  had no  impact  on the  Company's  financial
position, results of operations or cash flows.


2. Short-term Investments

The Company  did not hold  short-term  investments  at December  31,  1999.  The
following table presents the amortized cost and fair value of available-for-sale
securities at December 31, 2000 (in thousands):

                             Amortized         Unrealized
                                Cost         Holding Gains        Fair Value
                            ------------- ---------------------  -------------

Corporate debt obligations... $34,781          $    74             $34,855
U.S. Government obligations..   1,898                6               1,904
                              -------          -------             -------
Short-term investments .....  $36,679          $    80             $36,759
                              =======          =======             =======

     Available-for-sale  debt securities are classified as current assets as all
maturities are within one year.

  3.  INVENTORIES

         Inventories consist of the following (in thousands):

                                    December 31,
                                    ------------
                                   1999     2000
                                   ----     ----

Raw materials and subassemblies   $   48   $1,034
Finished goods ................       48      939
                                  ------   ------
Inventories ...................   $   96   $1,973
                                  ======   ======


  4.  PROPERTY AND EQUIPMENT

         Property and equipment consists of the following (in thousands):



<PAGE>


                                                December 31,
                                                ------------
                                              1999       2000
                                              ----       ----

Computer equipment and software .........   $   915    $ 1,754
Machinery and equipment .................     1,227      2,762
Furniture and fixtures ..................       180        890
Leasehold improvements ..................       115        626
                                            -------    -------
                                              2,437      6,032
Accumulated depreciation and amortization    (1,081)    (1,936)
                                            -------    -------
Property and equipment, net .............   $ 1,356    $ 4,096
                                            =======    =======

  5.  LONG-TERM DEBT

     Long-term  debt  at  December  31,  1999  consists  of  the  following  (in
thousands):


Capital expenditure term loan due June 2001.....  $     401
1998 capital expenditure facility...............        653
                                                  ---------
Total debt......................................      1,054
Current portion of long-term debt...............       (520)
                                                  ---------
Long-term debt..................................  $     534
                                                  =========

     Outstanding  borrowings  under debt  obligations  at December 31, 1999 were
utilized  to  finance  purchases  of  capital  equipment  and were paid in their
entirety  in 2000.  The company did not have debt  obligations  at December  31,
2000.

  6.  COMMITMENTS AND CONTINGENCIES

     The Company  leases  office  space under  various  noncancelable  operating
leases that expire  through 2007. The Company has an option to renew the primary
facility  lease for an  additional  five years at the then current  market rent.
Future obligations under the Company's leases are as follows (in thousands):

         Year Ending December 31:
                2001............................     $     821
                2002............................           850
                2003............................           880
                2004............................           911
                2005............................           943
                Thereafter......................         1,556
                                                     ---------
                Lease commitments...............     $   5,961
                                                     =========

     Rent expense  incurred under the operating  leases for 1998,  1999 and 2000
was $298,000, $302,000 and $703,000, respectively.

     The Company records rent expense under noncancelable operating leases using
a straight-line  method after consideration of increases in rental payments over
the lease term,  and records the  difference  between  actual  payments and rent
expense as deferred rent in the accompanying consolidated balance sheets.

     The high  technology and  telecommunications  industry in which the Company
operates is  characterized by frequent claims and related  litigation  regarding
patent and other intellectual property rights. The Company is not a party to any
such litigation; however any such litigation in the future could have a material
adverse  effect on the Company's  consolidated  financial  position,  results of
operations and cash flows.


  7.  STOCKHOLDERS' EQUITY

Public Offering

     In August  2000,  the  Company  completed  its initial  public  offering of
3,450,000  shares of common  stock at $12.00  per  share,  for net  proceeds  of
$36,433,000.

     Convertible Preferred Stock

     In 1998,  the  Company  issued  3,000,000  shares of  Series C  convertible
preferred  stock at $4.00 per share resulting in net proceeds of $11,345,000 and
775,604  shares  of  Series D  convertible  preferred  stock at $6.00  per share
resulting in net proceeds of $4,632,000.  The Company issued an additional 4,167
shares of Series D convertible preferred stock at $6.00 per share, for which the
proceeds were not payable until 1999, and accordingly, the Company established a
$25,000 subscription receivable at December 31, 1998.

     In 1999,  the  Company  issued  an  additional  10,746  shares  of Series D
convertible preferred stock at $6.00 per share resulting in proceeds of $65,000.

     In 2000,  the  Company  issued  3,404,140  shares of  Series E  convertible
preferred stock at $7.00 per share resulting in net proceeds of $23,821,000.

     Upon  completion  of the initial  public  offering,  7,500,000  convertible
preferred shares of Series A, 3,000,000  convertible  preferred shares of Series
B,  3,000,000  convertible  preferred  shares of Series C,  790,517  convertible
preferred  shares  of Series D and  3,404,140  convertible  preferred  shares of
Series E were  converted into common stock on a one-to-one  basis,  resulting in
the  issuance  of  17,694,657  shares  of common  stock to the then  convertible
preferred stockholders.

     Common Stock

     Common stock issued  under  certain  stock  purchase  agreements  and stock
option plan  exercises is subject to  repurchase  by the Company.  The number of
shares  subject to  repurchase  is generally  reduced  over a four-year  vesting
period.  At December  31, 1999 and 2000,  2,320,548  and  1,859,680  shares were
subject to repurchase, respectively.

     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):

                                                     Years Ended December 31,
                                                -------------------------------
                                                  1998       1999      2000
                                                  ----       ----      ----

Weighted average common shares
     outstanding ............................     6,417      7,728     18,927
Weighted average common shares outstanding
    subject to repurchase ...................    (3,379)    (2,559)    (2,460)
                                                 ------     ------     ------
Shares used in computation, basic and diluted     3,038      5,169     16,467
                                                  =====      =====     ======

     During all periods presented,  the Company had securities outstanding which
could  potentially  dilute  basic EPS in the  future,  but were  excluded in the
computation  of diluted EPS in such  periods,  as their  effect  would have been
antidilutive  due to the net loss  reported in such  periods.  Such  outstanding
securities consist of the following at: December 31, 1998,  14,279,771 shares of
convertible  preferred  stock,  2,724,157  shares of  common  stock  subject  to
repurchase and options to purchase  5,191,511  shares of common stock;  December
31, 1999, 14,290,517 shares of convertible preferred stock,  2,320,548 shares of
common stock subject to repurchase and options to purchase  7,540,482  shares of
common  stock;  December 31, 2000,  1,859,680  shares of common stock subject to
repurchase and options to purchase 10,692,788 shares of common stock.

Stock Plans

     Under the Company's stock plans adopted in 1996 and 1998, the Company could
grant options to purchase or directly  issue up to  18,816,800  shares of common
stock to employees,  directors and  consultants at prices not less than the fair
market value at the date of grant for incentive  stock options and not less than
85% of fair market value at the date of grant for  nonstatutory  stock  options.
These  options  generally  expire  ten  years  from the  date of  grant  and are
immediately  exercisable.  The Company has a right to repurchase  (at the option
exercise price) common stock issued under option  exercises for unvested shares.
The right of repurchase generally expires 25% after the first 12 months from the
date of grant and then ratably over a 36-month period.

     In July 2000, the Company  adopted the 2000 Stock  Incentive Plan. The 2000
Stock  Incentive Plan serves as the successor  equity  incentive  program to the
Company's  1996 Stock  Option/Stock  Issuance Plan and the 1998 Stock  Incentive
Plan,  as  amended  (the  Predecessor  Plans).  Options  outstanding  under  the
Predecessor Plans on July 11, 2000 (9,071,061 shares) were incorporated into the
2000 Stock Incentive Plan. Such incorporated  options continue to be governed by
their  existing  terms.  Under the 2000 Stock  Incentive  Plan,  the  Company is
authorized  to provide  awards in the form of  restricted  shares,  stock units,
options or stock  appreciation  rights. The number of shares reserved under this
plan was 6,000,000  shares which can be increased up to an additional  4,000,000
for repurchases of unvested  common shares issued under the  Predecessor  Plans.
The share reserve is automatically increased on January 1 of each calendar year,
beginning in 2001,  by an amount equal to the lesser of: (i)  2,500,000  shares;
(ii) 4% of the outstanding shares of stock of the Company on such date; or (iii)
a lesser amount determined by the Company's Board of Directors.

         Under the 2000 Stock  Incentive  Plan, the Company may grant options to
purchase or directly  issue common stock to  employees,  outside  directors  and
consultants  at prices not less than the fair market  value at the date of grant
for incentive stock options and not less than par value at the date of grant for
nonstatutory  stock options.  These options  generally expire ten years from the
date of grant and are generally immediately exercisable. The Company has a right
to repurchase  (at the option  exercise  price) common stock issued under option
exercises for unvested  shares.  The right of repurchase  generally  expires 25%
after  the  first 12  months  from the date of  grant  and then  ratably  over a
36-month  period.  Settlement and vesting terms for awards of restricted  stock,
stock   appreciation   rights,  and  stock  units  are  governed  by  individual
agreements.  There were no awards of restricted stock, stock appreciation rights
or stock units in 2000.




<PAGE>


Stock option activity under the stock plans is summarized as follows:
<TABLE>

<CAPTION>

                                                                                          OUTSTANDING OPTIONS
                                                                                   ----------------------------------

                                                                                                          WEIGHTED
                                                                      SHARES                               AVERAGE
                                                                    AVAILABLE           NUMBER            EXERCISE
                                                                    FOR GRANT         OF SHARES             PRICE
                                                                  ---------------    -------------     ----------------

<S>                                                               <C>                <C>                   <C>
Balances at January 1, 1998 (1,584 shares vested at a weighted
   average exercise price of $0.13 per hare) .................     2,098,400          2,101,400            $  0.19
Reserved .....................................................     3,000,000                 --                 --
Granted (weighted average fair value of $0.17 per share) .....    (3,989,579)         3,989,579               0.41
Canceled .....................................................       291,000           (291,000)              0.33
Repurchased ..................................................       100,000                 --                 --
Exercised ....................................................          --             (608,468)              0.31
                                                                  ----------          ---------

Balances at December 31, 1998 (666,807 shares vested at a
   weighted average exercise price of $0.19 per share)........     1,499,821          5,191,511               0.34
Reserved .....................................................     3,000,000                 --                 --
Granted (weighted average fair value of $3.58 per share) .....    (4,411,500)         4,411,500               0.88
Canceled .....................................................       454,032           (454,032)              0.42
Repurchased ..................................................        71,625                 --                 --
Exercised ....................................................            --         (1,608,497)              0.38
                                                                  ----------         ----------

Balances at December 31, 1999 (1,163,408 shares vested at a
   weighted average exercise price of $0.33 per share) .......       613,978          7,540,482               0.64
Reserved .....................................................    10,700,000                 --                 --
Granted (weighted average fair value of $6.53 per share) .....    (7,555,391)         7,555,391               3.47
Canceled .....................................................     1,321,112         (1,321,112)              1.58
Repurchased ..................................................       361,699                 --                 --
Exercised ....................................................            --         (3,081,973)              1.16
                                                                  ----------         ----------
Balances at December 31, 2000 ................................     5,441,398         10,692,788            $  2.37
                                                                  ----------         ----------


</TABLE>

<TABLE>

<CAPTION>

Additional  information regarding options outstanding at December 31, 2000 is as
follows:

                                          OPTIONS OUTSTANDING                                VESTED OPTIONS
                          -----------------------------------------------------     ---------------------------------


                                         WEIGHTED
                                         AVERAGE           WEIGHTED                                         WEIGHTED
                                        REMAINING          AVERAGE                                          AVERAGE
    RANGE OF                NUMBER     CONTRACTUAL         EXERCISE                     NUMBER              EXERCISE
 EXERCISE PRICES         OUTSTANDING   LIFE (YEARS)         PRICE                       VESTED                PRICE
 --------------          -----------   -----------         -------                      ------              -------
<S>                       <C>             <C>              <C>                       <C>                    <C>
$0.13 - $0.25               766,692         6.9             $ 0.22                      409,513               $0.21
$0.40 - $1.00             5,598,596         8.5               0.86                    1,021,449                0.70
$2.00 - $5.00             1,937,250         9.3               2.89                       22,500                3.11
$5.63 - $6.50             2,356,250         9.7               6.02                        9,937                6.42
$16.50                       34,000         9.7              16.50                            -                   -
                          ---------                                                   ---------

$0.13 - $16.50           10,692,788         8.8             $ 2.37                    1,463,399               $0.64
                         ==========                                                   =========

</TABLE>

<PAGE>


Employee Stock Purchase Plan

     In July 2000,  the Company  adopted the 2000 Employee  Stock  Purchase Plan
(the  ESPP).  Under the ESPP,  eligible  employees  are  allowed to have  salary
withholdings  of up to 10% of their  base  compensation  to  purchase  shares of
common  stock at a price  equal to 85% of the lower of the  market  value of the
stock at the beginning or end of defined purchase periods.  The initial purchase
period  commenced upon the initial public offering of the Company's common stock
in August 2000 and ends on January 31, 2001.  Offering  periods,  other than the
initial offering period, commence on February 1 and August 1 of each year.

     One million shares of common stock are reserved for issuance under the Plan
and will be increased on the first day of each fiscal year,  commencing 2001, by
the lesser of: (a) 80,000  shares;  (b) 1% of the Company's  outstanding  common
stock on the day of the increase; or (c) a lesser number of shares determined by
the  Company's  Board of  Directors.  At  December  31, 2000  $520,427  had been
contributed by employees that will be used to purchase shares in 2001.


Deferred Stock Compensation

     As discussed in Note 1, the Company accounts for its stock-based  awards to
employees  using the  intrinsic  value  method in  accordance  with APB No.  25.
Accordingly,  the  Company  records  deferred  stock  compensation  equal to the
difference between the grant price and deemed fair value of the Company's common
stock  on the  date  of  grant.  Such  deferred  stock  compensation  aggregated
$394,000,  $15,114,000 and $36,397,000 in 1998, 1999 and 2000, respectively, and
is being amortized to expense over the vesting period of the options,  generally
four years, using a multiple option award valuation  approach,  which results in
accelerated  amortization  of  the  expense.   Amortization  of  deferred  stock
compensation  was $154,000,  $4,616,000 and $23,534,000 in 1998,  1999, and 2000
respectively.


     During 1998, the Company issued  nonstatutory  options to nonemployees  for
the purchase of 104,958  shares of common stock at a weighted  average  exercise
price of $0.40 per share.  The fair value of such awards was not significant and
such shares were fully vested as of December 31, 1999.

     In 1999, the Company issued 800,000 shares of common stock to a director at
$0.60 per share  resulting in proceeds of  $480,000.  The Company has a right of
repurchase on such shares at the original  issuance  price upon  termination  of
employment.  The right of  repurchase  expires  over  four  years  with  certain
predefined  events  triggering   accelerated   vesting.   The  Company  recorded
$2,664,000 of deferred stock  compensation  equal to the difference  between the
purchase  price and deemed fair value of the Company's  common stock on the date
of issuance.  Such deferred stock  compensation is amortized to expense over the
vesting period using a multiple award option valuation approach.

     During  1999  and  2000,  the  Company  issued   nonstatutory   options  to
nonemployees  for the  purchase of 23,000 and 115,141  shares of common stock at
weighted  average  exercise  prices of $0.84 and $3.39 per share,  respectively.
Such  options  were issued for services  provided by the  nonemployees  and were
immediately  vested and  exercisable.  Accordingly,  the  Company  recorded  the
$99,000 and $635,000 fair values of such awards (using the Black-Scholes  option
pricing model), respectively,  as stock-based compensation which was expensed on
the date of grant.

Additional Stock Plan Information

     Since the  Company  continues  to  account  for its  stock-based  awards to
employees  using the intrinsic  value method in accordance with APB No. 25, SFAS
No. 123 requires the  disclosure  of pro forma net income (loss) and EPS had the
Company  adopted the fair value  method.  Under SFAS No. 123,  the fair value of
stock-based awards is calculated through the use of option pricing models,  even
though such models were developed to estimate the fair value of freely tradable,
fully transferable  options without vesting  restrictions,  which  significantly
differ from the Company's stock option awards.  The Company's  calculations were
made using the  Black-Scholes  option  pricing model which  requires  subjective
assumptions,  including  expected  time  to  exercise  and  future  stock  price
volatility,  which greatly affects the calculated values. The following weighted
average  assumptions  were used to calculate  the fair value of employee  awards
under the Company's  options plans:  expected life, 3.4 years in 1998, 3.1 years
in 1999 and 3.2 years in 2000;  volatility,  0% in 1998 and 1999 and a  weighted
average of 29% in 2000; risk free interest rate, 6% in 1998 and 1999 and 6.4% in
2000; and no dividends during the expected term. The Company's  calculations are
based on a multiple  option award  valuation and  amortization  approach,  which
results in accelerated  amortization of the expense.  Forfeitures are recognized
as they  occur.  If the  computed  fair values of the  employee  awards had been
amortized to expense over the vesting  period of the awards,  the  Company's pro
forma net loss would have been $8,083,000  ($2.66 per share,  basic and diluted)
in 1998,  $17,365,000  ($3.36 per share,  basic and diluted) in 1999 and $44,224
($2.69 per share, basic and diluted) in 2000.


   8.     INCOME TAXES

     The  Company  recorded  no income tax  benefit or  provision  in any of the
periods  presented.  The difference between the recorded amount is reconciled to
the federal statutory rate as follows (in thousands):

                                          1998        1999         2000
                                       ---------   --------    ---------

Federal statutory tax benefit at 35%   $ (2,797)   $ (5,977)   $(15,166)
State tax benefit ..................       (459)       (981)     (2,490)
Research & development credits .....       (249)       (391)       (774)
Nondeductible stock compensation....         63       1,921       9,848
Change in valuation allowance.......      3,267       5,124       8,973
Other ..............................        175         304        (391)
                                       --------    --------    --------
Income taxes .......................   $    --     $     --    $     --
                                       ========    ========    ========


     The components of net deferred tax assets are as follows (in thousands):

                                                        December 31,
                                                   ---------------------
                                                      1999     2000
                                                      ----     ----

Deferred tax assets:
   Accruals and reserves not currently deductible   $   403   $ 1,145
   Net operating loss carryforwards .............     9,103    15,671
   Tax credit carryforwards .....................     1,138     2,233
   Other ........................................        75       643
                                                    -------   -------
                                                     10,719    19,692
Valuation allowance .............................   (10,719)  (19,692)
                                                    -------   -------

Net deferred tax assets .........................   $    --   $    --
                                                    =======   =======

     The  net  $8,973,000  increase  in the  valuation  allowance  in  2000  was
primarily  the  result  of  increased  net  operating   losses  and  tax  credit
carryforwards  generated  during  the year  which the  Company  provided  a full
valuation  against  based  on the  Company's  evaluation  of the  likelihood  of
realization of future tax benefits resulting from deferred tax assets.

     As  of  December  31,  2000,  the  Company  had  $32,000  of  deferred  tax
liabilities  resulting from unrealized gains on  available-for-sale  investments
which were  included in other  current  liabilities.  There were no deferred tax
liabilities at December 31, 1999.

     As of December 31, 2000,  the Company had  available for  carryforward  net
operating  losses for federal and state income tax purposes of  $40,811,000  and
$26,518,000,  respectively.  Net  operating  losses of $734,000  for federal and
state tax purposes  attributable to the tax benefit  relating to the exercise of
nonqualified  stock options and  disqualifying  dispositions  of incentive stock
options are excluded from the components of deferred income tax assets.  The tax
benefit  associated  with  this  net  operating  loss  will  be  recorded  as an
adjustment to stockholders'  equity when the Company  generates  taxable income.
Federal net operating loss carryforwards  will expire, if not utilized,  in 2011
through  2020.  State net  operating  loss  carryforwards  will  expire,  if not
utilized, in 2003 through 2005.

     As of  December  31,  2000,  the  Company had  available  for  carryforward
research  and  experimentation  tax credits  for  federal  and state  income tax
purposes  of  $1,118,000  and  $905,000,  respectively.   Federal  research  and
experimentation  tax  credit  carryforwards  expire in 2011  through  2020.  The
Company also had $210,000 in California manufacturers investment credits.

     Current federal and California tax laws include substantial restrictions on
the  utilization  of net  operating  losses  and tax  credits in the event of an
"ownership  change" of a  corporation.  Accordingly,  the  Company's  ability to
utilize  net  operating  loss and tax credit  carryforwards  may be limited as a
result  of  such  ownership  change.  Such  a  limitation  could  result  in the
expiration of carryforwards before they are utilized.

  9.     CUSTOMER CONCENTRATIONS

     The following  table  summarizes  net revenue and accounts  receivable  for
customers which accounted for 10% or more of accounts receivable or net revenue:

                          Accounts Receivable              Net Revenue
                          ------------------      ----------------------------
                              December 31,           Years Ended December 31,
                          ------------------      ----------------------------

       CUSTOMER             1999      2000         1998     1999       2000
       --------             ----      ----         ----     ----       ----
A  ................          -          -           57%       -         -
B  ................         43%        16%          17%      46%       31%
C  ................         33%        19%           -        -         -
D  ................         12%         -            -        -         -
E  ................          -          -            -        -        16%
F  ................          -         46%           -        -        13%


  10.    EMPLOYEE BENEFIT PLAN

     During 1998, the Company sponsored a simple individual  retirement  account
plan (SEP IRA) and made discretionary contributions of $39,000. The SEP IRA plan
was replaced, effective January 1, 1999, with a 401(k) tax deferred savings plan
to provide for retirement of employees meeting certain eligibility requirements.
Employee  contributions are limited to 20% of their annual compensation  subject
to IRS annual limitations.  The Company may make contributions at the discretion
of the Board of Directors. There were no discretionary employer contributions to
the 401(k) plan in 1999 or 2000.

  11.    SEGMENT INFORMATION

     As defined by the requirements of SFAS No. 131, "Disclosures About Segments
of  an  Enterprise  and  Related  Information,"  the  Company  operates  in  one
reportable segment: the design, development,  marketing and sale of multiservice
broadband  access   telecommunications   equipment.   International  sales  were
insignificant for all periods presented.  The Company's chief operating decision
maker is its chief executive officer.

12.      SELECTED CONSOLIDATED QUARTERLY FINANCIAL RESULTS (Unaudited)

     The following  tables set forth  selected  unaudited  quarterly  results of
operations for the years ended December 31, 1999 and 2000 (in thousands,  except
per share amounts):

<TABLE>

<CAPTION>

                                                                        Quarter Ended
                                    -------------------------------------------------------------------------------------
                                    Mar. 31,   June 30,   Sept. 30,  Dec. 31,   Mar. 31,   June 30,   Sept. 30,  Dec. 31,
                                      1999       1999       1999       1999       2000       2000       2000       2000
                                    -------    -------     -------   -------    -------    -------    --------   --------
<S>                                 <C>        <C>         <C>       <C>        <C>        <C>        <C>        <C>
Net revenue ......................  $ 2,903    $ 2,771     $ 2,992   $ 4,034    $ 5,187    $ 6,869    $ 9,174    $ 10,848

Gross profit (excluding
   stock-based compensation)......    1,417      1,479         815     1,276      1,948      2,649      3,723       4,518

Loss from operations .............   (2,057)    (2,895)     (5,095)   (7,252)    (7,931)   (11,923)   (12,927)    (12,283)
Net loss .........................   (1,966)    (2,818)     (5,045)   (7,247)    (7,805)   (11,653)   (12,442)    (11,432)
     Net loss per share, basic and
         diluted .................  $ (0.46)   $ (0.59)    $ (0.91)  $ (1.18)   $ (1.12)   $ (1.50)   $ (0.60)   $  (0.37)
     Shares used in computation,
         basic and diluted........    4,270      4,768       5,520     6,118      6,958      7,794     20,571      30,545

</TABLE>

  13.     SUBSEQUENT EVENT

     On February 27, 2001, we acquired  Woodwind  Communications  Systems,  Inc.
("Woodwind"),  a provider of voice-over-broadband network edge access solutions.
The aggregate acquisition price consisted of approximately 4.1 million shares of
VINA common stock,  $7.5 million in cash and the  assumption of all  outstanding
Woodwind options to purchase  approximately  1.4 million shares of common stock.
The transaction will be accounted for as a purchase.



Item 9. Changes In and  Disagreements  With  Accountants  on Accounting and
        Financial Disclosure

         Not applicable.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

     The information  required by this item (with respect to  identification  of
directors  and  with  respect  to  delinquent  filers  pursuant  to Item  405 of
Regulation  S-K) is  incorporated  by reference from the  information  under the
caption  "Election  of  Directors"  and  "Section  16(a)  Beneficial   Ownership
Reporting Compliance," respectively,  contained in the Company's Proxy Statement
to be filed with the Securities and Exchange  Commission in connection  with the
solicitation of proxies for the Company's 2001 Annual Meeting of Stockholders to
be held on May 22, 2001 (the "Proxy Statement"). For information with respect to
the executive  officers of the Company,  see "Executive  Officers" at the end of
Part I of this report.

Item 11.  Executive Compensation

     The information required by this item is incorporated by reference from the
information  under the  captions  "Election  of  Directors  --  Compensation  of
Directors," and "Executive  Compensation"  contained in the Company's Definitive
Proxy Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The information required by this item is incorporated by reference from the
information under the captions "Security  Ownership of Certain Beneficial Owners
and Management" contained in the Company's Proxy Statement.

Item 13.  Certain Relationships and Related Transactions

     The information required by this item is incorporated by reference from the
information contained under the caption "Certain Transactions"  contained in the
Company's Proxy Statement

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)      Documents filed as part of this report:

         (1)      Consolidated Financial Statements

     Reference is made to the Index to Consolidated Financial Statements of VINA
Technologies, Inc., under Item 8 of Part II hereof.

         (2)      Consolidated Financial Statement Schedule

     The following consolidated financial statement schedule is filed as part of
this  registration  statement  and  should  be  read  in  conjunction  with  the
consolidated financial statements.

                                                                     Page
                                                                     ----
        Schedule II - Valuation & Qualifying Accounts                 67

     Schedules other than those referred to above have been omitted because they
are not  applicable  or not  required  or because  the  information  is included
elsewhere in the consolidated financial statements or the notes thereto.

         (3)      Exhibits

         See Item 14(c) below. Each management  contract or compensatory plan or
arrangement required to be filed has been identified.

(b)      Reports on Form 8-K.

     The Company  filed no reports on Form 8-K during the fiscal  quarter  ended
December 31, 2000.



<PAGE>

<TABLE>

<CAPTION>


<S>                                                     <C>
Exhibit
Number                                                  Description of Document
------                                                  -----------------------
2.1      Agreement  and Plan of Merger,  dated as of October 30, 2000,  by and among the Registrant, WCS
         Acquisition  Subsidiary,  Inc. and Woodwind Communications Systems, Inc. (incorporated by
         reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q filed with the Securities
         and Exchange Commission on March 5, 2001 (File No. 000-31903)).
3(i)     Amended and Restated Certificate of Incorporation of Registrant (incorporated by reference to
         Exhibit 3(i).2 to the Company's Registration Statement on Form S-1 (File No. 333-36398)).
3(ii)    Bylaws of the Registrant, as amended (incorporated by reference to Exhibit 3(ii).2 to the
         Company's Registration Statement on Form S-1 (File No. 333-36398)).
4.1      Form of Common Stock Certificate (incorporated by reference to the exhibit of the same number to
         the Company's Registration Statement on Form S-1 (File No. 333-36398)).
4.2      Fourth Amended and Restated Investors' Rights Agreement dated as of January 31, 2000 (incorporated
         by reference to the exhibit of the same number to the Company's Registration Statement on Form S-1
         (File No. 333-36398)).
10.1*    1996 Stock Plan and form of agreements thereunder (incorporated by reference to the exhibit of the
         same number to the Company's Registration Statement on Form S-1 (File No. 333-36398)).
10.1.2*  Amended and Restated 1998 Stock Plan and form of agreements thereunder (incorporated by reference
         to the exhibit of the same number to the Company's Registration Statement on Form S-1 (File No.
         333-36398)).
10.1.3*  2000 Employee Stock Purchase Plan (incorporated by reference to the exhibit of the same number to
         the Company's Registration Statement on Form S-1 (File No. 333-36398)).
10.1.4*  2000 Stock Incentive Plan (incorporated by reference to the exhibit of the same number to the
         Company's Registration Statement on Form S-1 (File No. 333-36398)).
10.1.5*  Agreement under the 2000 Stock Incentive Plan (incorporated by reference to the exhibit of the
         same number to the Company's Registration Statement on Form S-1 (File No. 333-36398)).
10.2+    General Agreement for the Procurement of Products and Service and the Licensing of Software dated
         April 28, 1999 between the Registrant and Lucent Technologies, Inc.(incorporated by reference to
         the exhibit of the same number to the Company's Registration Statement on Form S-1 (File No.
         333-36398)).
10.4     Standard NNN Lease dated March 24, 1997 between the Registrant and Limar Realty Corp.
10.5*    Indemnification Agreement between the Registrant and its officers and directors (incorporated by
         reference to the exhibit of the same number to the Company's Registration Statement on Form S-1
         (File No. 333-36398)).
23.1     Independent Auditors' Consent and Report on Schedule.
24.1     Power of Attorney (see page 66 of this Form 10-K).

--------------------------------------------------------------------------------
</TABLE>


     + Confidential  treatment has been granted with respect to certain portions
of these agreements.

     * Indicates management contract or compensatory plan or arrangement.

(c)     Schedules  not listed above have been omitted  because the  information
required to be set forth therein is not  applicable or is shown in the financial
statements or notes thereto.

<PAGE>


     SIGNATURES  Pursuant  to the  requirements  of  Section  13 or 15(d) of the
Securities  Exchange Act of 1934,  the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                     VINA TECHNOLOGIES, INC.
Date:    March 30, 2001
                                           /s/ STEVEN M. BAUMAN
                                     -------------------------------------------
                                               Steven M. Bauman
                                             Chief Executive Officer

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below constitutes and appoints Steven M. Bauman and Stanley E. Kazmierczak,  and
each of them,  his true and  lawful  attorneys-in-fact,  each with full power of
substitution,  for him or her in any and all capacities,  to sign any amendments
to this  report on Form 10-K and to file the same,  with  exhibits  thereto  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,   hereby   ratifying   and   confirming   all  that   each  of  said
attorneys-in-fact  or their substitute or substitutes may do or cause to be done
by virtue hereof.

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

<TABLE>

<CAPTION>


              Name                                             Title                          Date
              ----                                             -----                          ----

<S>                                                <C>                                 <C>
      /s/ STEVEN M. BAUMAN                         President and Chief Executive       March 30, 2001
---------------------------------------------       Officer (Principal Executive
        Steven M. Bauman                               Officer) and Director


   /s/ STANLEY E. KAZMIERCZAK                   (Principal Financial and Accounting    March 30, 2001
                                                             Officer)
---------------------------------------------
     Stanley E. Kazmierczak


      /s/ JEFFREY M. DRAZAN                                  Director                  March 30, 2001
---------------------------------------------
        Jeffrey M. Drazan

       /s/ JOHN F. MALONE                                    Director                  March 30, 2001
---------------------------------------------
         John F. Malone

      /s/ FRANK J. MARSHALL                                  Director                  March 30, 2001
---------------------------------------------
        Frank J. Marshall

      /s/ PHILIP J. QUIGLEY                                  Director                  March 30, 2001
---------------------------------------------
        Philip J. Quigley

       /s/ JOSHUA W. SOSKE                                   Director                  March 30, 2001
---------------------------------------------
         Joshua W. Soske

       /s/ W. MICHAEL WEST                                   Director                  March 30, 2001
---------------------------------------------
         W. Michael West
</TABLE>


<PAGE>




                             VINA TECHNOLOGIES, INC.

                                   Schedule II
                        Valuation and Qualifying Accounts

<TABLE>

<CAPTION>
                                                                                           Deduction
                                                   Balance at         Charged to           Write-off          Balance at
                                                   Beginning           Cost and                of               End of
                                                   of Period           Expenses             Accounts            Period
                                                   ---------          ----------           ----------         -----------
Allowance for doubtful accounts and sales returns:
Year ended:
<S>                                                   <C>                <C>                   <C>                <C>
   December 31, 2000...........................        $221               $114                  $17                $318
   December 31, 1999...........................         109                131                   19                 221
   December 31, 1998...........................           -                109                    -                 109
Inventory reserves:
   December 31, 2000...........................         $90                $31                  $11                $110
   December 31, 1999...........................           -                 90                    -                  90
   December 31, 1998...........................           -                  -                    -                   -
Accrued warranty:
   December 31, 2000...........................        $449               $393                 $156                $686
   December 31, 1999...........................         152                410                  113                 449
   December 31, 1998...........................          18                185                   51                 152

</TABLE>