<Page>

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

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

                                    FORM 10-Q


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

                  For the quarterly period ended July 31, 2001

(  )     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: 000-26952




                             ENTRADA NETWORKS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                     <C>
                 Delaware                                   33-0676350
      (State or other jurisdiction of                   (I.R.S. Employer
      incorporation or organization)                    Identification No.)

10070 Mesa Rim Road, San Diego, California                    92121
  (Address of principal executive office)                   (Zip Code)
</TABLE>
                                 (858) 623-3265
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___

(Indicate the number of shares of each of the registrant's classes of common
stock, as of the latest practicable date.)

<TABLE>
<CAPTION>
                  Title                         Date                 Outstanding
                  -----                         ----                 -----------
<S>                                        <C>                        <C>
Common Stock, $.001 Par Value             August 30, 2001             10,992,634
</TABLE>




<PAGE>




                             Entrada Networks, Inc.

                           Consolidated Balance Sheets
                      (in thousands, except per share data)



<TABLE>
<CAPTION>
                                                                             July 31,      January 31,
                                                                               2001            2001
                                                                            ----------     -----------
                                                                           (unaudited)
<S>                                                                          <C>             <C>
ASSETS
Current assets:
      Cash                                                                   $ 1,522        $  9,953
      Restricted cash                                                            300             300
      Accounts receivable, net of allowance for doubtful
           accounts of $396 and $400, respectively                             1,440           4,373
      Inventories, net of reserves of $2,755 and $3,340, respectively          3,794           4,636
      Prepaid expenses and other current assets                                  362             298
                                                                             -------        --------
           Total current assets                                                7,418          19,560
Property and equipment, net                                                    2,284           2,452
                                                                             -------        --------
           Total assets                                                      $ 9,702        $ 22,012
                                                                             =======        ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
      Short-term debt                                                        $ 1,700        $  3,568
      Current maturities of long-term debt                                       189             394
      Accounts payable                                                           917           1,725
      Net liabilities of discontinued operations                               1,299           3,892
      Other current and accrued liabilities                                    1,621           2,166
                                                                             -------        --------
           Total current liabilities                                           5,726          11,745
Long-term debt and capital lease obligations                                      37             131
                                                                             -------        --------
           Total liabilities                                                   5,763          11,876

Stockholders' equity
      Common stock, $0.001 par value; 50,000 shares authorized,
           10,993 and 4,244 shares issued and outstanding
           at July 31, 2001 and January 31, 2001                                  11              11
      Additional paid-in capital                                              51,765          51,722
      Accumulated deficit                                                    (47,837)        (41,597)
                                                                             -------        --------
           Total stockholders' equity                                          3,939          10,136
                                                                             -------        --------

           Total liabilities and stockholders' equity                        $ 9,702        $ 22,012
                                                                             =======        ========
</TABLE>

          See accompanying notes to consolidated financial statements.



                                       2




<PAGE>



                             Entrada Networks, Inc.

                      Consolidated Statements of Operations
                (unaudited, in thousands, except per share data)


<TABLE>
<CAPTION>
                                                              Three months ended              Six months ended
                                                                    July 31,                       July 31,
                                                           ------------------------     --------------------------
                                                               2001         2000             2001          2000
                                                           ----------   -----------     ------------  ------------
<S>                                                          <C>           <C>              <C>           <C>
Net sales                                                    $ 2,164       $ 6,041          $ 3,485       $ 9,751

Cost of sales                                                  1,568         3,696            2,822         9,093
                                                             -------       -------          -------       -------
         Gross profit                                            596         2,345              663           658

Operating expenses:
     Selling and marketing                                     1,157         1,318            2,348         2,352
     Engineering, research and development                     2,017         1,108            4,355         2,758
     General and administrative                                  822           541            1,701         1,052
     Other                                                       292             -              559         2,088
                                                             -------       -------          -------       -------
         Total operating expenses                              4,288         2,967            8,963         8,250

Income (loss) from operations                                 (3,692)         (622)          (8,300)       (7,592)

Interest expense, net                                            (42)         (129)            (114)         (225)
                                                             -------       -------          -------       -------
         Income (loss) from continuing operations
         before income taxes                                  (3,734)         (751)          (8,414)       (7,817)

Provision for income taxes                                         -             -                -             -
                                                             -------       -------          -------       -------

         Net income (loss) from continuing operations         (3,734)         (751)          (8,414)       (7,817)

Net income from discontinued operations                          909             -            2,174             -
Loss on disposal of discontinued operations                        -             -                -             -
                                                             -------       -------          -------       -------
Net income (loss)                                            $(2,825)      $  (751)         $(6,240)      $(7,817)
                                                             =======       =======          =======       =======

Net income (loss) per common share:

     Income (loss) from continuing operations:
         Basic                                               $ (0.34)      $ (0.18)         $ (0.77)      $ (1.84)
                                                             =======       =======          =======       =======
         Diluted                                             $ (0.34)      $ (0.18)         $ (0.77)      $ (1.84)
                                                             =======       =======          =======       =======

     Net income from discontinued operations:
         Basic                                               $  0.08       $     -          $  0.20       $     -
                                                             =======       =======          =======       =======
         Diluted                                             $  0.08       $     -          $  0.20       $     -
                                                             =======       =======          =======       =======

     Net income (loss):
         Basic                                               $ (0.26)      $ (0.18)         $ (0.57)      $ (1.84)
                                                             =======       =======          =======       =======
         Diluted                                             $ (0.26)      $ (0.18)         $ (0.57)      $ (1.84)
                                                             =======       =======          =======       =======

     Weighted average shares outstanding:
         Basic                                                10,993         4,244           10,993         4,244
                                                             =======       =======          =======       =======
         Diluted                                              10,993         4,244           10,993         4,244
                                                             =======       =======          =======       =======
</TABLE>



          See accompanying notes to consolidated financial statements.





                                       3




<PAGE>



                             Entrada Networks, Inc.

                      Consolidated Statements of Cash Flows
                            (unaudited, in thousands)


<TABLE>
<CAPTION>
                                                                                              Six months ended
                                                                                                   July 31,
                                                                                          ---------------------------
                                                                                               2001          2000
                                                                                          -------------  ------------
<S>                                                                                         <C>           <C>
Cash flows from operating activities:
     Net loss from continuing operations                                                    $ (8,414)     $ (7,817)

     Adjustments to reconcile net loss from continuing operations to net cash
     used in operating activities:
        Intangible asset valuation allowance                                                       -             -
        Depreciation and amortization                                                            579         1,316
        Accounts receivable and inventory reserves                                                45         4,318
        Changes in assets and liabilities:
           Accounts receivable                                                                 2,887        (1,203)
           Due from affiliates                                                                     -           596
           Inventories                                                                           843          (790)
           Other current assets                                                                  (65)          335
           Accounts payable                                                                     (808)       (1,946)
           Accrued expenses                                                                     (545)          (96)
           Other current liabilities                                                               -             -
                                                                                             --------      --------
               Net cash used in continuing operating activities                               (5,478)       (5,287)
               Net cash used in discontinued operations                                         (418)            -
                                                                                             --------      --------
               Net cash provided by (used in) operating activities                            (5,896)       (5,287)

Cash flows from investing activities:
     Purchase of property and equipment                                                         (411)         (184)
                                                                                             --------      --------
               Net cash used in investing activities                                            (411)         (184)

Cash flows from financing activities:
     Bank overdraft                                                                                -             -
     Proceeds from issuance of short-term debt, net of repayments                             (1,868)        1,099
     Repayment of capital lease obligations                                                     (299)          (51)
     Advances from former parent company, net of repayments                                        -         4,317
     Warrants issued in conjunction with credit facility                                          43             -
                                                                                            --------      --------
               Net cash provided by (used in) financing activities                            (2,124)        5,365
                                                                                            --------      --------

Net increase in cash and cash equivalents                                                     (8,431)         (106)

Cash and cash equivalents at beginning of year                                                 9,953           112
                                                                                            --------      --------

Cash and cash equivalents at end of period                                                  $  1,522      $      6
                                                                                            ========      ========
</TABLE>

             See accompanying notes to consolidated financial statements.



                                       4







<Page>

ENTRADA NETWORKS, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except per share amounts)
-----------------------------------------------------------------------------

We design, manufacture and market products that provide access to and enhance
the performance of data and telecommunication networks, and are currently
developing storage area networks ("SANs") transport technology which will enable
inter-networking of isolated islands of SANs over wide area networks, metro area
networks and local area networks via internet protocol and light. Our products
are deployed by telecommunications network operators, application service
providers, internet service providers, and the operators of corporate local area
and wide area networks for the purpose of providing access transport within
their networks. Our corporate headquarters and engineering facilities are
located in San Diego, California. We perform assembly, system integration,
quality control, final testing and configuration at our facility in Annapolis
Junction, Maryland. In addition, we have various sales offices located in the
United States. We pursue a strategy of outsourcing some of our products and
components to third party contract manufacturers to enable us to react quickly
to market demand and avoid significant capital investment required to establish
and maintain full manufacturing facilities. Operations of our frame relay
segment based in Irvine, California, are being discontinued. We market and sell
our products and services directly to end users as well as through a broad array
of channels including system integrators, worldwide distributors, value added
resellers, original equipment manufacturers ("OEMs"), telecommunication service
providers and governmental agencies.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

         Entrada Networks, Inc., the "Company," "We," "Our" or "Us," has
prepared, without audit, the accompanying financial data as of July 31, 2001,
and for the three and six months ended July 31, 2001 and 2000 in accordance with
generally accepted accounting principles for interim financial information and
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. The
January 31, 2001 balance sheet was derived from audited financial statements,
but does not include all disclosures required by generally accepted accounting
principles. However, we believe that the disclosures are adequate to make the
information presented not misleading. These consolidated financial statements
should be read in conjunction with the financial statements and the notes
thereto included in our Annual Report on Form 10-K filed on May 4, 2001.

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates that affect
the reported amounts of assets, liabilities, revenues and expenses, the
disclosure of contingent assets and liabilities and the loss on disposal of
discontinued operations. Actual results could differ from these estimates. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows as of July 31, 2001 and for the three and six months
ended July 31, 2001, have been made. The results of operations for the three and
six months ended July 31, 2001 are not necessarily indicative of the operating
results for the full year.

Discontinued Operations

         The accompanying financial statements reflect the operations and
financial position of the frame relay business segment as a discontinued
business segment for all periods reported in conformity with generally accepted
accounting principles.

Recent Accounting Pronouncements

         In June 2001, the Financial Accounting Standards Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Company recognize acquired




                                       5




<PAGE>


ENTRADA NETWORKS, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except per share amounts)
--------------------------------------------------------------------------------

intangible assets apart from goodwill if the acquired intangible assets meet
certain criteria. SFAS 141 applies to all business combinations initiated after
July 1, 2001 and for purchase business combinations completed on or after July
1, 2001. It also requires, upon adoption of SFAS 142, that the Company
reclassify the carrying amounts of intangible assets and goodwill based on the
criteria in SFAS 141. The Company does not believe the adoption of SFAS 141 will
have a material effect, if any, on our financial position of results of
operations.

         SFAS 142 requires, among other things, that companies no longer
amortize goodwill, but instead test goodwill for impairment at least annually.
In addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within the
first interim quarter after adoption of SFAS 142. The Company does not believe
the adoption of SFAS 142 will have a material effect, if any, on our financial
position of results of operations.

         Statement of Financial Accounting Standards ("SFAS") No. 133 as amended
by SFAS 137 and 138, "Accounting for Derivative Instruments and Hedging
Activities," is effective for financial statements with fiscal quarters of all
fiscal years beginning after June 15, 2000. The Accounting Standards Executive
Committee issued Statement of Position ("SOP") 98-1, "Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use," and SOP 98-5,
"Reporting on the Costs of Start-up Activities," effective in the current or
future periods. The adoption or future adoption of these standards has had or
will have no material effects on our financial position or results of
operations.

         The Financial Accounting Standards Board issued Interpretation ("FIN")
No. 44, "Accounting for Certain Transactions involving Stock Compensation," an
Interpretation of APB Opinion No. 25. FIN 44 clarifies the application of
Opinion No. 25 for (a) the definition of an employee for purposes of applying
Opinion No. 25, (b) the criteria for determining whether a plan qualifies as a
non-compensatory plan, (c) the accounting consequences of various modifications
to the terms of a previously fixed stock option award, and (d) the accounting
for an exchange of stock compensation awards in a business combination. FIN 44
is effective July 2, 2000, but certain conclusions cover specific events that
occur after either December 15, 1998, or January 12, 2000. The adoption of this
standard had no material effect, if any, on our financial position or results of
operations.

         In December, 1999 the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition ("SAB 101"), which broadly
addresses how companies report revenues in their financial statements. Staff
Accounting Bulletin No. 101B delayed the date of required adoption to October 1,
2000. Management believes that adoption of this policy had no material effect on
our financial position or results of operations.



                                       6




<PAGE>


ENTRADA NETWORKS, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except per share amounts)
--------------------------------------------------------------------------------

BALANCE SHEET DETAIL

         Inventories at July 31, 2001 and January 31, 2001 consist of:

<TABLE>
<CAPTION>
                                                            July 31, 2001       January 31, 2001
                                                            -------------       ----------------
<S>                                                             <C>                   <C>
                  Raw material                                  $ 4,248               $ 5,659
                  Work in process                                 1,096                   672
                  Finished goods                                  1,205                 1,645
                                                                -------               -------
                                                                  6,549                 7,976
                  Less: Valuation reserve                        (2,755)               (3,340)
                                                                -------               -------
                                                                $ 3,794               $ 4,636
                                                                =======               =======
</TABLE>


STOCKHOLDERS' EQUITY

         We are authorized to issue the following shares of stock:
             50,000,000 shares of Common Stock ($0.001 par value)
             2,000,000 shares of Preferred Stock ($0.001 par value)

         None of our preferred stock was outstanding during the six months ended
July 31, 2001. All shares of our preferred stock, Series A, were automatically
converted into 700,000 shares of our common stock in connection with our merger
on August 31, 2000.


EARNINGS PER SHARE CALCULATION

         The following data show the amounts used in computing basic earnings
per share for the three and six month periods ended July 31, 2001 and 2000.

<TABLE>
<CAPTION>
                                                 Three Months Ended July 31,        Six Months Ended July 31,
                                                    2001             2000             2001             2000
                                                  --------         -------          --------         -------
<S>                                               <C>            <C>               <C>               <C>
       Net income (loss) available to common
         stockholders used in basic EPS           $  (2,825)     $   (751)         $   (6,240)     $  (7,817)
                                                  ==========     =========         ===========     =========

       Average number of common shares
           used in basic EPS                      10,992,634     4,244,155         10,992,634      4,244,155
                                                  ==========     =========         ==========      =========
</TABLE>

         We incurred a net loss from continuing operations for the three and six
month periods ended July 31, 2001 and 2000. Accordingly, the effect of dilutive
securities including vested and non-vested stock options to acquire common stock
are not included in the calculation of EPS because their effect would be
antidilutive. The following data shows the effect on income and the weighted
average number of shares of dilutive potential common stock.




                                       7




<PAGE>

ENTRADA NETWORKS, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except per share amounts)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                 Three Months Ended July 31,        Six Months Ended July 31,
                                                  2001               2000             2001             2000
                                                --------           -------          --------         -------
<S>                                              <C>              <C>               <C>             <C>
       Net loss available to common
         stockholders used in basic EPS          $ (2,825)        $  (751)          $ (6,240)       $(7,817)
                                                 =========        =======           ========        =======

       Average number of common shares
         used in basic EPS                      10,992,634      4,244,155         10,992,634      4,244,155
       Effect of dilutive securities:
         Stock benefit plans                         1,121              -             25,529              -
                                                ----------      ---------        -----------      ---------
       Average number of common shares
         and dilutive potential common
         stock used in diluted EPS              10,993,755      4,244,155         11,018,163      4,244,155
                                                ==========      =========         ==========      =========
</TABLE>


         The shares issuable upon exercise of options represent the quarterly
average of the shares issuable at exercise net of the shares assumed to have
been purchased, at the average market price for the period, with the assumed
exercise proceeds. Accordingly, options with exercise prices in excess of the
average market price for the period are excluded because their effect would be
antidilutive. There were no options to purchase common shares or convertible
preferred stock outstanding during the six months ended July 31, 2000. Options
to purchase common shares that were outstanding but were not included in the
computation of diluted earnings per shares because their exercise price was
greater than the average market price of the common shares for the period each
option was outstanding were 3,702,547 and 3,308,374 for the three and six months
ended July 31, 2001, respectively.

COMMITMENTS

         On February 20, 2001, our credit arrangement with Coast Business Credit
was fully replaced with a credit facility with Silicon Valley Bank. The Silicon
Valley Bank credit facility has a maximum limit of $5.0 million, subject to a
limitation equal to 75% of our eligible receivables plus the lesser of $1.0
million or 40% of the liquidation value of our eligible inventory. Borrowings
under the credit line bear interest at the bank's prime rate plus 1.75%. In
connection with the line of credit, we issued Silicon Valley Bank five-year
warrants to purchase 75,757 shares of our common stock at $3.30 per share. We
have accrued $43 of deferred interest in connection with these warrants. The
deferred interest is being amortized as interest expense over the twelve month
term of the credit arrangement. The credit arrangement is subject to covenants
regarding our tangible net worth, and is collateralized by accounts receivable,
inventory and equipment.


CONCENTRATION OF CREDIT RISK

         Financial instruments that potentially subject us to concentration of
credit risk consist primarily of temporary cash investments and trade
receivables. As regards the former, we place our temporary cash investments with
high credit financial institutions. At times such amounts may exceed F.D.I.C.
limits. One of our short-term investment accounts at a single institution
accounted for approximately 3% of current assets at July 31, 2001.

         Although we are directly affected by the economic well being of
significant customers listed in the following tables, management does not
believe that significant credit risk exists at July 31, 2001. We perform ongoing
evaluations of our customers and require letters of credit or other collateral
arrangements as appropriate.


                                       8



<PAGE>

ENTRADA NETWORKS, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except per share amounts)
--------------------------------------------------------------------------------

         Three customers each account for 67.7%, 23.6%, and 10.1% of net
receivables at July 31, 2001, which is within terms. At January 31, 2001, three
customers each accounted for 37.0%, 12.6%, and 12.1% of net receivables.

         Customers accounting for more than 10% of net sales during the quarters
ended July 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                        July 31, 2001         July 31, 2000
                                                        -------------         -------------
<S>                                                         <C>                    <C>
                             Customer W                     49.7%                  50.0%
                             Customer X                     13.3                    -
                             Customer Y                     11.7
                             Customer Z                      -                     13.3
</TABLE>


SEGMENT INFORMATION

         We operate one business segment for the design and manufacture of
computer networking products. The operations of the business segment formerly
known as Sync Research, Inc., are being discontinued and the segment's results
of operations are shown as "Loss from discontinued operations" in the
accompanying Consolidated Statements of Operations. Export sales are not a
material component of total sales.

GOING CONCERN

         The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern that contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The carrying amounts of assets and liabilities presented in the
financial statements do not purport to represent realizable or settlement
values. However, the Company has determined that its available cash resources
will be insufficient to meet its anticipated working capital requirements for
the next twelve months. These factors, along with the fact that the Company has
suffered recurring operating losses, raise doubt about the Company's ability to
continue as a going concern.

         The Company is continuing its efforts to secure working capital for
operations. However, there can be no assurance that the Company will be able to
secure additional capital, or that if such capital is available, whether the
terms or conditions would be acceptable to the Company. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty



                                       9






<PAGE>



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

Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the consolidated unaudited
financial statements and related notes thereto. The results of operations in the
consolidated unaudited financial statements reflect the operating results of
Entrada Networks for all periods presented. The periods presented include the
operating results of the former Sync Research, Inc., beginning on September 1,
2000, as discontinued operations. Further reference should be made to our Form
10-K, filed May 4, 2001, containing our audited financial statements for the
years ended January 31, 2000 and 2001.

Results of Operations/Comparison of the Three Months Ended July 31, 2001 and
2000

Net sales. Net sales were $2.2 million for the three months ended July 31, 2001,
compared with $6.0 million for the three months ended July 31, 2000. The
decrease in net sales in the three months ended July 31, 2001 resulted primarily
from decreased sales to OEMs of fast Ethernet local area networking LAN adapter
products due to the general economic slowdown being experienced by our major OEM
customers.

Gross profit. Cost of sales consists principally of the cost of components and
subcontract assembly from outside manufacturers, in addition to in-house system
integration, quality control, final testing and configuration. Gross profit
decreased to $0.6 million for the quarter ended July 31, 2001, compared with
$2.3 million for the comparable quarter last year. Our gross margin declined to
27.5% for the three months ended July 31, 2001, from 38.8% for the three months
ended July 31, 2000. The decline in gross margins resulted primarily from the
reduced revenues for the second quarter fiscal 2002.

Selling and marketing. Selling and marketing expenses consist primarily of
employee compensation and related costs, commissions to sales representatives,
tradeshow expenses, facilities costs, and travel expenses. Selling and marketing
expenses decreased to $1.2 million, or 53.5% of net sales for the quarter ended
July 31, 2001, from $1.3 million and 21.8% of net sales for the quarter ended
July 31, 2000. The decrease in selling and marketing costs reflects the expense
reduction measures undertaken in the six months ended July 31, 2001.

Engineering, research and development. Engineering, research and development
expenses consist primarily of compensation related costs for engineering
personnel, facilities costs, and materials used in the design, development and
support of our technologies. Engineering, research and development expenses were
$2.0 million, or 93.2% of net sales, for the quarter ended July 31, 2001,
compared with $1.1 million, or 18.3% of net sales, for the quarter ended July
31, 2000. The increase in research and development expenses was primarily due to
increased new product development costs.

General and administrative. General and administrative expenses consist
primarily of employee compensation and related costs, legal and accounting fees
and public company costs. General and administrative expenses increased to $0.8
million, or 38.0% of net sales, for the quarter ended July 31, 2001 from $0.5
million, or 9.0% of net sales, for the quarter ended July 31, 2000. As a result
of the merger and establishment of the Company as a publicly traded entity
headquartered in San Diego, the Company has added a layer of senior management
and will incur additional costs associated with operating as a public company,
including the costs of proxies, mailing, annual reports and stockholders'
meetings. These costs are incremental to the Company's general and
administrative costs and will continue indefinitely.

Other operating expenses. Other operating expenses for the three months ended
July 31, 2001, were $0.3 million, consisting of severance costs associated with
a reduction in staff associated primarily with our legacy products.

Income taxes. There was no provision for income taxes for the three-month
periods ended July 31, 2001 and 2000. We have carry forwards of domestic federal
net operating losses, which may be available, in part, to reduce future taxable
income in the United States. However, the Internal Revenue Code limits the
application of net operating loss carry forwards in the event of ownership
changes of greater than 50%. We have had a change of ownership that will limit
the amount of any net operating loss carry forward we may use in a particular
year. In addition, we provided a valuation allowance in full for our deferred
tax assets as it is our opinion that it is more likely than not that some
portion or all of the assets will not be realized.

Discontinued operations. Net income from discontinued operations was $0.9
million for the second quarter ended July 31, 2001. Net sales from discontinued
operations were $1.9 million for the second quarter ended July 31, 2001.


                                       10




<PAGE>



This represents the operating results of the former Sync Research, Inc. frame
relay business based in Irvine, California. On September 29, 2000, after
completion of the merger on August 31, 2000, the Company entered into a plan to
discontinue the operations of the frame relay business segment.

Results of Operations/Comparison of the Six Months Ended July 31, 2001 and 2000

Net sales. Net sales were $3.5 million for the six months ended July 31, 2001,
compared with $9.8 million for the six months ended July 31, 2000. The decrease
in net sales in the six months ended July 31, 2001 resulted primarily from
decreased sales to OEMs of fast Ethernet local area networking LAN adapter
products due to the general economic slowdown being experienced by our major OEM
customers.

Gross profit. Cost of sales consists principally of the cost of components and
subcontract assembly from outside manufacturers, in addition to in-house system
integration, quality control, final testing and configuration. Gross profit was
$0.7 million for each of the six month periods ended July 31, 2001 and 2000. Our
gross margin was 19.0% for the six months ended July 31, 2001, compared with
6.7% for the six months ended July 31, 2000. The lower gross margin for the six
months ended July 31, 2000 was primarily due to a $2.7 million inventory
valuation adjustment. Our gross margin, excluding the valuation adjustment,
declined to 19.0% for the six months ended July 31, 2001, from 34.3% for the six
months ended July 31, 2000. The decline in gross margins resulted primarily from
the reduced revenues for the first six months of fiscal 2002.

Selling and marketing. Selling and marketing expenses consist primarily of
employee compensation and related costs, commissions to sales representatives,
tradeshow expenses, advertising, facilities costs, and travel expenses. Selling
and marketing expenses decreased to $2.3 million, or 67.4% of net sales for the
six months ended July 31, 2001, from $2.4 million and 24.1% of net sales for the
six months ended July 31, 2000. The decrease in selling and marketing costs
reflects the expense reduction measures undertaken in the six months ended July
31, 2001, partially offset by increases in marketing costs.

Engineering, research and development. Engineering, research and development
expenses consist primarily of compensation related costs for engineering
personnel, facilities costs, and materials used in the design, development and
support of our technologies. Engineering, research and development expenses were
$4.4 million, or 125.0% of net sales, for the six months ended July 31, 2001,
compared with $2.8 million, or 28.3% of net sales, for the six months ended July
31, 2000. The increase in research and development expenses was primarily due to
increased new product development costs.

General and administrative. General and administrative expenses consist
primarily of employee compensation and related costs, legal and accounting fees
and public company costs. General and administrative expenses increased to $1.7
million, or 48.8% of net sales, for the six months ended July 31, 2001 from $1.1
million, or 10.8% of net sales, for the six months ended July 31, 2000. As a
result of the merger and establishment of the Company as a publicly traded
entity headquartered in San Diego, the Company has added a layer of senior
management and will incur additional costs associated with operating as a public
company, including the costs of proxies, mailing, annual reports and
stockholders' meetings. These costs are incremental to the Company's general and
administrative costs and will continue indefinitely.

Other operating expenses. Other operating expenses for the six months ended July
31, 2001, were $0.6 million, consisting of severance costs associated with a
reduction in staff associated primarily with our legacy products. Other
operating expenses for the six months ended July 31, 2000, were $2.1 million,
consisting primarily of a $1.4 million valuation reserve recorded against
distributor receivables and $0.5 million of costs associated with the closure of
our Massachusetts facility.

Income taxes. There was no provision for income taxes for the six-month periods
ended July 31, 2001 and 2000. We have carry forwards of domestic federal net
operating losses, which may be available, in part, to reduce future taxable
income in the United States. However, the Internal Revenue Code limits the
application of net operating loss carry forwards in the event of ownership
changes of greater than 50%. We have had a change of ownership that will limit
the amount of any net operating loss carry forward we may use in a particular
year. In addition, we provided a valuation allowance in full for our deferred
tax assets as it is our opinion that it is more likely than not that some
portion or all of the assets will not be realized.


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Discontinued operations. Net income from discontinued operations was $2.2
million for the six months ended July 31, 2001. Net sales from discontinued
operations were $3.3 million for the six months ended July 31, 2001. This
represents the operating results of the former Sync Research, Inc. frame relay
business based in Irvine, California. On September 29, 2000, after completion of
the merger on August 31, 2000, the Company entered into a plan to discontinue
the operations of the frame relay business segment.


Liquidity and Capital Resources

The amounts included in our statement of cash flows for the first six months of
fiscal 2002 are not comparable to our first six months of fiscal 2001 amounts
due to the inclusion of the former Sync Research, Inc., for first six months
fiscal 2002. Readers should refer to Sync's quarterly report on Form 10-Q for
information concerning Sync.

We financed our operations before the merger through a combination of debt and
non-interest bearing advances from our former parent. At July 31, 2001, our
working capital was $1.7 million and cash and cash equivalents were $1.8
million, including $0.3 million of restricted cash.

Cash flow used in operations was $5.9 million during the six months ended July
31, 2001 compared with $5.3 million for the six months ended July 31, 2000. The
increase in cash flows used in operations reflects a substantial increase in our
net loss from operations after adjustment for non-cash expenses including
depreciation, amortization, reserves and valuation allowances, in addition to
$0.4 million of cash used in discontinued operations. During the six months
ended July 31, 2001, operating cash flow reflected decreases in net accounts
receivable and net inventories, partially offset by decreases in accounts
payable and accrued expenses and increases in other current assets. During the
same six months last year, our cash flow used in operations reflected increases
in accounts receivable and inventory along with a decrease in accounts payable.

Our investing activities consist primarily of purchases of property, plant and
equipment. We purchased $0.4 million and $0.2 million in equipment during the
six months ended July 31, 2001 and 2000, respectively.

Our financing activities during the six months ended July 31, 2001 used cash
flows of $2.1 million, primarily in connection with a $1.9 million decrease in
short-term debt. During the six months ended July 31, 2000, financing activities
provided cash flows of $5.4 million, which included $4.3 million of non-interest
bearing advances from our former parent, net of repayments.

We have a line of credit totaling $5.0 million. Outstanding borrowings against
this line of credit were $1.7 million at July 31, 2001. Our credit line is
collateralized by accounts receivable, inventory and equipment.

We anticipate that our available cash resources will be insufficient to meet our
presently anticipated working capital requirements to continue the development
of the SAN product line for the next 12 months. The Company is currently
pursuing possible strategic alternatives including external equity financing
arrangements that, if successful, would enable the continuation of the
development of SAN products. Nonetheless, our future capital requirements may
vary materially from those now planned, including the need for additional
working capital to accommodate planned growth, hiring and infrastructure needs.
There can be no assurances that our working capital requirements will not exceed
our ability to generate sufficient cash internally to support our requirements
and that external financing will be available or that, if available, such
financing can be obtained on terms favorable to us and our shareholders.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

We periodically need additional financing for our large operating losses and
capital expenditures associated with establishing and expanding our operations.
The interest rate that we will be able to obtain on debt financing will depend
on market conditions at that time, and may differ from the rates we have secured
on our current debt. Additionally, the interest rates charged by our present
lenders adjust on the basis of the lenders' prime rate.

We believe that the relatively moderate rate of inflation in the United States
over the past few years has not had a significant impact on our sales or
operating results or on the prices of raw materials. There can be no assurance,
however, that inflation will not have a material adverse effect on our operating
results in the future.


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All of our sales and expenses are currently denominated in U.S. dollars and to
date our business has not been affected by currency fluctuations. In the future,
however, we could conduct business in several different countries and thus
fluctuations in currency exchange rates could cause our products to become
relatively more expensive in particular countries, leading to a reduction in
sales in that country. In addition, inflation in such countries could increase
our expenses. In the future, we may engage in foreign currency denominated sales
or pay material amounts of expenses in foreign currencies and, in such event,
may experience gains and losses due to currency fluctuations. Our operating
results could be adversely affected by such fluctuations.

We do not hold or issue derivative, derivative commodity instruments or other
financial instruments for trading purposes. Investments held for other than
trading purposes do not impose a material market risk.


Part II. Other Information

Item 5. Other Information

Nasdaq Listing Qualifications

We have been informed by The Nasdaq National Market that we are not in
compliance with Marketplace Rule 4450(a)(5) because our common stock failed to
maintain a minimum bid price of $1.00 over 30 consecutive trading days. We have
been granted until October 22, 2001 to regain compliance with the Rule.
Compliance will be determined by the Nasdaq Staff, but generally requires that
the bid price of our common stock be at least $1.00 for a minimum of 10
consecutive trading days. If the Staff determines that we are not in compliance
by October 22, 2001, we have the right to appeal the Staff's decision to a
Nasdaq Listing Qualifications Panel. Failure to regain compliance would result
in the delisting of our securities from the Nasdaq National Market. Delisting of
our securities could have a material adverse effect on the price of our common
stock and upon the ability of our stockholders to buy or sell our common stock.

Certain Cautionary Statements

Certain statements in this Quarterly Report on Form 10-Q, including, but not
limited to, Part I, Item 2 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations," contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, Section
21E of the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995, that are not historical facts but
rather reflect current expectations concerning future results and events. The
words "believes," "expects," "intends," "plans," "anticipates," "likely," "will"
and similar expressions identify such forward-looking statements. These
forward-looking statements are subject to risks, uncertainties and other
factors, some of which are beyond the Company's control that could cause actual
results to differ materially from those forecast or anticipated in such
forward-looking statements. These factors include, but are not limited to, the
technical and commercial success of the Company's current and future products,
the performance and ultimate disposition of our discontinued business segment
based in Irvine, California, the integration of operations as a result of the
merger, reliance on vendors and product lines, competition, performance of new
products, performance of affiliates and their future operating results, the
Company's ability to establish successful strategic alliances, quarterly and
seasonal fluctuations, dependence on senior management and possible volatility
of stock price. These factors are discussed generally in greater detail under
the caption "Risk Factors" in our Annual Report on Form 10-K, filed May 4, 2001.


Item 6. Exhibits and Reports on Form 8-K

          (a)  Exhibits

               None.

          (b)  Reports on Form 8-K

                    On July 16, 2001, the Company filed a report on Form 8-K
                    describing the effect of a general economic slowdown on it
                    financial results and operations, and the cost-cutting
                    measures implemented by the Company in response.


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Signatures


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

                           ENTRADA NETWORKS, INC.


                           By:  /s/ Gilbert G. Goldbeck
                                --------------------------------------
                                Gilbert G. Goldbeck
                                Vice President, Finance and Operations
                                 Chief Financial Officer
                                 Principal Accounting Officer


                                  Date: August 31, 2001


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