Use these links to rapidly review the documentAPOGEE TECHNOLOGY, INC. INDEX OF INFORMATION CONTAINED IN FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 2002

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-QSB

|(Mark One)                                        |                                                                                         
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                 | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the Quarterly Period Ended September 30, 0002
|or                                               
|o                                                 | 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 000-30656

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APOGEE TECHNOLOGY, INC.(Exact name of registrant as specified in its charter)

|DELAWARE(State or other jurisdiction of
incorporation or organization)                           |  | 04-3005815(IRS Employer Identification No.)
|------------------------------------------------------------------------------------------------ |  | -------------------------------------------
|129 MORGAN DRIVE, NORWOOD, MASSACHUSETTS(Address of principal executive offices)                 |  | 02062(zip code)                            
|(781) 551-9450(Issuer's telephone number, including area code)                                  
|NOT APPLICABLE(Former name, former address and former fiscal year, if changed since last report)

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Check
whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ý    No o

State
the number of shares of each of the Issuer's classes of common equity, as of the latest practicable date: As of November 12, 2002, there were 5,258,710 shares of Common
Stock, $.01 par value per share, outstanding.

Transitional
Small Business Disclosure Format (Check
one): Yes o    No ý

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APOGEE TECHNOLOGY, INC.    INDEX OF INFORMATION CONTAINED IN FORM 10-QSB FOR THE  QUARTER ENDED SEPTEMBER 30, 2002



|                             |                                                                                                                                                      |    | PAGE
|---------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ----
|                             |                                                                                                                                                      |    |     
|PART IFINANCIAL INFORMATION
|Item 1                      | Financial Statements (Unaudited)                                                                                                                     |    |     
|                             | Condensed Consolidated Balance Sheets at September 30, 2002 and December 31, 2001.                                                                   |    | 3   
|                             | Condensed Consolidated Statements of Operations and Accumulated Deficit for the Three and Six Months Ended September 30, 2002 and September 30, 2001 |    | 4   
|                             | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and September 30, 2001                                  |    | 5   
|                             | Notes to Condensed Consolidated Financial Statements                                                                                                 |    | 6   
|Item 2                      | Management's Discussion and Analysis of Financial Condition and Results of Operation                                                                 |    | 10  
|Item 3                      | Quantitative and Qualitative Disclosures about Market Risk                                                                                           |    | 20  
|Item 4                      | Controls and Procedures                                                                                                                              |    | 20  
|PART IIOTHER INFORMATION   
|Item 1                      | Legal Proceedings                                                                                                                                    |    | 21  
|Item 2                      | Changes in Securities and Use of Proceeds                                                                                                            |    | 21  
|Item 3                      | Defaults Upon Senior Securities                                                                                                                      |    | 21  
|Item 4                      | Submission of Matters to a Vote of Security Holders                                                                                                  |    | 21  
|Item 5                      | Other Information                                                                                                                                    |    | 21  
|Item 6                      | Exhibits and Reports on Form 8-K                                                                                                                     |    | 21  
|Signatures                   |                                                                                                                                                      | 22
|Certifications               |                                                                                                                                                      | 23

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APOGEE TECHNOLOGY, INC. AND SUBSIDIARY        CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                          |                                                                                                   | SEPTEMBER 30,
2002         |             | DECEMBER 31,
2001 |          
|----------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | -------------------------- | ----------- | ----------------- | ---------
|
|ASSETS                                                                                                                                    |                                                                                                   |                            |             |                   |          
|Current assets                                                                                                                            |                                                                                                   |                            |             |                   |          
|                                                                                                                                          | Cash and cash equivalents                                                                         |                            | $           | 636,574           |          
|                                                                                                                                          | Accounts receivable, net of allowance for doubtful accounts of $20,000 in 2002 and $5,000 in 2001 |                            |             | 1,735,644         |          
|                                                                                                                                          | Inventories                                                                                       |                            |             | 151,828           |          
|                                                                                                                                          | Prepaid expenses                                                                                  |                            |             | 39,030            |          
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|                                                                                                                                          |                                                                                                   | Total current assets       |             |                   | 2,563,076
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|Property and equipment, net of accumulated depreciation of $280,242 in 2002 and $217,491 in 2001                                          |                                                                                                   |                            | 133,519     |                   |          
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|Other assets                                                                                                                              |                                                                                                   |                            |             |                   |          
|                                                                                                                                          | Digital amplifier patents, net of accumulated amortization of $79,680 in 2002 and $68,157 in 2001 |                            |             | 85,957            |          
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|                                                                                                                                          |                                                                                                   | $                          | 2,782,552   |                   | $        
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                      |                                                                                                   |                            |             |                   |          
|Current liabilities                                                                                                                       |                                                                                                   |                            |             |                   |          
|                                                                                                                                          | Accounts payable and accrued expenses                                                             |                            | $           | 947,453           |          
|                                                                                                                                          | Current maturities of capital lease obligations                                                   |                            |             | 20,673            |          
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|                                                                                                                                          |                                                                                                   | Total current liabilities  |             |                   | 968,126  
|Capitalized lease obligationsnet of current maturities                                                                                   |                                                                                                   |                            | 4,920       |                   |          
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|                                                                                                                                          |                                                                                                   | Total Liabilities          |             |                   | 973,046  
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|Stockholders' equity                                                                                                                      |                                                                                                   |                            |             |                   |          
|Common stock, $.01 par value; 20,000,000 shares authorized, 5,232,251 and 5,213,051 issued and outstanding in 2002 and 2001, respectively |                                                                                                   |                            | 52,322      |                   |          
|Additional paid-in capital                                                                                                                |                                                                                                   |                            | 12,826,306  |                   |          
|Accumulated deficit                                                                                                                       |                                                                                                   |                            | (11,069,122 | )                 |          
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|                                                                                                                                          |                                                                                                   | Total stockholders' equity |             |                   | 1,809,506
|                                                                                                                                          |                                                                                                   |                            |             |                   |          
|                                                                                                                                          |                                                                                                   | $                          | 2,782,552   |                   | $        
|                                                                                                                                          |                                                                                                   |                            |             |                   |          

3

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APOGEE TECHNOLOGY, INC. AND SUBSIDIARY        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        AND ACCUMULATED DEFICIT

|                                                             |                                     | THREE MONTHS ENDED
SEPTEMBER 30, |             | NINE MONTHS ENDED
SEPTEMBER 30, |  
|------------------------------------------------------------ | ----------------------------------- | -------------------------------- | ----------- | ------------------------------- | -
|
|Revenues                                                     |                                     |                                  |             |                                 |  
|                                                             | Product sales                       |                                  | $           | 1,024,639                       |  
|                                                             | License fee                         |                                  |             |                                |  
|                                                             | Royalties                           |                                  |             | 492,576                         |  
|                                                             | Consulting                          |                                  |             | 113,000                         |  
|                                                             |                                     |                                  |             |                                 |  
|                                                             |                                     |                                  | 1,630,215   |                                 |  
|                                                             |                                     |                                  |             |                                 |  
|Costs and expenses                                           |                                     |                                  |             |                                 |  
|                                                             | Product sales                       |                                  |             | 720,310                         |  
|                                                             | Research and development            |                                  |             | 483,165                         |  
|                                                             | Selling, general and administrative |                                  |             | 412,098                         |  
|                                                             |                                     |                                  |             |                                 |  
|                                                             |                                     |                                  | 1,615,573   |                                 |  
|                                                             |                                     |                                  |             |                                 |  
|Income (loss) before other income (expense)                  |                                     |                                  | 14,642      |                                 |  
|Other income (expense)                                       |                                     |                                  |             |                                 |  
|                                                             | Interest expense                    |                                  |             | (1,131                          | )
|                                                             | Interest income                     |                                  |             | 5,634                           |  
|                                                             |                                     |                                  |             |                                 |  
|                                                             |                                     |                                  | 4,503       |                                 |  
|                                                             |                                     |                                  |             |                                 |  
|Net income (loss)                                            |                                     |                                  | 19,145      |                                 |  
|Accumulated deficitbeginning                                |                                     |                                  | (11,088,267 | )                               |  
|                                                             |                                     |                                  |             |                                 |  
|Accumulated deficitending                                   |                                     | $                                | (11,069,122 | )                               | $
|                                                             |                                     |                                  |             |                                 |  
|Basic and diluted income (loss) per common share             |                                     | $                                | 0.00        |                                 | $
|                                                             |                                     |                                  |             |                                 |  
|Weighted average common shares outstandingbasic and diluted |                                     |                                  | 5,234,751   |                                 |  
|                                                             |                                     |                                  |             |                                 |  

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APOGEE TECHNOLOGY, INC. AND SUBSIDIARY        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                      |                                         | NINE MONTHS ENDED
SEPTEMBER 30,                                             |                                
|------------------------------------- | --------------------------------------- | --------------------------------------------------------------------------- | -------------------------------
|
|Cash flows from operations            |                                         |                                                                             |                                
|                                      | Net loss                                |                                                                             | $                              
|                                      |                                         | Adjustments to reconcile net loss to net cash used in operating activities: |                                
|                                      |                                         |                                                                             | Provision for doubtful accounts
|                                      |                                         |                                                                             | Depreciation and amortization  
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|Cash flows from investing activities  |                                         |                                                                             |                                
|                                      | Purchases of property and equipment     |                                                                             |                                
|                                      | Patent costs                            |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|Cash flows from financing activities  |                                         |                                                                             |                                
|                                      | Proceeds from issuances of common stock |                                                                             |                                
|                                      | Redemption of common stock              |                                                                             |                                
|                                      | Repayment of capital lease obligations  |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|                                      |                                         |                                                                             |                                
|Decrease in cash and cash equivalents |                                         |                                                                             | (1,750,604                     
|Cash and cash equivalentsbeginning   |                                         |                                                                             | 2,387,178                      
|                                      |                                         |                                                                             |                                
|Cash and cash equivalentsending      |                                         | $                                                                           | 636,574                        
|                                      |                                         |                                                                             |                                

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APOGEE TECHNOLOGY, INC. AND SUBSIDIARY        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        SEPTEMBER 30, 2002 AND 2001

1.    Basis of Presentation

The condensed consolidated interim financial statements have been prepared in accordance with the requirements of Regulation S-B and with the
instructions to Form 10-QSB. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position,
results of operations and cash flows have been included. The results of operations for the nine month period ended September 30, 2002 are not necessarily indicative of the operating results to
be expected for the year ending December 31, 2002. These financial statements should be read in conjunction with the financial statements and accompanying notes for the year ended
December 31, 2001.

The
balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.

The
financial statements include the accounts of Apogee Technology, Inc. ("Technology"), and its wholly owned inactive subsidiary, DUBLA, Inc. (collectively the "Company").
All significant intercompany transactions and accounts have been eliminated.

The
Company is engaged in the development, design and marketing of digital amplifier technology and related sales of semi-conductor chips. The Company is presently focused on
computer based audio and entertainment media applications derived from its all-digital amplifier design trademarked as Direct Digital Amplification (DDX®).

The
accompanying condensed 2002 financial statements and the accompanying condensed consolidated balance sheet at December 31, 2001 have been prepared assuming the Company will
continue as a going concern. Because the Company has had recurring losses, there is doubt as to the Company's ability to continue as a going concern. The Company plans to expand its marketing and
sales efforts, raise additional capital through a private placement (Note 8), and obtain a new credit facility (Note 8). The viability of the Company is dependent upon its ability to
further develop and market its DDX technology applications and raise sufficient funds for such purposes. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.

2.    Accounts Receivable

The Company carries its accounts receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable
and establishes an allowance for doubtful accounts, based on a history of past write-offs and collections and current credit conditions. If the financial condition of the Company's
customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Two
of the Company's major customers accounted for approximately 74% of the total accounts receivable balance at September 30, 2002.

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3.    Inventories

Inventories are stated at the lower of cost (first in, first-out) or market. The major classifications of inventories are as follows at period end:

September 30,
2002

December 31,
2001(Unaudited)Raw materials

$
35,226

$
27,484Work in process





14,779Finished goods


116,602


377,784$
151,828

$
420,047


4.    Stock Transaction

During the three months ended September 30, 2002, 10,000 shares of common stock were redeemed and retired at $0.55 per share.

5.    Stock Options

During the three months ended September 30, 2002 the Board of Directors awarded options to purchase 16,000 shares at $8.39 per share to certain employees.
These options were granted under the 1997 Incentive Stock Option Plan. The options vest over five years beginning at the first anniversary of the date of grant.

6.    License Agreement

On February 7, 2001, the Company signed an exclusive license agreement with ST Microelectronics NV ("ST") of the Netherlands. The agreement calls for ST to
use certain intellectual property rights owned or controlled by the Company to commercialize and sell related products utilizing such technology. In consideration for this license, ST paid to the
Company a one-time license fee of $1.6 million in cash and a $400,000 credit for future design services. The Company will also receive royalties based on certain formulas, as
defined in the agreement. This agreement has no expiration date, however, either party may cancel the agreement upon certain advance notices as defined in the agreement. The $400,000
credit portion of the license fee is associated with future development activities of the Company and will not be recognized in income before that happens.

During
the third quarter of 2002, ST performed design services for the Company valued at $113,000 which was recorded as consulting revenues and simultaneously charged to research and
development costs. When the $287,000 balance of the aforementioned credit is recognized in income, it will also be charged to research and development costs.

7.    Litigation

On February 19, 2002, Acoustic Technology, Inc. ("ATI") filed a complaint in the Superior Court of Suffolk County, Massachusetts, against
Mr. Tak Ping Tsui, a former employee of ATI and a current employee of the Company, in which the Company was also named a defendant. The complaint alleges that the Company interfered with ATI's
noncompete agreement with Mr. Tsui and violated the Massachusetts statutes on unfair and deceptive trade practices and trade secrets by hiring Mr. Tsui. ATI

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has claimed $1,000,000 in damages from Mr. Tsui and the Company. On February 26, 2002, the Suffolk County Superior Court denied, without prejudice, ATI's motion for a preliminary
injunction seeking to stop the Company from continuing to employ Mr. Tsui and to require the Company to provide information regarding Mr. Tsui's employment by the Company. On
July 2, 2002, the Suffolk County Superior Court further dismissed the misrepresentation claim against Mr. Tsui. Finally on August 7, 2002, counsel for ATI served a motion seeking
to withdraw his representation of ATI in this matter. The Company intends to defend vigorously the claims against it in this matter. Further, the Company has brought a counterclaim against ATI for
unfair and deceptive trade practices and unfair methods of competition.

8.    Subsequent Events



On October 30, 2002, the Company obtained a $1 million discretionary line-of-credit from a bank. Any borrowings under the
line, which expires on August 31, 2003, are due on demand. Borrowings are limited to the lesser of $1 million or the sum of 75% of eligible domestic accounts receivable and 80% of
eligible foreign accounts receivable. The bank, at its discretion, may make additional loan advances up to $500,000, exclusive of the formula, but not to exceed the $1 million. The line is
secured by the
Company's assets and has been personally guaranteed by two of the Company's officers/directors. Interest is payable monthly at the bank's base rate plus one percent per annum.



On November 6, 2002, the Company completed a Private Placement of $500,000 consisting of 83,333 shares of common stock at $6.00 per share.

9.    Summary of Quarterly Operating Data

Below is a summary of quarterly operating data. Any trends reflected by the following table may not be indicative of future results.

|                                               |  | 2002 |         
|---------------------------------------------- |  | ---- | --------
|
|
|
|Product sales                                  |  | $    | 286,049 
|Royalties                                      |  |      | 121,965 
|Consulting                                     |  |      | 13,400  
|Research and development costs                 |  |      | 393,212 
|Net (loss) income                              |  |      | (768,997
|Basic and common diluted loss per common share |  |      | (0.15   

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For
the nine months ended September 30, 2002 approximately 63% of the Company's product sales were from 3 customers in the Far East.

|                                                        |  | 2001 |          
|------------------------------------------------------- |  | ---- | ---------
|
|
|
|Product sales                                           |  | $    | 12,540   
|License fee                                             |  |      | 1,420,000
|Royalties                                               |  |      | 62,500   
|Consulting                                              |  |      | 25,000   
|Research and development costs                          |  |      | 278,387  
|Net income (loss)                                       |  |      | 861,174  
|Basic and common diluted income (loss) per common share |  |      | 0.17     

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

GENERAL

The following Management's Discussion and Analysis of the Company's Financial Condition and Results of Operations for the three- and nine- month
periods ended September 30, 2002 and September 30, 2001 should be read in conjunction with the Company's Financial Statements and the related Notes included elsewhere in this Quarterly
Report on Form 10-QSB. This discussion contains, in addition to historical statements, forward-looking statements that involve risks and uncertainties. The Company's actual results
could differ significantly from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include the factors discussed in the section titled
"Certain Risk Factors That May Affect Future Results of Operations And Our Common Stock Price" as well as other factors described in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2001. The Company does not intend to update any such forward-looking statements.

INTRODUCTION

The Company designs, develops and markets semiconductor products and integrated circuits (ICs), that incorporate the company's patented Direct Digital
Amplification (DDX®) technology. DDX-based IC products are used in a range of audio applications including: home theater systems, powered speakers, car audio, commercial audio,
and PC multi-media. Under a licensing agreement with STMicroelectronics NV (ST), the Company is developing and providing intellectual property to be used in royalty bearing products produced by ST. In
addition, the Company is working under a development agreement with ST to develop and market new semiconductor products that leverage Apogee's DDX technology and ST's intellectual property and
semiconductor design, development and manufacturing capability. ST is currently shipping five royalty bearing DDX-based semiconductor products. The Company has developed and is marketing
six different DDX-based semiconductor products and has additional products in development. The Company markets DDX products using a worldwide network of direct sales staff, independent
sales representatives and distributors. The Company generates revenue from the sale of DDX-based semiconductor products and evaluation boards. The Company incurred a net loss of
approximately $960,000 for the nine months ended September 30, 2002, as compared to a net
loss of approximately $211,000 for the nine months ended September 30, 2001. The lower net loss for the nine-month period ended September 30, 2001 was the result of a
one-time, initial fee paid to the Company in connection with its licensing agreement with ST. As of September 30, 2002, the Company had an accumulated deficit of approximately
$11.1 million, as compared to a deficit of approximately $10.1 million as of December 31, 2001. Of this accumulated deficit, approximately $4 million was attributable to
the Company's now defunct loudspeaker business, which was discontinued in 1994. The Company's net losses and accumulated deficit (since 1995) result primarily from research costs associated with the
Company's efforts to develop and market its DDX technology.

As
of September 30, 2002, the Company had 25 employees, up from 24 as of June 30, 2002 and 22 as of December 31, 2001, and up from 17 employees as of
September 30, 2001.

During
the three-month period ended September 30, 2002, five customers represented, in the aggregate, approximately 82% of total revenue. The Company utilizes a network of sales
representatives and distributors, as well as a sales office in Hong Kong, to support the Company's sales and marketing activities on a worldwide basis.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected financial data for the three- and nine-month periods ended September 30, 2002 and September 30, 2001 have been
derived from the Company's financial statements. Any trends reflected by the following table may not be indicative of future results.

|                                            |  | For the three-month period
ended September 30, |           | For the nine-month period
ended September 30, |   
|------------------------------------------- |  | ---------------------------------------------- | --------- | --------------------------------------------- | --
|
|Statement of Operations Data:               |  |                                                |           |                                               |   
|Revenue                                     |  | $                                              | 1,630,215 |                                               | $ 
|Cost and expenses                           |  |                                                | 1,615,573 |                                               |   
|Other income (expense)                      |  |                                                | 4,503     |                                               |   
|Net Profit (Loss)                           |  | $                                              | 19,145    |                                               | ($
|Shares Outstanding                          |  |                                                | 5,232,251 |                                               |   
|Balance Sheet Data:                         |  |                                                |           |                                               |   
|Total assets                                |  | $                                              | 2,782,552 |                                               | $ 
|Stockholders' equity                        |  | $                                              | 1,809,506 |                                               | $ 
|Profit (Loss) per share (basic and diluted) |  | $                                              | 0.00      |                                               | $ 

RESULTS OF CONTINUING OPERATIONS OF THE COMPANY

Revenues

Total revenue increased by approximately $1.5 million, or 812% to approximately $1.6 million for the three months ended September 30, 2002
from approximately $179,000 for the three months ended September 31, 2001 and increased by approximately $1.6 million or 89% to approximately $3.4 million for the nine months
ended September 30, 2002 from approximately $1.8 million for the nine months ended
September 30, 2001. Revenue for the three and nine months ended September 30, 2001 primarily consisted of the one-time, initial fee paid in connection with the Company's
licensing agreement with ST. The increase in revenue for both the three and nine months ended September 30, 2002 from the same period in 2001 was primarily due to increased sales of Apogee's
semiconductor products, as well as increased royalty payments under the Licensing Agreement with ST. During the nine months and three months ended September 30, 2002, revenue consisted of
product sales, royalties and consulting fees. Revenues from the sale of its products, consisting of DDX evaluation boards and semiconductor ICs, increased by approximately $908,000 to
$1.0 million from $116,000 for the three-month period ended September 30, 2002 compared to the three-month period ended September 30, 2001, and by approximately
$2.2 million to $2.3 million from $147,000 for the nine-month period ended September 30, 2002 compared to the nine-month period ended September 30,
2002. This increase in Product Revenue was primarily due to growth in the sales of the Company's semiconductor products particularly in the Far East. Revenue from non-product related items
accounted for approximately 37% and 30% of total revenue for the three and nine months ended September 30, 2002, compared to revenue for non-product related items of approximately
35% and 79% of total revenue for the same period in 2001. During the three months and nine months ended September 30, 2002, the Company recorded net royalty payments under the ST agreement of
approximately $493,000 and $894,000, compared to royalty payments of $62,500 and $125,000 for the same period in 2001, representing an increase of approximately 700% and 500% for the respective
periods. In addition, during the third quarter ended September 30, 2002, the Company recognized $113,000 of consulting revenue from design services performed by ST as part of a $400,000 design
credit in accordance with the terms of the Licensing Agreement with ST. Simultaneously the $113,000 was charged to research and development costs.

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Cost of Revenue

Cost of revenue was approximately $720,000 and $1.6 million for the three months and nine months ended September 30, 2002 compared to approximately
$97,000 and $118,000 for the same period in 2001. Cost of Revenue includes cost of purchasing finished semiconductor chips and costs associated with assembly, test and shipping of those products as
well as customs and storage fees associated with warehousing a portion of the Company's semiconductor products in Asia. This increase in the cost of revenue is primarily attributable to costs relating
to increased sales of the Company's semiconductor products and the establishment of a storage facility in Asia. The Company anticipates that the cost of revenue will continue to increase in dollar
amounts as the Company expects an increase in sales. For the three months and nine months ended September 30, 2002, the Company recorded a gross profit on product sales of 31% and 30%,
respectively. Since revenue for the three months and nine months ended September 30, 2001 primarily consisted of a one-time license fee paid by STMicroelectronics, gross profit on
product sales was not relevant.

Research and Development ("R&D") Expenses

Engineering and development expenses consist primarily of salaries and related expenses in the design, development and technical support of the Company's
products. Research and development expenses
increased to approximately $483,000 and $1.3 million for the three months and nine months ended September 30, 2002, compared to approximately $285,000 and $817,000 for the same period in
2001. This increase of approximately 69% and 57%, respectively, was related to increased staffing and use of third party consultants to assist with the design of PC Boards to support the Company's
customers and potential customers. Costs related to human resources for R&D increased to approximately $337,000 and $956,000 from $257,000 and $728,000 for the three months and nine months ended
September 30, 2002, an increase of approximately $81,000 or 31% and $228,000 or 31%, respectively. For the three months ended September 30, 2002, $113,000 was incurred as a result of
partial utilization of a $400,000 design credit to STMicroelectronics offsetting $113,000 of consulting revenue recognized during the third quarter. The balance of this credit will be charged to
research and development costs as the Company recognizes the income. For the three and nine months ended September 30, 2002 third party consultants accounted for approximately $11,000 and
$120,000 of total research and development costs. During the three months and nine months ended September 30, 2001, the Company had minimally used third party consultants. The overall increase
reflects the Company's expanded research and development activity as evidenced by the employment of sixteen employees in research and development as of September 30, 2001, an increase of four
from September 30, 2002. During the three and nine months ended September 30, 2002, the Company released an improved version of its controller chip, the DDX-8000, and several
reference design boards to support semiconductor product marketing. Due to the technical nature of the Company's products, engineering and design support are critical parts of the Company's strategy
during both the development of its products and the support to its customers from product design to final production. Management anticipates that it will continue to commit resources to research,
development and design activities. It expects these expenses to increase, but to decline as a percentage of revenue.

Selling, General and Administrative ("SG&A") Expenses

Selling expenses consist primarily of salaries and related expenses for personnel engaged in the marketing and sales of the Company's products, as well as costs
related to trade shows, product literature, travel and other promotional support costs. In addition, selling expenses include costs related to operation of the Hong Kong sales office, opened in
April 2002. General and administrative costs consist primarily of executive and administrative salaries, professional fees and other associated corporate expenses. SG&A expenses were
approximately $412,000 and $1,475,000 for the three and nine months ended September 30, 2002 compared to $300,000 and $1.1 million for the same period in

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2001, an increase of approximately $122,000 or 37% and $352,000 or 31%, respectively. Human resource costs increased approximately $70,000 and $303,000 to approximately $164,000 and $551,000 during
the three months and nine months ended September 30, 2002 compared to $94,000 and $248,000 during the same period in 2001, an increase of 74% and 122%, respectively. This increase is primarily
due to higher compensation associated with additional employees, including four employees in Asia. Approximately $42,000 and $73,000 of the Human Resource expense for the three and nine months ended
September 30, 2002 is directly related to staffing the Company's Asian office. The overall increase reflects the Company's expansion of its sales and marketing activity as evidenced by the
establishment of a sales office in Hong Kong. In addition, the company utilizes a sales consultant based in Taiwan to help support the sales effort in the Far East. Travel expense for the three months
and nine months ended September 30, 2002 was approximately $47,000 and $170,000, compared to approximately $43,000 and $117,000 for the same period last year, an increase of approximately
$4,000 or 8% and $53,000 or 45%, respectively, over the same period in 2001. This increase was primarily due to increased travel to the Far East predominantly for customer design and support.
Professional expenses
decreased approximately $22,000 and $69,000 for the three months and nine months ended September 30, 2002 to approximately $65,000 and $318,000 from approximately $87,000 and $387,000 for the
three months and nine months ended September 30, 2002, a decrease of 25% and 18%, respectively. For the three months and nine months ended September 30, 2002, combined legal and
accounting expenses accounted for approximately $32,000 and $226,000, compared to $44,000 and $293,000 for the three months and nine months ended September 30, 2001, a decrease of 31% and 42%,
respectively. This decrease in both the three months and nine months was partially attributable to the Company's completion of relisting on the NASDAQ SmallCap Market during Fiscal 2001. The Company
expects that selling, general and administrative expenses will increase in absolute dollars in future periods as the Company expands its sales channels, marketing efforts and administrative
infrastructure, but to decline as a percentage of revenue.

Interest Income (Expense)

Interest income, net of expense, includes income from the Company's cash and cash equivalents and from investments and expenses related to its financing
activities. During the three months and nine months ended September 30, 2002, the Company generated net interest income of approximately $5,000 and $19,000 compared to net interest income of
approximately $12,000 and $39,000 during the same period in 2001. The decrease in non-operating income over the three-month and nine-month period ended September 30,
2002 was primarily due to use of funds and lower interest rates on cash and short-term investments.

Net Profit (Loss)

The Company basically broke even for the three months ended September 30, 2002 reporting a profit of approximately $19,000 or $.004 per basic and diluted
common stock per share. For the nine months ended September 30, 2002, the Company's net loss was approximately $960,000, or $.18 per basic and diluted common share, compared to a loss of
approximately $491,000, or $.10 per basic and diluted common share and $211,000 or $.04 per basic and diluted common share, respectively for the three and nine month period ended September 30,
2001. The $211,000 net loss for the nine-month periods ended September 30, 2001 was, in part, the result of a $1.4 million one-time, initial fee paid in
connection with the Company's licensing agreement with ST during February 2001.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal source of liquidity at September 30, 2002 consisted of approximately $637,000 in cash and short-term investments and no
debt. This compares to approximately $2,387,000 in cash and cash equivalents at December 31, 2001. This decrease in cash was due to financing of the

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Company's $1.7 million in Accounts Receivable as well as working capital requirements. On October 30, 2002, the Company secured a $1 million revolving bank line of credit and on
November 6, 2002 completed a $500,000 private placement.

Net
cash used in operations during the nine-month period ended September 30, 2002 was approximately $1,690,000 compared to approximately $85,000 used in operations in
the nine-month period ended September 30, 2001. As of September 30, 2002, inventory was approximately $152,000 compared to inventory of approximately $163,000 as of
September 30, 2001. Net accounts receivable was approximately $1,736,000 at September 30, 2002, up from approximately $165,000 as of September 30, 2001. This increase in accounts
receivable was due to increased shipments of the Company's semiconductor products during the third quarter of 2002. As of September 30, 2002, four major customers accounted for approximately
87% of the total accounts receivable balance. The Company increased its reserve against bad debts to $20,000 as of September 30, 2002 from $5,000 as of December 31, 2001. The Company
believes this reserve is sufficient at this time as a significant percentage of the Company's receivables are secured by letters of credit.

Net
cash used in investing activities for the nine months ended September 30, 2002 was approximately $61,000, compared to approximately $94,000 for the nine months ended
September 30, 2001.

No
cash was used in financing activities for the nine months ended September 30, 2002, compared to approximately $6,000 provided by financing activities during the same period in
2001. During the nine-month period ended September 30, 2002, the Company received approximately $27,000 net in cash from the exercise of options and warrants. During the period ended
September 30, 2002, 10,000 shares of exercised options were cancelled, thereby reducing the net cash received from financing activities by approximately $6,000 from the previous quarter ended
June 30, 2002. The Company believes that cash flow from operations and the completion of a $500,000 private placement in November 2002, together with amounts available under its working
capital line of credit, secured in October 2002, are sufficient to support operations and fund capital equipment requirements over the next twelve months.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets,
liabilities and expenses. On an on-going basis, the Company evaluates its estimates, including those related to uncollectible accounts receivable, inventories, intangibles and other
long-lived assets. The Company bases its estimates on historical experience and on various other assumptions that are believed 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.

The
Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. The
Company maintains
allowances for uncollectible accounts receivable for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company's customers
were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company maintains allowances for estimated excess or obsolete inventories
based on the Company's review of inventory levels, projected future sales and comparison of actual manufacturing costs to standard costs. If actual market conditions are less than favorable than those
projected by management, additional allowances may be required. Property, plant and equipment, patents, trademarks and other intangible assets are amortized over their estimated useful lives. Useful
lives are based on management's estimates over the period that such assets will generate revenue. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate

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that the carrying value of an asset may not be recoverable. Future adverse changes in market conditions or poor operating results of underlying capital investments or intangible assets could result
in losses or an inability to recover the carrying value of such assets, thereby possibly requiring an impairment charge in the future.

CERTAIN RISK FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS AND OUR COMMON STOCK PRICE

There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements.
Factors that could cause or contribute to such differences include those discussed below, as well as those discussed elsewhere in this Form 10-QSB. We disclaim any intention or
obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

RISKS RELATED TO OUR BUSINESS

WE HAVE A HISTORY OF LOSSES, EXPECT FUTURE LOSSES AND MAY NEVER ACHIEVE OR SUSTAIN PROFITABILITY.

As of September 30, 2002, we had accumulated deficit of approximately $11.1 million. Of this amount, approximately $4 million was generated
by the Company's former loudspeaker subsidiary, Apogee Acoustics, Inc., which discontinued operations in 1994. We incurred net losses of approximately $960,000 for the nine months ended
September 30, 2002, $895,000 for the year ended December 31, 2001, $1.9 million in 2000 and $1.1 million in 1999. We may continue to incur net losses and generate negative
cash flow in the future. We will need to continue to generate revenue to achieve and sustain profitability and positive cash flow. Our ability to generate future revenue and achieve and sustain
profitability will depend on a number of factors, many of which are described throughout this risk
factor section. If we are unable to achieve or maintain profitability, our share price would likely decline.

THE COMPANY HAS ONLY A SMALL NUMBER OF CUSTOMERS, AND THE LOSS OF THESE CUSTOMERS WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY'S BUSINESS.

During the nine months ended September 30, 2002, the Company derived approximately 82% of its total revenues from five customers. The loss of any of the
company's customers would have a material adverse effect on the Company's business, financial condition and results of operations. The Company intends to diversify its customer base in the coming
months in order to reduce its dependence on a small number of customers. The Company may not be able to succeed in these efforts.

OUR MARKETS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND, THEREFORE, OUR SUCCESS DEPENDS ON OUR ABILITY TO INTRODUCE NEW PRODUCTS IN A TIMELY FASHION.

The life cycle of the technology and any future products developed by us may be limited by the emergence of new products and technologies, changes in consumer
preferences and other factors. Our future performance will depend on our ability to consistently:



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There
can be no assurance that we will be successful in developing and marketing new products that respond to technological and competitive developments and changing customer needs, or
that such products will gain market acceptance and be incorporated into the technology or products of third parties. Any significant delay or failure to develop new enhanced technologies, including
new product offerings, and any failure of the marketplace to accept any new technology and product offerings would have a material adverse effect on our business, financial condition and results of
operations.

WE MAY REQUIRE ADDITIONAL CAPITAL TO FUND OUR OPERATIONS AND RESEARCH AND DEVELOPMENT.

Because we have historically had losses and only a limited amount of cash has been generated from operations, we have funded our operating activities to date
primarily from the sale of securities. We will likely require additional capital in the future, which may be in the form of additional sales of securities. The additional capital may not be readily
available to us on favorable terms, if at all. The sale of securities will result in dilution to our current stockholders' ownership in the Company.

OUR ABILITY TO ACHIEVE SUSTAINED REVENUE GROWTH WILL BE HARMED IF WE ARE UNABLE TO MAINTAIN OUR EXISTING LICENSING RELATIONSHIPS.

Part of our business strategy is to expand our licensing activities with ST and to enter into licensing relationships with other companies in order to offer
products to a larger customer base than could be reached through our own development and marketing efforts. We believe that such relationships can accelerate market penetration of our products and
technologies, while limiting our manufacturing exposure and sales and marketing costs. However, there can be no assurance that we will be able to expand or maintain our existing licensing
relationships or establish new licensing relationships on commercially reasonable terms, if at all. Any future inability by us to maintain our licensing relationships or to enter into additional
licensing relationships, or the failure of one or more of our licensing relationships to contribute to the development and maintenance of a market for our products, could have a material adverse
effect on our business, operating results and financial condition.

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE

We have experienced fluctuations in our quarterly operating results in the past and it is likely that these fluctuations will continue in the future. These
fluctuations are caused by many factors, including, but not limited to:


availability and pricing from our suppliers;


changes in the demand for our products by customers;


introductions or enhancements of products, or delays in the introductions or enhancements of products, by us or our competitors;


rate and success of new customer development;


changes in our pricing policies or those of our competitors;


success in attracting, retaining and motivating qualified personnel; and

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
changes in general economic conditions.

A
substantial portion of our operating expenses is related to personnel, facilities, and sales and marketing programs and are fixed. Our expense level is based in part on our
expectations of future orders and sales, which are extremely difficult to predict. Accordingly, we may not be able to adjust our fixed expenses quickly enough to address any significant shortfall in
demand for our products in relation to our expectations.

Fluctuations
in our operating results may also result in fluctuations in our common stock price. In such event, the trading price of our common stock would likely suffer and adversely
affect our ability to raise capital and the value of your investment in the Company.

IF WE ARE UNABLE TO HIRE OR RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE TO OPERATE OUR BUSINESS SUCCESSFULLY.

We may not be successful in recruiting and retaining executive officers and other key management and technical personnel. The competition for employees with the
necessary high level of technical expertise to design and market our products is intense, particularly in eastern Massachusetts. We will need to hire a number of additional technical personnel if we
are to increase the rate at which we develop new products. Because competition for highly skilled technical personnel is so intense, companies in Apogee's industry are subject from time to time to
complaints brought by competitors alleging interference with contractual relations or wrongful hiring of employees. Such lawsuits may be costly, may divert management attention and resources from the
operation of our business, and may therefore adversely affect our financial condition and results of operations. In addition, the loss of the management and technical expertise of our senior
management could seriously harm us.

WE DO NOT HAVE MANUFACTURING CAPABILITIES, AND AS A RESULT, WE RELY ON OUTSIDE FOUNDRIES TO MANUFACTURE OUR SEMICONDUCTOR PRODUCTS.

We have no manufacturing capabilities, nor do we have plans to establish any such capabilities. Accordingly, we utilize outside semiconductor foundries to
manufacture our semiconductor products. There are significant risks associated with our reliance on these foundries that can adversely affect our business, operating results and financial condition.
These risks include:



OUR PRODUCTS USE NEW TECHNOLOGY AND MAY HAVE MANUFACTURING DEFECTS OR OTHER CHARACTERISTICS THAT ARE ONLY DETECTED AFTER INSTALLATION IN CUSTOMER APPLICATIONS, WHICH MAY HARM
OUR BUSINESS.

Our products are based on recently developed technology and are manufactured using state-of-the-art manufacturing processes.
Our approach to product qualification and testing may not fully evaluate or identify product characteristics or defects that could adversely affect the product's ability to operate in the intended
application. If such defects or characteristics are discovered after

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installation, product revenue might be significantly delayed and our ability to maintain existing customers and to retain new customers may be seriously affected.

OUR ABILITY TO ACHIEVE REVENUE GROWTH WILL BE HARMED IF WE ARE UNABLE TO PERSUADE THE MARKET TO ADOPT OUR NEW AMPLIFIER TECHNOLOGY.

We face challenges in persuading manufacturers to adopt our products using our new DDX amplifier technology. Traditional amplifiers use design approaches
developed in the 1930s. These approaches are still used in most amplifiers and engineers are familiar with these design approaches. In order to adopt our products, manufacturers and engineers must
understand and accept our new technology. In addition, our amplifier technology may be more expensive for some applications than the traditional amplifier technology. For these reasons, prospective
customers may be reluctant to adopt our technology.

INTENSE COMPETITION IN THE SEMICONDUCTOR AND CONSUMER AUDIO INDUSTRY COULD PREVENT US FROM ACHIEVING OR SUSTAINING PROFITABILITY.

The semiconductor and consumer audio industry is highly competitive, and we expect the intensity of the competition to increase. Many of our competitors have
greater financial, technical, research, marketing, sales, distribution, service and other resources than we do. Moreover, our competitors may offer broader product lines and have greater name
recognition than we do, and may offer discounts as a competitive tactic. In addition, several development stage companies are currently creating or developing technologies and products that compete
with or are being designed to compete with our technologies and products. Our competitors may develop or market technologies or products that are more effective or more commercially attractive than
our current or future products, or that may render our technologies or products less competitive or obsolete. Accordingly, if competitors introduce superior technologies or products and we cannot make
enhancements to our technologies and products necessary for them to remain competitive, our competitive position, and in turn, our business, revenues and financial condition, will be seriously harmed.

RISKS RELATED TO OUR INTELLECTUAL PROPERTY

OUR INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS MAY BE INSUFFICIENT TO PROTECT OUR COMPETITIVE POSITION.

Our business depends, in part, on our ability to protect our intellectual property. We rely primarily on patent, copyright, trademark and trade secret laws to
protect our proprietary technologies. We cannot be sure that such measures will provide meaningful protection for our proprietary technologies and processes. We have two issued United States patents
and two pending patent applications. We cannot be sure that any existing or future patents will not be challenged, invalidated or circumvented, or that any right granted thereunder would provide us
meaningful protection. The failure of any patents to provide protection to our technology would make it easier for our competitors to offer similar products.

We
also generally enter into confidentiality agreements with our employees and strategic partners, and generally control access to and distribution of our documentation and other
proprietary information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our products or technology without authorization, develop similar
technology independently or design around our patents. In addition, effective copyright, trademark and trade secret protection may be unavailable or limited in certain foreign countries.

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WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY RIGHTS DISPUTES WHICH COULD DIVERT MANAGEMENT'S ATTENTION AND COULD BE COSTLY.

The semiconductor and consumer audio industry is characterized by vigorous protection and pursuit of intellectual property rights. From time to time, we may
receive notices of claims of infringement, misappropriation or misuse of other parties' proprietary rights. We cannot be sure that we will prevail in these actions, or that other actions alleging
infringement by us of third-party patents, misappropriation or misuse by us of third-party trade secrets or the invalidity of one or more patents held by us will not be asserted or prosecuted against
us, or that any assertions of infringement, misappropriation or misuse or prosecutions seeking to establish the invalidity of our patents will not seriously harm our business. For example, in a patent
or trade secret action, an injunction could be issued against us requiring that we withdraw particular products from the market or necessitating that specific products offered for sale or under
development be redesigned.

Irrespective
of the validity or successful assertion of various claims of infringement, misappropriation or misuse of other parties' proprietary rights, we would likely incur significant
costs and diversion of our management and personnel resources with respect to the defense of such claims, which could seriously harm our business. If any claims or actions are asserted against us, we
may seek to obtain a license under a third party's intellectual property rights. We cannot be sure that under such circumstances a license would be available on commercially reasonable terms, if at
all. Moreover, we often incorporate the intellectual property of our strategic customers into our designs, and we have certain obligations with respect to the non-use and non-
disclosure of such intellectual property. We cannot be sure that the steps taken by us to prevent our, or our customers', misappropriation or infringement of the intellectual property will be
successful.

RISKS RELATING TO OUR COMMON STOCK

MARKET FLUCTUATIONS COULD NEGATIVELY IMPACT THE MARKET PRICE OF OUR COMMON STOCK.

The stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many
technology companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. We expect that the market price of our Common Stock will
fluctuate as a result of variations in our quarterly operating results. These fluctuations may be exaggerated if the trading volume of our Common Stock is low. In addition, due to the
technology-intensive nature of our business, the market price for our Common Stock may rise and fall in response to various factors including:



In
addition, market fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may
negatively impact the market price of our Common Stock.

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BECAUSE A LIMITED NUMBER OF PERSONS, INCLUDING DIRECTORS AND EXECUTIVE OFFICERS, OWN A MAJORITY OF OUR COMMON STOCK AND THEREFORE CONTROL OUR COMPANY, DECISIONS MAY BE MADE BY
THEM THAT MAY BE DETRIMENTAL TO OTHER STOCKHOLDERS.

As of September 30, 2002 our executive officers and directors owned approximately fifty-eight percent (58.19%) of the outstanding shares of Common Stock of
the Company. Accordingly, such persons have sufficient voting power to control the outcome of matters that are put to a stockholder vote, including the election of a majority of the board of
directors, and any merger, consolidation or sale of all or substantially all of our assets, and also have control over our management and affairs. As a result of such voting power, these stockholders
will be able to control the outcome of corporate actions, including proxy contests, mergers involving us, tender offers, open market purchase programs or other purchases of Common Stock that could
give our stockholders the opportunity to realize a premium over the then prevailing market price for their shares of Common Stock. This concentration of ownership could also adversely affect our
stock's market price.

ITEM 3QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's financial instruments include: cash, cash equivalents, accounts receivable and accounts payable. At September 30, 2002, the carrying value of
the Company's cash, cash equivalents accounts receivable and accounts payables approximate fair values given the short maturity of these instruments.

Although
the Company's sales are predominately to international markets, the Company believes that it does not have material foreign currency exchange rate risk since international sales
are in U.S. dollars and material purchases from foreign suppliers are typically also denominated in U.S. dollars. Additionally, the functional currency of the Company's foreign sales office is the
U.S. dollar.

It
is the Company's policy not to enter into derivative financial instruments for speculative purposes.

ITEM 4CONTROLS AND PROCEDURES



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PART IIOTHER INFORMATION

ITEM 1LEGAL PROCEEDINGS

Not applicable.

ITEM 2CHANGES IN SECURITIES

On July 24, 2002, the Company redeemed and cancelled 10,000 shares of common stock that had been issued upon exercise of options by one employee.

On
August 16, 2002, the Company granted options to three employees to purchase, in the aggregate, up to 16,000 shares of the Company's Common Stock at an exercise price of $8.39
per share, under the Plan.

ITEM 3DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5OTHER INFORMATION

None.

ITEM 6EXHIBITS AND REPORTS ON FORM 8-K





There
were no reports on Form 8-K filed in the three months ended September 30, 2002.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                        |  | APOGEE TECHNOLOGY, INC.
|----------------------- |  | -----------------------
|Date: November 14, 2002 |  | By:                    
|Date: November 14, 2002 |  | By:                    

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CERTIFICATION PURSUANT TO  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,
Herbert M. Stein, certify that:





Date:
November 14, 2002

/s/
Herbert M. Stein
Herbert M. Stein, Chairman of the Board,
President and Chief Executive Officer

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CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,
David Spiegel, certify that:





Date:
November 14, 2002

/s/
David Spiegel
David Spiegel
Treasurer and Principal Financial Officer and Principal Accounting Officer

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FORM-10QSB  SEPTEMBER 30, 2002

EXHIBIT INDEX

|Exhibit
Number |  | Description                                                                                                                                                                                   
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|99.1           |  | Statement Pursuant to Section 906 the Sarbanes-Oxley Act of 2002 by Chief Executive Officer and Principal Financial Officer Regarding Facts and Circumstances Relating to Exchange Act Filings

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