15


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

                                    FORM 10-Q


                                   (Mark One)
        [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                                 Exchange Act of 1934
               For the quarterly period ended March 31, 2002.
                                       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 000-30928

                            PATH 1 NETWORK TECHNOLOGIES INC.
                    (Exact name of registrant as specified in its charter)


              DELAWARE                                   13-3989885
       (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)               Identification No.)



                3636 NOBEL DRIVE, SUITE 400, SAN DIEGO, CALIFORNIA 92122
                                 (858) 450-4220
    (Address, including zip code, and telephone number, including area code, of
                             principal executive offices)

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 ___

The number of shares outstanding of the issuer's Common Stock, US$.001 par
value, as of April 30, 2002 was 8,440,275.


<PAGE>


                        PATH 1 NETWORK TECHNOLOGIES INC.
                          Quarterly Report on Form 10-Q
                  For the Quarterly Period Ended March 31, 2002


                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION................................................3
   ITEM 1. FINANCIAL STATEMENTS...............................................3
      CONDENSED CONSOLIDATED BALANCE SHEETS...................................3
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS.........................4
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS.........................5
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS....................6
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
     CONDITION AND RESULTS OF OPERATIONS.....................................12
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
     MARKET RISK ............................................................32
PART II - OTHER INFORMATION..................................................32
   ITEM 1. LEGAL PROCEEDINGS.................................................32
   ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.........................32
   ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................32
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............32
   ITEM 5. OTHER INFORMATION.................................................33
   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................33



<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
                                         PATH 1 NETWORK TECHNOLOGIES INC.
                                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                      (in US$, thousands except share data)
<TABLE>
<S>                                                                                <C>               <C>

                                                                                 March 31,       December 31,
                                                                                   2002              2001
                                                                             -------------------------------------
ASSETS                                                                          (unaudited)
Current assets:
 Cash and cash equivalents                                                    $   448              $  1,181
 Marketable securities, available for sale                                         -                    552
 Accounts receivable                                                               261                  322
 Inventory                                                                         101                   -
 Other current assets                                                               58                  285
                                                                             -------------------------------------
      Total current assets                                                         868                 2,340

Property and equipment, net                                                        464                   482
Acquired technology, net                                                           511                   585
Other assets                                                                         5                    11
                                                                             -------------------------------------
Total assets                                                                   $  1,848              $  3,418
                                                                             =====================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  ccounts payable and accrued liabilities                                        $  339                $  898
 Accrued compensation and benefits                                                  432                   485
 Acquisition payable                                                                686                   686
 Deferred revenue                                                                    75                     -
                                                                             -------------------------------------
      Total current liabilities                                                   1,532                   2,069

Commitments and contingencies

Stockholders' equity:
 Preferred stock, $0.001 par value; no shares issued or outstanding                   -                      -
 Common stock, $0.001 par value; 20,000,000 shares authorized
          8,440,257 and 8,299,126 shares issued and outstanding                       8                      8
          at March 31, 2002 and December 31, 2001 respectively
 Notes receivable from stockholders                                                   -                     (86)
 Additional paid-in capital                                                       27,410                  26,801
 Deferred compensation                                                              (190)                   (276)
 Accumulated other comprehensive loss                                                 -                     (616)
 Accumulated deficit                                                              (26,912)               (24,482)
                                                                              -------------------------------------
      Total stockholders' equity                                                      316                   1,349
                                                                              -------------------------------------
Total liabilities and stockholders' equity                                       $  1,848                $  3,418
                                                                              =====================================

</TABLE>

See accompanying notes to these condensed, consolidated financial statements.


                                      PATH 1 NETWORK TECHNOLOGIES INC.
                              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (in US$, thousands, except per share amounts)
                                                (unaudited)
<TABLE>
<S>                                                                      <C>                   <C>
                                                                             Three Months Ended
                                                                                  March 31,
                                                                         2002                  2001
                                                                 --------------------------------------------
Revenues:                                                           $    154               $      -
                                                                 --------------------------------------------

 Cost of goods sold                                                      123                      -
                                                                 --------------------------------------------
Gross profit                                                              31                      -

Operating expenses:
 Engineering research and development                                    552                      620
 Sales and marketing                                                     193                      106
 General and administrative                                              775                      582
 Stock-based compensation                                                100                    1,313
                                                                 --------------------------------------------
        Total operating expenses                                      (1,620)                  (2,621)

Interest income, net                                                      -                        97
Loss on sale of securities                                              (590)                     (48)
                                                                 --------------------------------------------
Net loss from continuing operations                                   (2,179)                   (2,572)
                                                                 --------------------------------------------
Discontinued operations                                                 (251)                     (983)
                                                                 --------------------------------------------
Net loss                                                             $ (2,430)                 $ (3,555)
                                                                 ============================================
Net loss per common share from continuing operations                 $  (0.26)                 $ (0.31)
                                                                 ============================================
Net loss per common share - basic and diluted                        $  (0.29)                 $ (0.43)
                                                                 ============================================
Weighted average common shares outstanding - basic and diluted          8,406                    8,191
                                                                 ============================================

 (*)  The following table shows how the Company's stock-based compensation would
      be allocated to the respective department expense line items:
         Research and development                                        $ 71                  $ 559
         Sales and marketing                                               23                    212
         General and administrative                                         6                    542
                                                                 --------------------------------------------
                                                                         $ 100                $ 1,313
                                                                 ============================================

</TABLE>


See accompanying notes to these condensed, consolidated financial statements.

                                   PATH 1 NETWORK TECHNOLOGIES INC.
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (in US$, thousands)
                                             (unaudited)

<TABLE>
<S>                                                                     <C>                <C>
                                                                           Three Months Ended
                                                                                March 31
                                                                        2002               2001
                                                                  -------------------------------------
Cash flows from operating activities:
 Net loss from continuing operations                                $  (2,179)        $   (2,572)
 Adjustments to reconcile net loss to net cash
      used in operating activities:
    Depreciation and amortization                                         108               166
    Amortization of deferred compensation                                 100             1,313
    Common stock options issued for services                               -                  7
    Loss on investment                                                    596                48
 Changes in assets and liabilities:
    Accounts receivable                                                    61                -
    Other current assets                                                  126               244
    Other assets                                                           -                 35
    Accounts payable and accrued liabilities                             (14)              (643)
    Accrued compensation and benefits                                    (53)               (47)
    Deferred revenue                                                      75                125
                                                                  -------------------------------------
Cash provided by (used in) operating activities                       (1,180)            (1,324)

Cash flows from investing activities:
  Sale of marketable securities                                           578               1,370
  Purchase of Metar ADC Assets                                             -               (1,000)
  Purchases of property and equipment                                    (90)               (148)
                                                                  -------------------------------------
Cash provided by (used in) investing activities                           488                 222

Cash flows from financing activities:
  Cash from repayment of stockholder notes                                 86                  -
  Issuance of common stock for cash, net                                   50                  5
                                                                  ------------------------------------
Cash provided by financing activities                                     136                  5

Cash flows used in discontinued operations                               (177)             (983)


Increase (decrease) in cash and cash equivalents                         (733)             (2,080)


Cash and cash equivalents, beginning of period                           1,181             7,171
                                                                  -------------------------------------
Cash and cash equivalents, end of period                                $  448           $ 5,091
                                                                  =====================================
Supplemental cash flow disclosures:
  Issuance of common stock for marketable securities                    $   -            $    -
                                                                  =====================================
 Unrealized gain/(loss) in marketable securities                        $  (7)           $  (730)
                                                                  =====================================

</TABLE>


See accompanying notes to these condensed, consolidated financial statements.







<PAGE>


NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis Of Presentation

The accompanying condensed consolidated balance sheet at March 31, 2002, and the
condensed,  consolidated  statements  of  operations  and  cash  flows  for  the
three-month  period ended March 31, 2002,  have been  prepared by Path 1 Network
Technologies  Inc.  (the  "Company")  and have not been  audited.  The condensed
consolidated  balance  sheet  at  December  31,  2001 has  been  audited.  These
quarterly  financial  statements,  in the  opinion of  management,  include  all
adjustments,  consisting only of normal and recurring adjustments,  necessary to
state fairly the financial  information  set forth therein,  in accordance  with
accounting  principles  generally accepted in the United States. These financial
statements should be read in conjunction with the financial statements and notes
thereto for the year ended December 31, 2001 included in the Company's Form 10-K
filed April 15, 2002. The interim financial information contained in this filing
is not  necessarily  indicative  of the  results  to be  expected  for any other
interim period or for the full year ending December 31, 2002.

In the period from January 30, 1998  (inception)  through  March 31,  2002,  the
Company  incurred losses totaling US$26.9  million.  The accompanying  financial
statements have been prepared assuming that the Company will continue as a going
concern.  This basis of  accounting  contemplates  the recovery of the Company's
assets  and  the  satisfaction  of its  liabilities  in  the  normal  course  of
conducting  business.  Management  does not believe that the Company's  existing
capital resources will enable the Company to fund operations for the next twelve
months.  Management's  plans are to reduce  costs in all areas of its  operating
plan until  sufficient  capital is raised to support growth and more substantial
orders  materialize;  however,  even with its cost  reduction  plan, the Company
needs to raise additional  funding to continue as a going concern.  In the event
the  Company  does not receive  additional  funding,  the  Company  plans to: 1)
further  reduce costs and focus on selling  existing  products and services;  2)
sell the Company's assets through a merger or acquisition; or 3) seek protection
under  bankruptcy  status.  Without  additional  financing,  the Company will be
required to further delay,  reduce the scope of, or eliminate one or more of its
research and development  projects and significantly  reduce its expenditures on
product deployment, and may not be able to continue as a going concern.
Reclassifications

Certain reclassifications have been made to prior period financial statements to
conform to current year presentation.

Recently Issued Accounting Standards

In June 2001, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standards (SFAS) No. 141, "Business  Combinations" and
No. 142, "Goodwill and Other Intangible  Assets." Under the new rules,  goodwill
and indefinite lived intangible  assets are no longer amortized but are reviewed
annually for impairment. Separable intangible assets that are not deemed to have
an indefinite  life will continue to be amortized  over their useful lives.  The
amortization  provisions of SFAS No. 142 apply to goodwill and intangible assets
acquired  after June 30,  2001.  As the Company did not have any  goodwill,  the
adoption  of FAS142 did not have a material  impact on the  Company's  financial
statements.

In October  2000,  the FASB  issued SFAS No. 144 (FAS 144),  Accounting  for the
Impairment or Disposal of Long-Lived  Assets. FAS 144 establishes a single model
to  account  for  impairment  of  assets to be held or  disposed,  incorporating
guidelines for accounting and disclosure of discontinued operations.  FAS 144 is
effective for fiscal years beginning after December 15, 2001 and, generally, its
provisions  are  to  be  applied  prospectively.   Management  re-evaluated  its
investment  in acquired  technology  (i.e.  Sistolic) and recorded an impairment
charge during the year ended December 31, 2001 of US$686,000. In April 2002, the
Company sold its Sistolic  business  unit for a loss of  approximately  US$5,000
(see note 8).

Note 2 - Principles Of Consolidation

The  accompanying   condensed  consolidated  financial  statements  include  our
accounts and those of Sistolic,  our wholly  owned  subsidiary.  The Company has
eliminated all significant intercompany accounts and transactions.

Note 3 - Management Estimates And Assumptions

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

Note 4 - Revenue Recognition

Product Revenue

Revenue from product sales is recognized when title and risk of loss transfer to
the  customer,  generally at the time the product is delivered to the  customer.
Revenue is deferred  when customer  acceptance is uncertain or when  undelivered
products or services are essential to the  functionality of delivered  products.
The estimated cost of warranties is accrued at the time revenue is recognized.

Service and License Revenues

Revenue from  support or  maintenance  contracts,  including  extended  warranty
programs, is recognized ratably over the contractual period. Amounts invoiced to
customers in excess of revenue  recognized on support or  maintenance  contracts
are recorded as deferred revenue until the revenue recognition criteria are met.
Revenue  on  engineering  design  contracts,  including  technology  development
agreements, is recognized on a  percentage-of-completion  method, based on costs
incurred  to date  compared  to total  estimated  costs,  subject to  acceptance
criteria.  Billings on  uncompleted  contracts  in excess of incurred  costs and
accrued profits are classified as deferred revenue.  License fees are recognized
when delivery  requirements have been met, collection is probable and no further
obligations  exist.  Royalty  revenue is recorded as earned in  accordance  with
specific  terms of each  license  agreement  when  reasonable  estimates of such
amounts can be made.

Note 5 - Restructuring Charges

During the year ended  December 31,  2001,  the Company  recorded  restructuring
charges  totaling  US$221,000,  primarily  due to severance  costs  related to a
workforce  reduction  and subsidy costs  related to  subletting  certain  excess
office space. The Company  implemented the restructuring plan as a result of the
completion of a certain third party funded development  project and as a prudent
cash flow measure in order to improve its overhead cost structure.

The  workforce  reduction  resulted  in  the  involuntary   termination  of  six
employees,  of which  four  were from the  Company's  engineering  research  and
development staff and two were from the Company's  management and administrative
staff.  The  total  charge   recognized  by  the  Company  for  the  involuntary
termination was approximately  US$93,000, all of which had been paid as of March
31, 2002.

In conjunction with the workforce  reduction,  the Company reduced its operating
overhead by  consolidating  its office space. The Company has sublet most of the
vacated office space on a month-to-month basis at rates lower than its cost. The
Company is doubtful  that it will be able to sublet the space for the  remaining
term of the lease or sublet the remaining  unoccupied space,  accordingly it has
accrued US$128,000 to exit the leases. The total amount accrued and unpaid as of
March 31, 2002 is approximately US$38,000.

Note 6 - Net Income (Loss) Per Share

Basic and diluted net income or (loss) per share has been computed in accordance
with Statement of Financial  Accounting  Standards (SFAS) No. 128, "Earnings Per
Share," using the weighted-average  number of shares of common stock outstanding
during the period including any dilutive common stock equivalents.  A portion of
the common  stock  equivalents  for the three  months  ended March 31, 2002 were
excluded  from the  calculation  of diluted  earnings  per share  because of the
anti-dilutive effect.

Note 7 - Reportable Operating Segments

Path 1 Network Technologies Inc. is a network communications  technology company
enabling  simultaneous  delivery  of  broadcast  quality and  interactive  video
transmissions  and other  real-time  data streams over  Internet  Protocol  (IP)
Ethernet networks. For the purpose of applying Statement of Financial Accounting
Standards  (SFAS)  No.  131  management  determined  that it has  two  operating
segments  based  on the  two  distinct  areas  of  technical  expertise  and the
deployment of the Company's patented core TrueCircuit(R) technology.

The  Video  Systems  business  unit is  engaged  in the  development  of  system
solutions that enable broadcast quality video over IP. Utilizing  TrueCircuit(R)
technology and other developed  network traffic  techniques,  the group has been
able to transport broadcast quality video over an IP network while significantly
reducing  the  amount of  latency  and  jitter  associated  with the high  speed
transmission  of data.  Currently,  the Video  Systems  business unit employs 15
engineers plus support and administrative  personnel and operates primarily from
our San Diego, California USA facility.

The Silicon Systems business unit  ("Sistolic"),  was engaged in the development
and  deployment  of 1 Gigabit  Media Access  Controller  (MAC),  10 Gigabit MAC,
Ethernet switches and related technology.  On April 3, 2002 the Company disposed
of its Sistolic business unit (see note 8). Following is a table that reconciles
the Company's  revenues,  operating  expenses and net identifiable  fixed assets
between the two reportable  segments as of and for the three-months  ended March
31, 2002 and 2001.
<TABLE>
<S>                                                           <C>               <C>               <C>


Revenue, Operating Expenses and Net Loss                                    March 31, 2002
----------------------------------------                                    --------------
                                                                     (in thousands, US dollars)
                                                             Revenue          Expenses          Net loss
Video Solutions                                               $154               845             ($691)
Sistolic                                                        -                251              (251)
Corporate                                                       -              1,488             (1,488)
                                                         ----------------------------------------------------
Net Loss                                                      $154             $2,584           ($2,430)
                                                         =====================================================

Revenue, Operating Expenses and Net Loss                                   March 31, 2001
-----------------------------------------                                  --------------
                                                                    (in thousands, US dollars)
                                                             Revenue          Expenses          Net loss
Video Solutions                                                 -               1,346           (1,346)
Sistolic                                                        -                 983             (983)
Corporate                                                       -               1,226           (1,226)
                                                        ------------------------------------------------------
                                                                -              $3,555           ($3,555)
                                                        ======================================================


Net Identifiable Fixed Assets:                                       March 31,
------------------------------                                       ---------
(in thousands, US dollars)                                    2002              2001
                                                        -------------------------------------
Video Solutions                                               $249              $312
Sistolic                                                       179               174
Corporate                                                      36                47
                                                        -------------------------------------
                                                              $464              $533
                                                        =====================================

</TABLE>


Note 8 - Disposal of Sistolic Business Unit

In March 2002, a large semiconductor company, with whom the Company entered into
a non-exclusive  licensing  agreement and an engineering  services  agreement in
December 2001,  informed the Company that it was terminating  their  agreements.
The Company is in a payment  dispute with this  customer  and is  reviewing  its
alternatives.  As a result of this action, the Company decided to dispose of its
Sistolic  business unit. On April 3, 2002, the Company disposed of the assets of
this  business  unit back to Metar SRL in exchange  for the  elimination  of the
remaining  obligations  by the  Company to Metar SRL,  including  the payable of
US$686,000,  the return of all stock options  granted to Michael  Florea and the
Romanian  employees,  a  confirmation  that  performance  criteria  specified in
Michael Florea's employment  agreement related to a potential US$4 million bonus
with the Company were never met by him and a limited use license to the business
unit's  intellectual  property  in favor of the  Company.  Metar  SLR will  also
receive 35,000 shares of our common stock.  Michael Florea resigned on March 27,
2002,  as an officer of the Company in  anticipation  of this  transaction.  The
results of operations  for the  three-months  ended March 31, 2002 and 2001 have
been included in discontinued operations.

Note 9- Stock Options

The Company  accounts for  stock-based  compensation  arrangements in accordance
with  the  provisions  of  Accounting   Principles  Board  Opinion  ("APB")  25,
Accounting  for Stock Issued to  Employees,  Statement  of Financial  Accounting
Standards  ("SFAS") No. 28, Accounting for Stock  Appreciation  Rights and Other
Variable  Stock  Option  or  Award  Plans,  and  SFAS No.  38,  Determining  the
Measurement  Date for Stock Option,  Purchase,  and Award Plans involving Junior
Stock. The Company also complies with the disclosure provisions of SFAS No. 123,
Accounting for Stock-Based Compensation.

The Company accounts for equity  instruments  issued to non-employees  using the
fair value method in accordance with the provisions of SFAS No. 123 and Emerging
Issues Task Issue No. 96-18,  Accounting for Equity  Instruments that are Issued
to Other than Employees for Acquiring,  or in Conjunction with Selling, Goods or
Services.

Equity   instruments   issued  to  non-employees   that  are  fully  vested  and
non-forfeitable  are measured at fair value at the issuance date and expensed in
the period over which the benefit is expected to be received. Equity instruments
issued to  non-employees  which are either  unvested or  forfeitable,  for which
counter-party  performance  is required for the equity  instrument to be earned,
are measured  initially at the fair value and subsequently  adjusted for changes
in fair  value  until  the  earlier  of: 1) the date at which a  commitment  for
performance by the  counter-party to earn the equity instrument is reached or 2)
the date on which the counter-party's performance is complete.

During the  three-month  periods  ended  March 31,  2002 and 2001,  the  Company
recorded a stock-based  compensation  expense of US$100,000 and US$1.3  million,
respectively,  related to the amortization  options outstanding to employees and
consultants.

Note 10 - Subsequent Event

In April 2002,  the  Company  received  subscriptions  of  approximately  US$1.1
million in a private  placement  of  convertible  notes from  existing  European
shareholders.  As of May  13,  2002,  the  Company  has  received  approximately
US$900,000 of the  subscriptions.  The minimum  amount of private  placement was
US$500,000  and the  maximum  was US$1.5  million.  The notes  carry a 4% annual
coupon,  paid  quarterly in cash or stock,  at the Company's  discretion,  and a
cashless warrant for one share for every share converted. The notes convert at a
stock  price of US$1.20  per share  during the  one-year  conversion  term.  The
Company  has  agreed to set aside 30% of its  revenues,  up to the amount of the
convertible notes outstanding,  in an escrow account until the notes are paid in
full or converted to stock.

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Forward Looking Statements

This document may contain forward-looking statements. These statements relate to
future  events or our  future  financial  performance.  In some  cases,  you can
identify  forward-looking  statements  by  terminology  such as  "may,"  "will,"
"should,"  "expect," "plan,"  "anticipate,"  "believe,"  "estimate,"  "predict,"
"potential"  or  "continue,"  the  negative  of such  terms or other  comparable
terminology. These statements are only predictions. Actual events or results may
differ materially.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes  responsibility for the accuracy and completeness of the forward-looking
statements.  Except to the extent  required by federal law, we disclaim any duty
to update any of the forward-looking statements after the date of this report to
conform such statements to actual results or to changes in our expectations.

You are also urged to carefully review and consider the various disclosures made
by us which attempt to advise interested parties of the factors which affect our
business, including without limitation the disclosures made in this Item 2 or in
the Company's annual report on Form 10-K and other reports and filings made with
the Securities and Exchange Commission.


OVERVIEW

We design and sell  products,  using  proprietary  technology  that  enables the
real-time  transmission  of audio,  video and voice data over a single  Internet
Protocol  (IP)  network  with  end-to-end  high  quality of service  (QoS).  Our
products   make  it  possible  for   packet-switched   IP  networks  to  provide
high-quality,  real-time  transmissions by coordinating the transport of packets
across these networks in a way that eliminates or minimize delays and unreliable
delivery.  We believe our products can make  available the best of both worlds -
the  reliability  and speed of  circuit-switched  networks,  such as traditional
telephone  networks,  along with the data carrying capability and low cost of IP
networks.

At the  core of our  suite  of  products  is our  patented,  patent-pending  and
copyrighted  technology,  including  our  TrueCircuit(R)  technology  which is a
software and  hardware-based  solution for managing  network traffic that is, at
its essence, a method (or algorithm) for the transmission of data on a real-time
basis over IP networks and several trade secrets and intellectual  property in a
variety of areas dealing with the transport and  distribution of data, voice and
video  over  packet-based   networks.  Our  technology  addresses  the  inherent
deficiencies of packet switching as applied to transmission of real-time signals
by superimposing a  circuit-switched  infrastructure  on standard IP networking,
while maintaining full compatibility with existing IP networks.  We believe that
our  technology  combined  with our other  proprietary  know-how,  is capable of
supporting  the  efficient  transmission  of all  communications  over a  single
network,  thus bringing  high-level QoS and real-time audio, video and telephony
capabilities to the Internet and to standard IP networks.

Our customers and prospective  customers include  telecommunications  companies,
cable television operators,  wireless service providers, new competitive service
providers,   broadcasters,   government   agencies,   systems   integrators  and
semi-conductor  companies.  We offer long haul video,  voice and data  products,
video-on-demand  transmission  products,  and design and engineering services to
support these products.

We are  focusing  our  efforts on Internet  Protocol  (IP)-based  offerings  for
broadcasters and the cable industry, Digital Subscriber Line (DSL) offerings for
the  communications  industry and integrated  solutions for systems  integrators
worldwide. Until recently, the resources of our Video Systems business unit were
devoted primarily to research and development.  However, we now have products in
limited  production and deployment.  In the video transport market, for example,
our Path 1 Cx1000 IP Video Gateway,  which is a video gateway device designed to
provide  high quality  video  transmission  capabilities  to  diversified  media
companies, television broadcasters, movie and broadcasting studios, is currently
in  production  and in the  early  stages  of  deployment  by a small  number of
customers.  Our second product in the video transport market,  the Path 1 Cx1400
IP Video  Multiplexer,  which is a  video-on-demand  gateway device  designed to
provide  high  quality  video   transmission   capability  to  cable  television
operators,  is undergoing field  evaluation with BarcoNet,  N.V., a wholly-owned
subsidiary of  Scientific-Atlanta,  Inc.  BarcoNet is marketing a version of the
Cx1400 IP Video Multiplexer in Europe under the name "iMux".


Liquidity And Capital Resources

We anticipate  that our existing  resources will enable us to fund operations at
least  through  the second  quarter of 2002.  In April 2002,  we entered  into a
private  placement  financing  arrangement  of  convertible  notes with several,
existing European shareholders. We have commitments for US$1.1 million and funds
received of  approximately  US$880,000 as of May 13, 2002. We are  continuing to
seek other sources of additional capital to fund operations until we are able to
fund operations through internal cash flow.

In the period from  January 30, 1998  (inception)  through  March 31,  2002,  we
incurred losses totaling US$26.9 million. The accompanying  financial statements
have been prepared assuming that we will continue as a going concern. This basis
of accounting  contemplates  the recovery of our assets and the  satisfaction of
our liabilities in the normal course of conducting  business.  We do not believe
that our existing  capital  resources will enable us to fund  operations for the
next twelve months.  Our plans are to reduce costs in all areas of our operating
plan until  sufficient  capital is raised to support growth and more substantial
orders materialize; however, even with our cost reduction plan, we need to raise
additional  funding  to  continue  as a going  concern.  In the  event we do not
receive  additional  funding,  we plan to: 1) further  reduce costs and focus on
selling existing  products and services;  2) sell the Company's assets through a
merger or acquisition;  or 3) seek protection under bankruptcy  status.  Without
additional financing, we will be required to further delay, reduce the scope of,
or  eliminate  one  or  more  of  its  research  and  development  projects  and
significantly reduce our expenditures on product deployment, and may not be able
to continue as a going concern.

Since our  inception  on January  31,  1998,  we have  financed  our  operations
primarily  through  the  sale of  common  equity  securities  to  investors  and
strategic  partners.  The funds are  currently  invested  in U.S.  Treasury  and
government agency obligations and investment-grade corporate obligations.

At March 31, 2002, we had net working deficit of US$652,000 compared to net
working capital of US$271,000 at December 31, 2001.

Cash, cash equivalents and marketable securities totaled US$448,000 at March 31,
2002 compared to  US$1,181,000 at December 31, 2001. For the next several years,
we expect to incur substantial additional  expenditures associated with research
and  development  in addition to increased  costs  associated  with staffing for
management,  manufacturing,  sales and marketing and  administration  functions.
Additional capital is required to implement our business strategies and fund our
plan for future growth and business development.

Operating activities used US$1.1 million in cash during the three-month period
ended March 31, 2002 and US$1.3 million for the same period in 2001.

Cash provided by investing  activities during the three-month period ended March
31, 2002 was approximately US$488,000 compared to US$222,000 for the three-month
period ended March 31, 2001. Cash provided by investing activities was primarily
the result of the sale of marketable securities. As of March 31, 2002 we have no
marketable securities available for sale.

At March 31,  2002,  we have no material  commitments  other than our  operating
leases. Our future capital requirements will depend upon many factors, including
the timing of research and product  development  efforts,  the  expansion of our
general and  administrative  functions and sales and  marketing  efforts and the
need to finance the manufacturing of commercial products that we may develop and
launch.  We expect to continue  to expend  significant  amounts on research  and
development staffing,  infrastructure and computer equipment to support on-going
research and development activities.

As noted  above,  we will need  additional  financing  in 2002.  We may pursue a
number of alternatives to raise additional funds,  including  borrowings;  lease
arrangements;   collaborative   research  and  development   arrangements   with
technology  companies;  the  licensing of product  rights to third  parties;  or
additional public and private equity financings.  There can be no assurance that
funds from these sources will be available on favorable  terms, if at all. If we
raise additional funds through the issuance of equity securities, the percentage
ownership  of our  stockholders  will be reduced,  stockholders  may  experience
additional   dilution  or  such  equity   securities  may  provide  for  rights,
preferences or privileges senior to those of the holders of our common stock.

Results Of Operations

Three Months Ended March 31, 2002 vs. Three Months Ended March 31, 2001

In the first quarter of 2002, we recognized revenue of US$154,000, compared to
no revenue during the three-month period ended March 31, 2001. The 2002 revenue
is the result of the initial shipments of our commercial products for the video
over IP transport market. We expect these initial recurring revenues to come
from the broadcast transmission infrastructure segment of the video transport
market, where we have established product (e.g., Cx1000 and Cx1400) and
technology capabilities.

We received approximately US$439,000 in purchase orders in the first quarter of
2002, including some third party equipment. We recorded oders for the following
in the quarter:

        Path 1's Cx1000 series IP Video Gateway......................15 units
        Path 1's Cx1400 seriies IP Video Multiplexer.................51 units
        Path 1's El1000 series Stream Conditioning Gateway............5 units
        Total for Q1 2002............................................71 units

In the first quarter of 2002 cost of goods sold increased to US$123,000 from no
cost of goods sold at March 31, 2001. Cost of goods sold consists of raw
material costs, warranty costs and labor associated with building product.

Engineering research and development expenses, excluding the effect of
stock-based compensation, have decreased when compared to the same period in
2001. The decrease of approximately US$68,000 is primarily a result of our focus
on reducing our operating expenditures and outside consultants. Although we
believe, that under our current operating plan and after taking into effect our
September 2001 reduction in force, we possesses the correct complement of
engineering staff and consultants to effectively continue the development and
rollout of our products, we will need to rapidly hire additional staff quickly
if its products achieve a significant level of market acceptance.

General and administrative expenses, excluding the effect of stock-based
compensation, increased from US$582,000 for the first quarter ended March 31,
2001 to US$775,000 for the first quarter ended March 31, 2002. The increase of
approximately US$193,000 is primarily due to legal expenses related to the
various proposed and realized financings.

Stock-based compensation expense is a non-cash expense item that is recognized
as a result of stock options having exercise prices below estimated fair value.
Stock-based compensation expense is calculated as the difference between
exercise price and estimated fair market value on the date of grant. If the
options are subject to variable accounting treatment, additional compensation
expense, positive or negative, is recognized each quarter based on the fair
market value of our common stock in accordance with the provisions of variable
stock option accounting. In October 2001, we offered our holders of Class B
common stock options an opportunity to exchange their options for Class A common
stock options. Since all of the option holders of options on Class B common
stock elected to exchange their options for options on Class A common stock, the
Company ceased recording this compensation expense related to employee options
after a final one-time adjustment in October of 2001. We will continue to record
compensation expense related to the outstanding options to consultants and some
employees for the amount of options that vest in that period. Therefore, in the
quarter ended March 31, 2002 the Company only recognized the expense related to
previously granted stock options held by consultants and a few employees.

Our interest income decreased from US$97,000 for the three-month period ended
March 31, 2001 to nothing for the three-month period ended March 31, 2002,
because we closed our investment account as our cash reserves decreased.

Discontinued Operations

         We decided to dispose of our Silicon Systems business unit ("Sistolic")
after a large semiconductor company, with whom we entered into a non-exclusive
licensing agreement and an engineering services agreement, informed us that they
were terminating their agreements in March 2002. Due to this material and
adverse turn of events, we decided that we could no longer sustain the negative
cash flow from Sistolic. Therefore, on April 3, 2002, we disposed of the assets
of this business unit back to Metar SRL and Michael Florea in exchange for the
elimination of the remaining obligations by us to Metar SRL, including the
payable of US$686,000, the return of all stock options granted to Michael Florea
and the Romanian employees, a confirmation that performance criteria specified
in Michael Florea's employment agreement related to a potential US$4 million
bonus with us were never met by him and a limited use license to the business
unit's intellectual property in favor of us. In addition, the Romanian facility
lease was transferred to Metar SRL and the Romanian employment contracts were
terminated and Metar SRL was permitted to hire any and all Romanian employees.
Metar SLR will also receive 35,000 shares of our common stock. Michael Florea
resigned on March 27, 2002, as an officer of the Company in anticipation of this
transaction. The results of operations for the three-months ended March 31, 2002
and 2001 have been included in discontinued operations.

     Critical Accounting Policies and Estimates

         Management's Discussion and Analysis of Financial Condition and Results
of Operations discusses our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. On an on-going basis, we evaluate our estimates and
judgments, including those related to customer revenues, bad debts, inventories,
intangible assets, income taxes, restructuring costs and contingencies and
litigation. We base our estimates and judgments on our experience and on various
other factors that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.

         We believe the following critical accounting policies, among others,
affect our more significant judgments and estimates used in the preparation of
our consolidated financial statements.

Product Revenue

Revenue from product sales is recognized when title and risk of loss transfer to
the customer, generally at the time the product is delivered to the customer.
Revenue is deferred when customer acceptance is uncertain, when undelivered
products or services are essential to the functionality of delivered products.
The estimated cost of warranties is accrued at the time revenue is recognized.

Service and License Revenues

Revenue from support or maintenance contracts, including extended warranty
programs, is recognized ratably over the contractual period. Amounts invoiced to
customers in excess of revenue recognized on support or maintenance contracts
are recorded as deferred revenue until the revenue recognition criteria are met.
Revenue on engineering design contracts, including technology development
agreements, is recognized on a percentage-of-completion method, based on costs
incurred to date compared to total estimated costs, subject to acceptance
criteria. Billings on uncompleted contracts in excess of incurred costs and
accrued profits are classified as deferred revenue. License fees are recognized
when delivery requirements have been met, collection is probable and no further
obligations exist. Royalty revenue is recorded as earned in accordance with
specific terms of each license agreement when reasonable estimates of such
amounts can be made.

Bad Debt

         As we had limited product shipment in 2001, we did not maintain an
allowance for doubtful accounts for estimated losses resulting from the
inability of our customers to make required payments.

Inventory

         We record inventory, which consists primarily of raw materials used in
the production of our video gateways and related products, at the lower of cost
or market. Cost is determined principally on the average cost method. Provisions
for potentially obsolete or slow-moving inventory are made based on our analysis
of inventory levels and future sales forecasts.

Acquired Technology Impairment

         In assessing the recoverability of our intangibles, we must make
assumptions regarding estimated future cash flows and other factors to determine
the fair value of the respective assets. If these estimates or their related
assumptions change in the future, we may be required to record impairment
charges for these assets not previously recorded.

Warranty Estimates

         We provide for warranty provisions at the time the revenue is
recognized based on the estimated cost to repair the product. Provisions for
warranty are included in cost of sales.


<PAGE>



Risk Factors That May Affect Future Results

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND THE OTHER
INFORMATION INCLUDED HEREIN AS WELL AS THE INFORMATION INCLUDED IN OUR FORM 10-K
FILED ON APRIL 15, 2002 AND OTHER REPORTS AND FILINGS MADE WITH THE SECURITIES
AND EXCHANGE COMMISSION. OUR BUSINESS AND RESULTS OF OPERATIONS COULD BE
SERIOUSLY HARMED BY ANY OF THE FOLLOWING RISKS. THE TRADING PRICE OF OUR COMMON
STOCK COULD DECLINE DUE TO ANY OF THESE RISKS AND STOCKHOLDERS MAY LOSE PART OR
ALL OF THEIR INVESTMENT.

The risks ands uncertainties described below are not the only ones we face.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also impair our operations. Our business and
results of operations could be seriously harmed by the occurrence of any of the
following risk factors. The trading price of our common stock could decline due
to occurrence of any of these risks, and you may lose part or all of your
investment.

        We are dependent upon additional funding to meet current commitments,
continue development of our business and limit uncertainty as to our ability to
continue as a going concern; the prospect of obtaining such funding is
uncertain.

         We need additional funding to meet current commitments and continue
development of our business. At this writing, we are in an immediate cash
crisis. Although we have commitments for US$1.1 million and funds received of
approximately US$900,000 as of May 13, 2002 from certain of our existing
European investors, if we do not receive additional funding, our ability to
continue as a going concern cannot be assured.

To this end, we have initiated a cost reduction program to reduce our negative
cash burn from over US$600,000 per month to approximately US$250,000 -
US$300,000 per month. We are reducing costs in all areas of our operating plan
until sufficient capital is raised to support growth and more substantial orders
materialize. In the event we do not receive additional funding, we plan to: 1)
further reduce our costs and focus on selling existing products and services; 2)
sell our assets through a merger or acquisition; or, 3) seek protection under
bankruptcy status. Even with our cost reduction plan, we need to raise
additional funding to continue as a going concern.

         On January 8, 2002, we entered into a common
stock purchase agreement with DTKA Holdings Limited pursuant to which we may
draw down on an equity line with DTKA Holdings and require it to purchase up to
US$10 million of our common stock over a period of twenty-four (24) months.
However, we do not intend to draw down any funds under this facility.

         If we receive at least another US$2 million from a private placement
offering, or equivalent funding from another source or sources and are able to
access the US$10 million equity line, we project that we should have sufficient
resources to fund operations through 2002. If we do not receive additional
capital, we may not be able to continue as a going concern. Even if we can
continue operations, a lack of sufficient funding would significantly limit our
ability to take advantage of potential opportunities, develop or enhance
products or otherwise respond to competitive pressures. We cannot assure you
that additional financing will be available on terms favorable to us, if at all.

         Any additional funding will be used to expand our marketing and sales
capabilities, support the manufacture of customer orders, develop an operational
infrastructure and develop new or enhanced services or products. In addition, we
will support the growing need to provide demonstrations of our technology to
potential customers and to finance the commercialization of the products we
develop. If we raise additional funds through the issuance of equity or
equity-linked securities, the percentage ownership of our stockholders would be
reduced. In addition, these securities may have rights, preferences or
privileges senior to the rights of the securities held by our current
stockholders.

         We have incurred losses since inception and may never be profitable.

         We have incurred operating losses since our inception in January 1998,
and we expect to incur losses and negative cash flow for at least the next few
quarters. As of March 31, 2002, our accumulated deficit was approximately
US$26.9 million. We expect to continue to incur significant operating expenses
and research and development expenses and, as a result, we will need to generate
significant revenues to achieve profitability. Even if we do achieve
profitability, we cannot assure you that we can sustain or increase
profitability on a quarterly or annual basis in the future.


         The market price of our common stock has fluctuated in the past and is
likely to continue to do so, thereby increasing the risk that you may lose all
or part of your investment.

         The market price for our common stock is susceptible to a number of
internal and external factors including:

o     quarterly variations in operating results and overall financial condition;

o     economic and political  developments  affecting  technology  spending
      generally and adoption of new technologies and products such as ours;

o     short-selling programs;

o     changes in IT spending patterns;

o     product sales progress, both positive and negative;

o     stock price changes in the previous  quarter  resulting in large
      increases or decreases in reported stock-based compensation expenses,
      causing our overall net income/loss to be highly volatile and
      unpredictable;

o     technological innovations by others;

o     the introduction of new products or changes in product pricing policies
      by us or our competitors;

o     proprietary rights disputes or litigation;

o     changes in earnings estimates by analysts or other factors;

o     additions or departures of key personnel; and

o     sales of substantial numbers of shares of our common stock or
      securities convertible into or exercisable for our common stock.

These and other factors may make it difficult for our stockholders to sell their
shares into the open market if and when  eligible to do so. In  addition,  stock
prices for many technology  companies,  especially  development-stage  companies
such as  ourselves,  fluctuate  widely  for  reasons  that may be  unrelated  to
operating results. These fluctuations,  as well as general economic,  market and
political conditions such as interest rate increases,  recessions or military or
political conflicts, may materially and adversely affect the market price of our
common stock, thereby causing you to lose some or all of your investment.

We recently  launched our initial  commercial  products and services,  and these
products  and  services  and our  products  still in  development,  may not gain
customer acceptance.

We have  launched  two  commercial  products  for sale into the video  transport
market:  the Path 1 Cx1000  IP  Video  Gateway  targeted  toward  the  broadcast
transmission  infrastructure segment of the video transport market, and the Path
1 Cx1400 IP Video Multiplexer targeted toward the video-on-demand infrastructure
segment of the video transport market. These products are in the early stages of
commercial  deployment and are subject to all the risks attendant to new product
introductions,  including  the  possible  presence  of  undetected  hardware  or
software defects in our products,  manufacturing  and distribution  limitations,
unforeseen delays in product  installation and customer  dissatisfaction.  There
can be no assurance that either of these initial products, or our products still
in development,  will achieve  acceptance by our targeted  markets at all, or in
time to assist in funding cash flow shortfalls.

We have limited  product sales  experience  and we are relying  primarily on one
dominant customer.

We have only a brief history of sales orders for our products and services. As a
result,  potential  customers  may decline to purchase  our initial  products or
services  due to our lack of an  established  "track  record,"  the level of our
products' technological sophistication,  price, our financial condition or other
factors.  Further reasons why prospective customers may decline to invest in our
products  and  services,  or may decide to purchase  competitors'  products  and
services, include:

o introduction of competitive technologies, products and services that may
render our products and services obsolete; o development or manufacturing delays
that prevent the timely introduction of our products to the market; o failure by
us to establish strong sales, marketing, distribution and customer service
capabilities; o reluctance to commit capital to new products and services; and o
general economic conditions affecting rates of adoption of new technologies, new
technology purchases and services associated with such new technologies.

In the event that our  products  and  services  are not  adopted at the rates we
currently  anticipate,  or do not  receive  a  significant  acceptance  from our
primary  targeted  dominant  customer,  our  operating  plan will be  negatively
affected and our capital  requirements  and cash flow shortfalls will be greater
than currently anticipated.

To date,  there has been only a limited  public  market for our common stock and
there is no assurance  that an active  trading  market for our common stock will
ever exist.

To date,  there has been only a limited  public  market for our  securities  and
there can be no assurance  that a broad public  market for our  securities  will
develop in the  future,  or if such a broad  market does  develop,  that it will
last.  Our common  stock is  presently  quoted for  trading on the OTC  Bulletin
Board, a quotation service that displays  real-time quotes and other information
about over-the-counter (OTC) equity securities,  and on the Third Segment of the
Frankfurt  Stock  Exchange.  Trading  activity  in our  common  stock on the OTC
Bulletin  Board is limited  and  trading  activity  in our  common  stock on the
Frankfurt  Stock Exchange is dormant.  In addition,  we may be unable to attract
and maintain  good-quality  market makers.  In the event a liquid market for our
common stock does  develop,  there can be no  assurance  that the market will be
strong  enough  to  absorb  all of  the  common  stock  currently  owned  by our
stockholders  and any common stock that may be issued in the future,  restricted
shares of our common stock that are eligible for resale under Rule 144, combined
with (i) the shares (and warrants to purchase shares) that we anticipate selling
in any  private  placement  offering,  (ii)  shares  that we may  issue  to DTKA
Holdings  pursuant to our equity line with them,  (iii)  shares of common  stock
owned by Leitch  Technology  Corporation  that  Leitch,  pursuant  to its demand
registration  rights,  may  require us to  register  for resale  into the public
market,  and (iv) shares issued or issuable  pursuant to our stock option plans,
have the  potential to create a  supply/demand  imbalance  that could  adversely
affect  our  stock  price.  In  addition,  subsequent  issuances  of  equity  or
equity-linked  securities may further  saturate the market for our common stock.
The  resale of  substantial  amounts  of our  common  stock will have an adverse
effect on the market price of our stock.

The  rate of  market  adoption  of our  technology  is  uncertain  and we  could
experience long and  unpredictable  sales cycles,  especially if the slowdown in
the telecommunications industry persists.

As ours is a new technology, it is extremely difficult to predict the timing and
rate of market adoption of our proposed products as well as of related new video
applications,  and thus  difficult  to  predict  when we might  begin to realize
revenue from product sales. We are providing new and highly  technical  products
and services to enable new applications. Thus, the duration of our sales efforts
with prospective  customers in all market segments is likely to be lengthy as we
seek to educate them on the uses and benefits of our products.  This sales cycle
could be  lengthened  even  further  by  potential  delays  related  to  product
implementation  as well as  delays  over  which we have  little  or no  control,
including:

o the length or total dollar amount of our prospective customers' planned
purchasing programs in regard to our products; o changes in prospective
customers' capital equipment budgets or purchasing priorities; o prospective
customers' internal acceptance reviews; and o the complexity of prospective
customers' technical needs.

These   uncertainties,   combined   with   the   worldwide   slowdown   in   the
telecommunications  business, which began in 2001, and the slowdown in corporate
spending  on  technology  generally  as well as new  technologies  such as ours,
substantially  complicate  our  planning and reduce  prospects  for sales of our
products.  If our prospective  customers  curtail or eliminate their  purchasing
programs,  decrease their capital budgets or reduce their  purchasing  priority,
our results of operations could be adversely affected.

Leitch Technology Corporation may not be an active, participating partner for us
in the professional broadcast video studio market.

In April 2000, we entered into a strategic  marketing  relationship  with Leitch
Technology Corporation,  a Canadian public company and international distributor
of  professional  video  products  that  owns  approximately  one-third  of  our
outstanding  common stock.  As part of this  strategic  marketing  relationship,
Leitch  invested US$10 million in us and gave us 200,000 shares of Leitch common
stock in consideration of our entering into a Technology  License Agreement with
Leitch, dated April 10, 2000 granting Leitch (i) a non-exclusive license to sell
and  otherwise  use  our  proprietary  TrueCircuit(R)  technology;  and  (ii)  a
worldwide,  exclusive license,  even as to us, to sell and otherwise exploit our
TrueCircuit(R)  technology in connection with commercial  activities directed to
the professional  broadcast video studio market. The non-exclusive license has a
term  of  five  years  (unless  earlier  terminated  by us  or  Leitch)  and  is
automatically   renewable  for  additional  five-year  periods  (unless  earlier
terminated by us or Leitch).  The duration of the exclusive  license with Leitch
is one year and, thereafter,  automatically renews for five consecutive one-year
periods,   provided  we  receive  the   minimum   aggregate   monies  and  other
consideration from Leitch required for that year. The minimum fees to be paid by
Leitch to maintain  its  exclusive  license  for the  five-year  exclusive  term
escalate  annually and total US$32 million,  exclusive of royalties.  After this
initial five-year term,  provided the exclusive license is still in effect,  the
minimum yearly thresholds would be negotiated,  within certain parameters, by us
and Leitch. Leitch is not obligated to pay us royalties until March 2006 for any
of the  TrueCircuit(R)-based  products sold by Leitch or its sub-licensees under
the exclusive license.
In April 2001, Leitch's exclusive license was automatically  renewed for another
year. We are currently  discussing  with Leitch the renewal terms and conditions
for this  exclusive  license for the twelve (12)  month-period  beginning  April
2002.  We  believe  that,  according  to the  terms  of the  Technology  License
Agreement,  Leitch  is  required  to  pay us  US$2  million  in  cash  or  other
consideration in order for Leitch's  exclusive license to be renewed until April
2003 (Leitch's  failure to pay the required  consideration  would cause Leitch's
exclusive  license to  automatically  convert to a  non-exclusive  license).  We
believe that the exclusive license is now terminated in favor of a non-exclusive
license. Leitch does not agree with our position. There can be no assurance that
we will come to a mutually  acceptable  resolution  with Leitch  regarding  this
potential payment dispute and the status of their license. Furthermore, if it is
found that Leitch is required to pay us US$2 million to maintain  its  exclusive
license for the tweleve (12) month-period  beginning April 2002, we believe that
Leitch will decline to remit such payment.

Although we entered into astrategic marketing  relationship with Leitch with the
expectation that Leitch,  as an established  company in the  professional  video
products  field  and  an  experienced  manufacturer  and  distributor  of  video
products, would provide us with a significantly enhanced ability to manufacture,
sell  and  distribute  our  initial  products  in this  field,  Leitch  had been
unsuccessful to date in selling  TrueCircuit(R)  technology-based  products into
the  professional  broadcast  video market or other  markets.  In January  2002,
Leitch notified us that they were giving consideration to the appropriateness of
the  valuation  of their  investment  in us as held on their  balance  sheet and
subsequently  wrote-down  their  investment  in us to zero.  On March 28,  2002,
Reginald J. Tiessen resigned from our Board of Directors. With the December 2001
resignation  of John A. MacDonald  from the Company's  Board of Directors,  this
leaves Leitch  without  current Path 1 Board  representation.  As of the date of
this  writing,  we do not  believe  that  Leitch  will be an active  partner  in
developing the  professional  broadcast video studio market for us. In addition,
any further deterioration in our relationship with Leitch could adversely affect
Leitch's  motivation  to  market  and sell our  TrueCircuit(R)  technology-based
products into the professional broadcast video studio market. This deterioration
would be  especially  damaging  should it be found  that  Leitch  has a right to
retain its  exclusive  license,  as Leitch  might  fail to commit the  necessary
technical,  financial and other  resources to  successfully  market our products
into the professional  broadcast studio video market,  yet still prevent us from
doing so. We believe we can now sell  TrueCircuit(R)  technology-based  products
into this market.

         We recently disposed of the assets of our Silicon Systems group.

         In October 2000, we agreed to purchase the assets of Metar ADC, an
application specific integrated circuit (ASIC) design and development company
based in Bucharest, Romania, from Metar SRL. We organized these assets into our
Silicon Systems business unit, which we named "Sistolic". Pursuant to the terms
of the asset purchase agreement, we incurred a contingent obligation to make
payments in October 2002 and October 2003 in an aggregate amount of US$850,000
to complete this acquisition.

         In December 2001, Sistolic entered into a non-exclusive licensing
agreement and an engineering services agreement with a large semiconductor
company pursuant to which Sistolic was to provide front-end design services. We
anticipated that the maximum amount of revenue we could realize from this
arrangement was approximately US$5.4 million. In March 2002, after considerable
work had been performed by us under the agreements, the large semiconductor
company informed us that they were summarily terminating these agreements.

         Due to this material and adverse turn of events, we concluded that we
could no longer sustain the negative cash flow from the Silicon Systems business
unit. On April 3, 2002, we sold all of the assets of this business unit back to
Metar SRL. The facility lease and employment contracts transferred as well, in
exchange for the elimination of all remaining obligations by us to Metar SRL,
the return of all stock options granted to Michael Florea and the Romanian
employees, a confirmation that performance criteria specified in Michael
Florea's employment agreement related to a potential US$4 million bonus with us
were never met by him and a limited use license to the business unit's
intellectual property in favor of us. We are investigating our available legal
options with regard to the large semiconductor company's abrupt termination of
our agreements with it.

         We may be unable to obtain full patent protection for our core
technology and there is a risk of infringement.

         On January 16, 2001, May 8, 2001 and May 31, 2001, we submitted
additional patent applications on topics surrounding our core technologies to
supplement our existing patent portfolio. However, there can be no assurance
that these or other patents will be issued to us, or, if additional patents are
issued, that they or our three existing patents will be broad enough to prevent
significant competition or that third parties will not infringe upon or design
around such patents to develop competing products. In addition, we have filed
patent applications in several foreign countries. There is no assurance that
these or any future patent applications will be granted, or if granted, that
they will not be challenged, invalidated or circumvented.

         In addition to seeking patent protection for our products, we intend to
rely upon a combination of trade secret, copyright and trademark laws and
contractual provisions to protect our proprietary rights in our products. There
can be no assurance that these protections will be adequate or that competitors
have not or will not independently develop technologies that are substantially
equivalent or superior to ours.

         There has been a trend toward litigation regarding patent and other
intellectual property rights in the telecommunications industry. Although there
are currently no lawsuits pending against us regarding possible infringement
claims, there can be no assurance such claims will not be asserted in the future
or that such assertions will not materially adversely affect our business,
financial conditions and results of operations. Any such suit, whether or not it
has merit, would be costly to us in terms of employee time and defense costs and
could materially adversely affect our business.

         If an infringement or misappropriation claim is successfully asserted
against us, we may need to obtain a license from the claimant to use the
intellectual property rights. There can be no assurance that such a license will
be available on reasonable terms if at all.

         We face competition from established and developing companies, many of
which have significantly greater resources than us, and we expect such
competition to grow.

          The markets for our products, proposed products and services are very
competitive. We face direct and indirect competition from a number of
established companies and development stage companies, and we anticipate that we
shall face increased competition in the future as existing competitors seek to
enhance their product offerings and new competitors emerge. Many of our
competitors have greater resources, higher name recognition, more established
reputations within the industry and stronger manufacturing, distribution, sales
and customer service capabilities than we do.

         The technologies that our competitors and we offer are expensive to
design, develop, manufacture and distribute. Competitive technologies may be
owned and distributed by established companies that possess substantially
greater financial, technical and other resources than we do.

         Competitive technologies that offer a similar or superior capacity to
converge and transmit audio, video and telephonic data on a real-time basis over
existing networks may currently exist or may be developed in the future. We
cannot assure you that any technology currently being developed by us is not
being developed by others or that our technology development efforts will result
in products that are competitive in terms of price and performance. If our
competitors develop products or services that offer significant price or
performance advantages as compared to our current and proposed products and
services, or if we are unable to improve our technology or develop or acquire
more competitive technology, our business could be adversely affected.

         We may not be able to profit from growth if we are unable to
effectively manage the growth.

         Assuming we receive adequate funding to conduct our business as
presently proposed to be conducted, we anticipate that we will grow rapidly in
the future. This anticipated growth will place strain on our managerial,
financial and personnel resources. The pace of our anticipated expansion,
together with the complexity of the technology involved in our products and the
level of expertise and technological sophistication incorporated into the
provision of our design, engineering, implementation and support services,
demands an unusual amount of focus on the operational needs of our future
customers for quality and reliability, as well as timely delivery and
post-installation and post-consultation field and remote support. In addition,
new customers, especially customers that purchase novel and technologically
sophisticated products such as ours, generally require significant engineering
support. Therefore, adoption of our platforms and products by customers would
increase the strain on our resources. To reach our goals, we will need to hire
rapidly, while, at the same time investing in our infrastructure. We expect that
we will also have to expand our facilities. In addition, we will need to:

o        successfully train, motivate and manage new employees;

o        expand our sales and support organization;

o        integrate new management and employees into our overall operations; and

o        establish improved financial and accounting systems.

         We may not succeed in anticipating all of the changing demands that
growth would impose on our systems, procedures and structure. If we fail to
effectively manage our expansion, our business may suffer.

         We may not be able to hire and assimilate key employees.

         Our future success will depend, in part, on our ability to attract and
retain highly skilled employees, including management, technical and sales
personnel. Significant competition exists for employees in our industry and in
our geographic region. We may be unable to identify and attract highly qualified
employees in the future. In addition, we may not be able to successfully
assimilate these employees or hire qualified personnel to replace them.

         We are dependent on our key employees for our future success.

Our  success  depends on the  efforts and  abilities  of our senior  management,
specifically Frederick A. Cary, Ronald D. Fellman, Douglas A. Palmer, Richard B.
Slansky,  David A.  Carnevale,  Bernard  J.  Tyler,  Yendo Hu and  other  senior
managers and certain other key personnel.  If any of these key employees  leaves
or is seriously injured and unable to work and we are unable to find a qualified
replacement, then our business could be harmed.




<PAGE>


         Unanticipated delays or problems in introducing our intended products
or improvements to our intended products may cause customer dissatisfaction or
deprive us of the "first to market" advantage.

         Delays in the development of products and the launch of commercial
products are not uncommon in high tech industries such as ours. If we experience
problems related to the introduction or modification of our intended products or
the reliability and quality of such products, which problems delay the
introduction of our intended products or product improvements by more than a few
months, we could experience reduced product sales and adverse publicity. We
believe the company first to market with viable products will gain a significant
advantage with customers; delays could prevent us from being the company that
gains this advantage.

         The issuance of common stock to DTKA Holdings under our equity line and
to purchasers of units in our current private placement offering would cause
significant dilution to our stockholders, and the resale of such shares by DTKA
and the purchasers in the private placement may depress the price of our common
stock.

     In January 2002,  we entered into a common stock  purchase  agreement  with
DTKA Holdings  Limited,  a British  Virgin  Islands  company,  for the potential
future  issuance  and sale of up to US$10  million  of  common  stock,  which is
required to be registered.  Under this arrangement,  we, at our sole discretion,
may,  from  time to time,  draw  down on this  facility  (otherwise  known as an
"equity  line"),  requiring DTKA Holdings to purchase shares of our common stock
at prices  calculated  on the basis of discounts  ranging from 6.5% to 8.5% from
the daily volume  weighted  average  price of our common stock on the  principal
exchange or trading  market on which our common  stock is trading on the date of
the draw  down.  We may not draw  down on this  facility  until we have  filed a
registration  statement with the Securities and Exchange  Commission to register
enough shares of common stock to cover the shares to be issued  pursuant to such
draw down, and until this  registration  statement has been declared  effective.
The issuance of shares of common stock to DTKA Holdings  pursuant to this equity
line could result in significant  dilution to our stockholders.  However,  we do
not intend to draw down on any funds under this facility.

         We offer stock options to our employees, non-employee directors,
consultants and advisors, which could result in ongoing dilution to all
stockholders.

We  maintain  two equity  compensation  plans:  (i) the 2000 Stock  Option/Stock
Issuance  Plan (the "2000  Plan"),  pursuant  to which we may issue  options and
common stock to employees,  officers,  directors,  consultants and advisors, and
(ii) the 2001 Employee Stock Purchase Plan (the  "Purchase  Plan"),  approved by
our stockholders in February 2002,  pursuant to which our employees are provided
the  opportunity to purchase our stock through payroll  deductions.  As of March
31, 2002, there were options  outstanding to purchase 3,986,435 shares of common
stock under our 2000 Plan;  257,502 shares of common stock will remain available
for issuance under the 2000 Plan. All of the outstanding option grants under the
2000  Plan  have  been  approved  by  the  Board  of  Directors;  option  grants
representing  3,886,435  shares  of  common  stock are  subject  to  stockholder
approval and will expire if such approval is not granted within 12 months of the
options'  respective  grant dates.  A maximum of 250,000  shares of common stock
have been authorized for issuance under the Purchase Plan.

         In addition, as of March 31, 2002, there were 612,043 shares of common
stock subject to outstanding options granted other than under the 2000 Plan or
Purchase Plan. These non-plan options were granted to various employees,
directors, consultants and advisors.

         We plan to continue to provide our employees opportunities to
participate in the Purchase Plan. We also plan to issue options, either under
the 2000 Plan or otherwise, to purchase sizable numbers of shares of common
stock to new and existing employees, officers, directors, advisors, consultants
or other individuals as we deem appropriate and in our best interests. These
ongoing purchases of our common stock (as well as future option grants by us and
subsequent exercises of options) could result in substantial dilution to all
stockholders and increased control by management.

         The number of shares of common stock subject to currently outstanding
options under the 2000 Plan, as well as shares of common stock subject to
options granted other than under the 2000 Plan, exceeds 30% of the total number
of shares of our currently outstanding common stock. The California Department
of Corporations has issued regulations for companies seeking qualification of
stock option plans, which regulations require that the total number of shares
issuable upon exercise of all options shall not exceed 30% of such companies'
outstanding shares, unless a percentage higher than 30% is approved by at least
two-thirds of the outstanding shares entitled to vote. We unsuccessfully sought
to obtain this two-thirds supermajority vote of the outstanding shares pursuant
to a written consent solicitation of our stockholders under a Proxy Statement
filed with the Securities and Exchange Commission on December 31, 2001. We will
attempt once more to obtain this supermajority vote at our 2002 Annual
Stockholder Meeting to be held June 14, 2002. Although we anticipate that we
will receive the requisite two-thirds stockholder approval to exceed this 30%
ceiling at this Annual Stockholder Meeting, the issuance of further stock
options and shares under the 2000 Plan requires qualification, or exemption from
qualification, of the securities under the "blue sky" securities provisions of
the California Corporations Code. In the event we do not receive the requisite
stockholder approval, our ability to grant options and stock as a means of
attracting and retaining employees and directors will be materially impaired.

         We are subject to local, state and federal regulation, as well as the
rules of any stock exchanges on which our securities might trade.

         Legislation affecting us (or the markets in which we compete) could
adversely impact our ability to implement our business plan on a going-forward
basis. The telecommunications industry is heavily regulated and these
regulations are subject to frequent change. Future changes in local, state,
federal or foreign regulations and legislation pertaining to the
telecommunications field may adversely affect prospective purchasers of
telecommunications equipment, which in turn would adversely affect our business.

         Our executive officers, directors and 5% stockholders currently
maintain substantial voting control over us and possess certain rights of first
offer and first refusal in regard to offers and sales of our securities.

         As of March 31, 2002, a small number of our executive officers,
directors and 5% stockholders, beneficially own, in the aggregate, approximately
48% of our outstanding common stock; these stockholders are, Leitch Technology
Corporation, Ronald D. Fellman and Douglas A. Palmer. As a result, these
stockholders (or subgroups of them) retain substantial control over matters
requiring approval by our stockholders, such as the election of directors and
approval of significant corporate transactions. Pursuant to the terms of a
stockholders' agreement with Leitch, dated April 10, 2000, Ronald D. Fellman and
Douglas A. Palmer, who together hold approximately 15% of our outstanding common
stock, have agreed to vote all securities of Path 1 held by them in favor of
designees of Leitch for two positions on our seven-person Board of Directors,
for as long as Leitch continues to hold at least 20% of our capital stock (on an
as-converted, as-exercised, fully-diluted basis). As of March 31, 2002, Leitch
held approximately one-third of our outstanding common stock. Leitch has
declined, for the time being, to exercise its right to designate director
nominees.

         Under this Stockholders' Agreement, Leitch Technology Corporation also
has rights of first refusal to purchase (i) any equity securities offered in a
private sale by Dr. Fellman, Dr. Elliott and Dr. Palmer at the dollar value of
the consideration offered in connection with such sale, and (ii) its pro rata
share of any capital stock, or rights, options, warrants or to purchase capital
stock issued by us, on the same terms and at the same price offered by us to the
third party or parties. These rights of first refusal and the voting agreement
give Leitch the potential to maintain or expand its substantial equity position
in us and exert significant influence over matters of corporate governance. The
right of first refusal with respect to securities offerings by us could, in
certain circumstances, serve as a deterrent to future acquirors, especially if
Leitch does not approve of a proposed merger or acquisition, and could give
Leitch the leverage to condition its consent to offerings of our securities on
our adoption of policies favored by Leitch. In addition, Leitch maintains demand
registration rights pursuant to which it can require us to register its shares
of our common stock with the Securities and Exchange Commission for resale into
the public market. Such registration and resale could adversely affect the price
of our common stock.

         Our equity compensation plans give wide latitude to the plan
administrator -- our Board of Directors or committee thereof -- to make option
grants or stock issuances to our officers and directors and to grant broad
auxiliary rights in connection with such option grants or stock issuances (e.g.
full or partial acceleration of vesting upon change of control or upon
attainment of certain performance milestones). In January 2002, our executive
officers and employees were granted stock options under our 2000 Stock
Option/Stock Issuance Plan in return for their agreement to voluntarily reduce
their salaries for a period of 90-days. Additional option grants to our officers
and directors would serve to increase their equity ownership of the company and
would allow these officers and directors, should they choose to exercise their
options, to exert increased control over us.

      Our charter documents contain provisions that could discourage a takeover.

         Our Certificate of Incorporation and Bylaws contain provisions that may
have the effect of making more difficult or delaying attempts by others to
obtain control of us, even when these attempts may be in the best interests of
the stockholders. Our Certificate of Incorporation authorizes our Board of
Directors, without further stockholder approval, to issue one or more series of
preferred stock. Any such series of preferred stock could have rights, including
voting rights, superior to that of our common stock, and rights to elect
directors as a class. Grant of such rights could provide the preferred stock
holders with significant control over matters of corporate governance.

         In addition, our Bylaws state that special meetings of the stockholders
may only be called by 20% or more of the outstanding stock entitled to vote at
such meeting, and also require that all significant transactions, even those
that would not otherwise require a vote of the Board of Directors, be reviewed
and approved by the Board. These Bylaws provisions may defer the calling of a
meeting at which a change of control might be effected and may serve to deter
potential acquirers.

         We do not intend to pay cash dividends.

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






<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We would be exposed to changes in interest rates primarily from our
marketable securities and investments in certain available-for-sale securities.
Under our current policies, we do not use interest rate derivative instruments
to manage exposure to interest rate changes. At March 31, 2002, we did not have
any marketable securities or investments in available-for-sale securities.


PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

Not applicable.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On January 9, 2002, the Board of Directors approved the issuance of a warrant to
DTKA Holdings Limited, a British Virgin Islands corporation ("DTKA") to purchase
up to 61,131 shares of Path 1 Network Technologies Inc. common stock at a
purchase price of US$5.6436 per share as partial consideration for providing an
equity line in the amount of US$10 million.

In addition, on January 9, 2002, as consideration for arranging the equity line,
Jesup & Lamont Securities Corporation also received a warrant to purchase up to
61,131 shares of Path 1 Network Technologies Inc common stock on the same terms
and conditions as the warrant issued to DTKA.

These were private placements, exempt from the Securities Act registration
requirement by virtue of Securities Act Section 4(2).

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.


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

On December 31, 2001, we filed a solicitation of written consents of the holders
of the Company's issued and outstanding Class A Common Stock, US$0.001 par
value, to obtain stockholder approval of certain important corporate actions.
Our Bylaws and the Delaware General Corporation Law authorize the use of written
consents as an alternative to holding any stockholders' meeting. The results of
solicitation of written consents follow:

         Proposal #1. To approve and adopt an amendment to our Certificate of
Incorporation authorizing (i) an increase in the number of shares of Class A
Common Stock from 20,000,000 shares to 40,000,000 shares, (ii) the
reclassification of each share of Class A Common Stock as a share of "Common
Stock", (iii) the elimination of the Class B Common Stock, and (iv) the creation
of 10,000,000 shares of "blank check" Preferred Stock. There were 4,570,920
votes for (i.e., consents given), 500 votes against and 375,000 abstained;

         Proposal #2. To approve and adopt an amendment to our 2000 Stock Option
Stock Issuance Plan authorizing an increase in the number of shares issuable
under the Plan, and to approve total option and share grants equal to up to 65%
of the Company's outstanding stock. There were 4,562,920 votes for, no votes
against and 383,500 abstained; and,

         Proposal #3. To approve and adopt the 2001 Employee Stock Purchase
Plan. There were 4,571,420 votes for, no votes against and 375,000 abstained.

Proposal #1 and proposal #3 were adopted. Proposal #2 required a supermajority
of 2/3rds of the total shares outstanding. Since there were insufficient shares
voting by written consent to constitute a supermajority, proposal #2 failed. We
have resubmitted (as separate proposals) the subject matter within proposal #2
to the stockholders for approval at the June 14, 2002 Annual Stockholders
Meeting.

ITEM 5.  OTHER INFORMATION


On March 28, 2002, Reginald J. Tiessen resigned as the Company's Chairman and as
a member of the Company's Board of Directors.  Mr. Cary, our President and Chief
Executive Officer, succeeded Mr. Tiessen as Chairman of the Board.

On April 30, 2002,  John J. Splavec  resigned as a member of the Company's Board
of Directors.  Mr. Robert Clasen  succeeded Mr. Splavec as a member of the Board
of Directors and will also serve as Chairman of the Compensation Committee.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

The following Form 8-K was filed during the three-month period ended March 31,
2002:

Report on Form 8-K. On January 29, 2002, the Company filed a Form 8-K under item
5, Other Events" announcing that the Company entered into an agreement with DTKA
Holdings Limited, a British Virgin Islands corporation  ("DTKA"),  for an equity
line of credit of up to US$10 million.



<PAGE>


Exhibits.  The following exhibits are filed with this report,
or incorporated by reference as noted.
-----------

Exhibit
Number   Description

2.1    Sale  Purchase  Agreement  among us,  Metar ADC and  Michael  Florea,
       dated October 13, 2000. (1)
3.1    Certificate of Incorporation, as amended. (2)
3.1.1  Certificate of Amendment of Certificate of  Incorporation,  as filed with
       the Delaware Secretary of State on February 28, 2002. (10)
3.2    Amended and Restated Bylaws. (2)
10.1   Lease Agreement between us and Spieker Properties,
       dated April 10, 1999. (2).
10.2   Stockholders'  Agreement, by and among us, Leitch Technology Corporation,
       Ronald D. Fellman, Douglas A. Palmer and Michael T.Elliott,
       dated April 7, 2000. (2)
10.3+  Technology License Agreement between us and Leitch Technology
       corporation, dated April 10, 2000. (2)
10.4#  Terms of Employment between us and Richard B. Slansky,
       dated May 5, 2000. (3)
10.5#  Employment  Agreement with Michael Florea,  dated October 13, 2000, as
       amended by Amendment No. 1 to the Employment  Agreement of Michael
       Florea, dated December 19, 2000. (4)
10.6   Settlement  Agreement and Mutual Release among Path 1 Network
       Technologies Inc., Douglas A. Palmer,  Ronald D. Fellman,  Linda
       Palmer, Franklin Felber and Merril Felber dated January 4, 2001. (5)
10.7   Path 1 Network Technologies Inc. 2000 Stock Option/Stock Issuance
       Plan. (6)
10.8   Form of Notice of Grant under the 2000 Stock Option/Stock Issuance
       Plan. (6)
10.9   Form of Stock Option Agreement under the 2000 Stock Option/Stock Issuance
       Plan. (6)
10.10  Employment Separation/Consulting Agreement and General Release between
       us and Michael Elliott dated April 4, 2001. (7)
10.11# Employment Agreement between us and Frederick A. Cary, dated
       September 7, 2001. (8)
10.12  Subscription Agreement between us and Meewui de Kraker dated,
       October 24, 2001. (10)
10.13  Promissory note between us and Meewui de Kraker, dated
       October 24, 2001. (10)
10.14  Stock Pledge Agreement between us and Meewui de Kraker, dated
       October 24, 2001. (10)
10.15  Technology License Agreement between us and Visionary Solutions dated
       December 11, 2001. (10)
10.16  Separation and General Release between us and Alan Remen dated
       January 8, 2002. (10)
10.17  Consulting Agreement between us and Alan Remen dated January 8, 2002.(10)
10.18  Common Stock Purchase Agreement between us and DTKA Holdings
       Limited, dated January 17, 2002. (9)
10.19  Registration Rights Agreement between us and DTKA Holdings Limited,
       dated January 17, 2002.
10.20* Path 1 Network Technologies 2001 Employee Stock Purchase Plan. (10)
10.21* Private Placement of up to US$5 million in Unregistered Securities and
       Warrants dated January 13, 2002. 10.22* Separation and Sale Agreement
       among us, Metar ADC SRL, and Michael Florea, dated as of April 1, 2002
       but executed and delivered April 3, 2002.

21     List of Subsidiaries. (10)
23.1   Consent of Ernst & Young LLP. (10)

(1) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Form 8-K filed with the Commission on October 30, 2000.

(2) This exhibit was filed as a part of, and is hereby incorporated by reference
to, our Registration Statement on Form 10 filed with the Securities and Exchange
Commission (the "Commission") on May 23, 2000, as amended by Form 10/A filed
with Commission on June 19, 2000.

(3) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000, filed with the Commission on March 29, 2001.

(4) This exhibit was previously filed as a part of, and is hereby the
incorporated by reference to, our Annual Report on Form 10-K for the year ended
December 31, 2000, filed with the Commission on March 29, 2001.

(5) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Current Report on Form 8-K, filed with the Commission on
January 31, 2001.

(6) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Registration Statement on Form S-8, filed with the
Commission on September 21, 2001.

(7) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Quarterly Report on Form 10-Q for the quarter ended June
30, 2001, filed with the Commission on August 14, 2001.

(8) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Quarterly Report on Form 10-Q or the quarter ended
September 30, 2001, filed with the Commission on November 13, 2001.

(9) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, Our Current Report on Form 8-K, filed with the Commission on
January 29, 2002.

(10) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, Our Current Report on Form 10-K, filed with the Commission on
April 15, 2002.

+ Confidential Treatment Requested
# Management Compensation Agreement
* Filed Herewith


<PAGE>


SIGNATURES

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


Path 1 Network Technologies Inc.


By: /s/ Frederick A. Cary
-------------------------
Frederick A. Cary
President and Chief Executive Officer


By: /s/ Richard B. Slansky
------------------------
Richard B. Slansky
Chief Financial Officer
(Principal Financial and Accounting Officer)

Date: May 14, 2002
























                                  Exhibit Index

The following exhibits are filed with this report, or incorporated by reference
as noted.

Exhibit
Number   Description
2.1      Sale  Purchase  Agreement  among us,  Metar ADC and  Michael  Florea,
         dated October 13, 2000. (1)
3.1      Certificate of Incorporation, as amended. (2)
3.1.1    Certificate of Amendment of Certificate of Incorporation, as filed
         with the    Delaware  Secretary  of State on  February  28, 2002. (10)
3.2      Amended and Restated Bylaws. (2)
10.1     Lease Agreement between us and Spieker Properties, dated April 10,
         1999. (2).
10.2     Stockholders'  Agreement, by and among us, Leitch Technology
         Corporation,  Ronald D. Fellman, Douglas A. Palmer and Michael T.
         Elliott, dated April 7, 2000. (2)
10.3+    Technology License Agreement between us and Leitch Technology
         corporation, dated April 10, 2000. (2)
10.4#    Terms of Employment between us and Richard B. Slansky, dated
         May 5, 2000. (3)
10.5#    Employment  Agreement with Michael Florea,  dated October 13, 2000,
         as amended by Amendment No. 1 to the Employment  Agreement of Michael
         Florea, dated December 19, 2000. (4)
10.6     Settlement  Agreement and Mutual Release among Path 1 Network
         Technologies Inc., Douglas A. Palmer,  Ronald D. Fellman,  Linda
         Palmer, Franklin Felber and Merril Felber dated January 4, 2001. (5)
10.7     Path 1 Network Technologies Inc. 2000 Stock Option/Stock
         Issuance Plan. (6)
10.8     Form of Notice of Grant under the 2000 Stock Option/Stock
         Issuance Plan. (6)
10.9     Form of Stock Option Agreement under the 2000 Stock Option/Stock
         Issuance Plan. (6)
10.10    Employment Separation/Consulting Agreement and General Release between
         us and Michael Elliott dated April 4, 2001. (7)
10.11#   Employment Agreement between us and Frederick A. Cary, dated
         September 7, 2001. (8)
10.12    Subscription Agreement between us and Meewui de Kraker dated,
         October 24, 2001. (10)
10.13    Promissory note between us and Meewui de Kraker, dated
         October 24, 2001. (10)
10.14    Stock Pledge Agreement between us and Meewui de Kraker, dated
         October 24, 2001. (10)
10.15    Technology License Agreement between us and Visionary Solutions dated
         December 11, 2001. (10)
10.16    Separation and General Release between us and Alan Remen dated
         January 8, 2002. (10)
10.17    Consulting Agreement between us and Alan Remen dated
         January 8, 2002. (10)
10.18    Common Stock Purchase Agreement between us and DTKA Holdings
         Limited, dated January 17, 2002. (9)
10.19    Registration Rights Agreement between us and DTKA Holdings Limited,
         dated January 17, 2002.
10.20*   Path 1 Network Technologies 2001 Employee Stock Purchase Plan. (10)
10.21*   Private Placement of up to US$5 million in Unregistered Securities and
         Warrants dated January 13, 2002. 10.22* Separation and Sale Agreement
         among us, Metar ADC SRL, and Michael Florea, dated as of
         April 1, 2002 but executed and delivered April 3, 2002.

21       List of Subsidiaries. (10)
23.1     Consent of Ernst & Young LLP. (10)

(1) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Form 8-K filed with the Commission on October 30, 2000.

(2) This exhibit was filed as a part of, and is hereby incorporated by reference
to, our Registration Statement on Form 10 filed with the Securities and Exchange
Commission (the "Commission") on May 23, 2000, as amended by Form 10/A filed
with Commission on June 19, 2000.

(3) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000, filed with the Commission on March 29, 2001.

(4) This exhibit was previously filed as a part of, and is hereby the
incorporated by reference to, our Annual Report on Form 10-K for the year ended
December 31, 2000, filed with the Commission on March 29, 2001.

(5) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Current Report on Form 8-K, filed with the Commission on
January 31, 2001.

(6) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Registration Statement on Form S-8, filed with the
Commission on September 21, 2001.

(7) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Quarterly Report on Form 10-Q for the quarter ended June
30, 2001, filed with the Commission on August 14, 2001.

(8) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, our Quarterly Report on Form 10-Q or the quarter ended
September 30, 2001, filed with the Commission on November 13, 2001.

(9) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, Our Current Report on Form 8-K, filed with the Commission on
January 29, 2002.

(10) This exhibit was previously filed as a part of, and is hereby incorporated
by reference to, Our Current Report on Form 10-K, filed with the Commission on
April 15, 2002.

+ Confidential Treatment Requested
# Management Compensation Agreement
* Filed Herewith


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