REPEATER TECHNOLOGIES INC, 424B4, 2000-08-09

REPEATER TECHNOLOGIES INC
424B4, 2000-08-09
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

Previous: C2 INC, 10-Q, EX-27, 2000-08-09

Next: CABLEVISION SYSTEMS CORP /NY, PRES14A, 2000-08-09

<PAGE> 1

FILED PURSUANT TO RULE 424(b)(4)
REGISTRATION NO. 333-31266
4,750,000 SHARES

REPEATER
TECHNOLOGIES, INC.

COMMON STOCK

$9.00 PER SHARE

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

-- Repeater Technologies, Inc. is offering 4,750,000 shares.

-- Trading symbol: Nasdaq National Market -- RPTR.
-- This is our initial public offering and no public market currently exists
for our shares.

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

THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----------
<S> <C> <C>
Public offering price....................................... $9.00 $42,750,000
Underwriting discount....................................... $0.63 $ 2,992,500
Proceeds to Repeater Technologies, Inc. .................... $8.37 $39,757,500
</TABLE>

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

The underwriters have a 30-day option to purchase up to 712,500 additional
shares of common stock from us to cover over-allotments, if any.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF ANYONE'S INVESTMENT IN THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

U.S. BANCORP PIPER JAFFRAY BANC OF AMERICA SECURITIES LLC

THE DATE OF THIS PROSPECTUS IS AUGUST 8, 2000.
[REPEATER TECHNOLOGIES LOGO]
<PAGE> 2
[Inside Front Cover Graphics]

Inside Front Cover Graphic

An artist's rendition of a populated geographic area with an overlay of a
RepeaterHybrid Network.

Text Title: "RepeaterHybrid(TM) Network"

On the perimeter of the map are four small pictures of products and services
that the company provides.

Picture 1 Graphic: Picture of RepeaterStar antenna

Picture 1 Text: RepeaterStar(TM) Donor Antenna

Picture 2 Graphic: A service man installing a NetworkRepeater on a pole.

Picture 2 Text: NetworkRepeater(TM)

Picture 3 Graphic: A Computer Terminal with radio frequency prediction plots on
the screen and the wall.

Picture 3 Text: RepeaterCAD(TM) network design and application services

Picture 4 Graphic: Picture of RepeaterNet (Computer rack)

Picture 4 Text: RepeaterNet(TM) network management system

Inside Back Cover:

Map of the World with symbols placed on the map where we have deployed
repeaters. (The map has no political boundaries and the symbols have no identity
to operator or countries).

Text Title: "Repeater Technologies has deployed network repeaters with over 40
wireless service providers on 5 continents".

Bottom of page Graphic: Picture of NetworkRepeater with cellular telephone.

Bottom of the page Text: Company Logo with Design and Company Name.
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 1
Risk Factors................................................ 4
Special Note Regarding Forward-Looking Statements........... 12
Use of Proceeds............................................. 13
Dividend Policy............................................. 13
Capitalization.............................................. 14
Dilution.................................................... 15
Selected Consolidated Financial Data........................ 16
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 17
Business.................................................... 27
Management.................................................. 39
Principal Stockholders...................................... 49
Certain Transactions........................................ 52
Description of Capital Stock................................ 56
Shares Eligible for Future Sale............................. 60
United States Federal Income Tax Consequences to Non-U.S.
Persons................................................... 62
Underwriting................................................ 65
Legal Matters............................................... 67
Experts..................................................... 67
Change in Independent Accountants........................... 68
Where You Can Find More Information......................... 69
Index to Consolidated Financial Statements.................. F-1
</TABLE>

---------------------------------------------
<PAGE> 4

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

SUMMARY

The items in the following summary are described in more detail later in this
prospectus. This summary provides an overview of selected information and does
not contain all the information you should consider. Therefore, you should also
read the more detailed information and the consolidated financial statements
contained in this prospectus.

REPEATER TECHNOLOGIES, INC.

We develop, market and sell wireless network equipment primarily to providers of
code division multiple access or CDMA-based wireless services. CDMA is a rapidly
growing wireless communications standard for the digital transmission of voice
and data. We provide cost-effective, high quality coverage systems utilizing
CDMA technology. These systems can be used in suburban and rural areas, urban
areas and inside office buildings and other coverage-limited structures. Our
products have been deployed with over 40 CDMA wireless service providers in ten
countries.

Our products are based on our Network Repeater technology that works in
conjunction with base stations to expand the coverage area of a wireless
network. A base station is a key component of a wireless network used to receive
and transmit voice and data signals over radio frequencies. Our Network Repeater
receives, amplifies and re-transmits voice and data signals between mobile
handsets and base stations and provides a wireless connection to the
telecommunications network.

Our RepeaterHybrid Network solutions incorporate our family of Network
Repeaters, antenna systems, network management systems and network design
services to provide outdoor wireless service coverage. These products are used
in conjunction with third-party base stations to increase coverage at
significantly reduced cost by reducing the number of required base stations,
related communication links and other wireless network equipment. We have
deployed 20 RepeaterHybrid Networks with 12 service providers.

Our Distributed Antenna System provides in-building coverage using copper cable
and small antennas. Our OfficeCell distributed antenna system, currently under
development, will provide in-building coverage utilizing fiber-optic cable to
link distributed antennas for increased flexibility and broader coverage. These
systems can be used in a wide range of indoor areas, including office buildings,
shopping malls, sports arenas and tunnels. Our in-building products offer low
cost, ease of installation and remote monitoring via our proprietary network
management system. We have deployed our copper cable Distributed Antenna System
with 16 service providers in six countries.

Our goal is to be the leader in the development and deployment of
CDMA-compatible wireless network equipment. To achieve this goal, our strategy
is to:

- Continue to expand our installed base of Network Repeaters;

- Expand our in-building capabilities;

- Establish a market leadership position in the next generation of
wireless networks for high-speed data access commonly referred to in the
wireless communications industry as third generation or "3G";

- Focus on network design and customer support; and

- Pursue strategic acquisitions.

We have incurred losses since our inception and we expect to continue to incur
losses at least through our fiscal year ending March 2001.

OFFICE LOCATION

We are incorporated in Delaware. Our principal executive offices are located at
1150 Morse Avenue, Sunnyvale, California 94089 and our telephone number is (408)
747-1900. Information contained on our web site does not constitute part of this
prospectus.

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

1
<PAGE> 5

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

THE OFFERING

Common stock offered.................. 4,750,000 shares

Common stock outstanding after the
offering.............................. 22,666,525 shares

Offering price........................ $9.00 per share

Use of proceeds....................... We intend to use the net proceeds
from this offering primarily for
general corporate purposes, including
working capital, research and
development, sales and marketing,
network design services, capital
expenditures and potential
acquisitions.

Nasdaq National Market symbol......... RPTR

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

Unless otherwise indicated, all information contained in this prospectus,
including the outstanding share information above, is based on 3,374,737 shares
of common stock outstanding as of June 30, 2000 and:

- assumes filing of our amended and restated certificate of incorporation
which will become effective upon the closing of this offering;

- assumes conversion of all outstanding shares of preferred stock into
10,116,319 shares of common stock upon the closing of this offering;

- assumes conversion of outstanding Series DD convertible subordinated
debentures into 2,727,263 shares of common stock upon the closing of
this offering;

- includes the issuance of $5.1 million of Series EE convertible
subordinated debentures on July 11, 2000 and the conversion of such
debentures into 637,500 shares of common stock upon the closing of this
offering;

- assumes the exercise of outstanding warrants for 1,060,706 shares of
common stock at a weighted average exercise price of $2.06 per share,
which will expire if not exercised by 5:00 p.m. upon the closing of this
offering;

- excludes 3,914,886 shares of common stock issuable upon the exercise of
outstanding options having a weighted average exercise price of $4.13
per share;

- excludes 250,395 shares of common stock issuable upon the exercise of
outstanding warrants, including 127,500 shares issuable upon the
exercise of warrants issued on July 11, 2000, having a weighted average
exercise price of $6.55 per share; and

- assumes no exercise of the underwriters' option to purchase up to
712,500 additional shares of common stock to cover over-allotments.

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

2
<PAGE> 6

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

SUMMARY CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)

The following table summarizes the financial data for our business during the
periods indicated. You should read this information together with our
consolidated financial statements, the notes to those statements beginning on
page F-1 of this prospectus, and the information under "Selected Consolidated
Financial Data," "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
---------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- -------------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 4,823 $12,104 $49,810
Working capital............................................. 4,641 11,922 49,628
Total assets................................................ 16,217 23,498 61,204
Long-term obligations....................................... 3,585 3,585 3,585
Convertible subordinated debentures......................... 15,000 -- --
Total stockholders' equity (deficit)........................ (11,604) 10,677 48,383
</TABLE>

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

Pro forma gives effect to the automatic conversion of all of our outstanding
shares of preferred stock into 10,116,319 shares of our common stock, all of our
convertible debentures into 3,364,763 shares of our common stock and the
exercise of warrants outstanding as of March 31, 2000 exercisable for 1,069,349
shares of our common stock, which will expire if not exercised by 5:00 p.m. on
the date of the closing of this offering.

Pro forma as adjusted gives effect to this offering at an initial public
offering price of $9.00 per share and the automatic conversion of all of our
outstanding shares of preferred stock into 10,116,319 shares of our common
stock, all of our convertible debentures into 3,364,763 shares of our common
stock and assumes the exercise of warrants outstanding as of March 31, 2000
exercisable for 1,069,349 shares of our common stock, which will expire if not
exercised by 5:00 p.m. on the date of the closing of this offering.

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

3
<PAGE> 7

RISK FACTORS

You should carefully consider the following risk factors before you decide to
buy our common stock. You should also consider the other information in this
prospectus.

WE HAVE INCURRED SIGNIFICANT LOSSES SINCE WE BEGAN DOING BUSINESS, ANTICIPATE
CONTINUING LOSSES, AND MAY NEVER ACHIEVE OR SUSTAIN PROFITABILITY.

We have accumulated losses of $55.9 million since we began doing business in
1983 through March 31, 2000, and we may never achieve or sustain profitability.
We incurred a net loss of $12.6 million for the fiscal year ended March 27,
1998, a net loss of $10.6 million for the fiscal year ended March 26, 1999, and
a net loss of $15.0 million for the fiscal year ended March 31, 2000. We will
continue to incur significant expenses, particularly research and product
development and sales and marketing expenses, and we expect our expenses to
increase as compared to prior periods. We anticipate incurring net losses at
least through the fiscal year ending March 2001. We will need to generate
significantly higher revenues to achieve profitability and recoup our
accumulated losses. We cannot be certain that we will realize sufficient
revenues to sustain our business.

WE HAVE DEPLOYED A LIMITED NUMBER OF REPEATERHYBRID NETWORKS AND WE MAY NOT BE
ABLE TO GAIN BROAD MARKET ACCEPTANCE OF THE REPEATERHYBRID NETWORK CONCEPT.

Through March 31, 2000, only 20 RepeaterHybrid Networks have been deployed by 12
wireless service providers. If we fail to significantly increase the deployment
and market acceptance of our products and RepeaterHybrid Networks as
replacements for traditional networks using only base stations, we may fail to
generate sufficient revenues to sustain our business.

OUR QUARTERLY REVENUES AND OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY.

Our quarterly operating results have fluctuated significantly in the past and
are likely to do so in the future. Factors that could cause our quarterly
results to fluctuate include, but are not limited to:

- any delay in our introduction of new products or product enhancements
particularly our new products for use in 3G networks and new products
for in-building use;

- the concentration of customer orders at the end of a quarter which can
result in products shipping in the following quarter due to capacity
constraints faced by our contract manufacturers;

- the reduction in the selling price of our products due to competitive
pressures from base station manufacturers and the introduction of other
competing repeater products; and

- customer responses to announcements of new products and product
enhancements by competitors and the entry of new competitors into our
markets.

If our operating results do not meet the expectations of securities analysts and
investors, our stock price is likely to decline.

OUR LENGTHY AND VARIABLE SALES CYCLE MAKES IT DIFFICULT FOR US TO PREDICT IF AND
WHEN A SALE WILL BE MADE AND COULD LEAD TO OPERATING DIFFICULTIES AND CASH FLOW
PROBLEMS.

Our sales cycle, which is the period from the generation of a sales lead until
the recognition of revenues, ranges from nine to 24 months, making it difficult
to forecast revenues and operating results. Our inability to accurately predict
the timing and magnitude of sales of our products and services could cause a
number of problems including, but not limited to:

- we may have difficulty meeting our customers' product delivery
requirements in the event many orders are received in a short period of
time;

- we may expend significant management efforts and incur substantial sales
and marketing expenses in a particular period that do not translate into
orders during that period, or at all; and

4
<PAGE> 8

- we may have difficulty meeting our cash flow requirements and obtaining
credit because of delays in receiving orders.

The problems resulting from our lengthy and variable sales cycle could impede
our growth, cause fluctuations in our operating results and restrict our ability
to take advantage of new opportunities.

CERTAIN EXISTING CONTRACTS MAY NOT RESULT IN REVENUES AS LARGE AS PREVIOUSLY
DISCLOSED.

In the past, we publicly announced the signing of certain contracts or purchase
orders from major customers and their expected value or sales volume for us.
However, these contracts typically require no minimum purchase commitment and
the purchase orders are typically subject to cancellation. To date, we have not
achieved the expected values or sales volume publicly disclosed. Furthermore, we
may never achieve the expected values or sales volume publicly disclosed. While
we continue to internally estimate specific customer sales volumes for business
planning purposes, none of our prior publicly disclosed estimates should be
regarded as purchase commitments or indicative of our current estimates or
expectations.

A SMALL NUMBER OF CUSTOMERS ACCOUNT FOR A SUBSTANTIAL PORTION OF OUR REVENUES
AND THE LOSS OF ANY OF THESE CUSTOMERS COULD HARM OUR BUSINESS.

Our customer base has been and may continue to be concentrated with a small
number of customers. The loss of any of these customers, or the delay, reduction
or cancellation of orders by or shipments to any of these customers, could hurt
our results and cause a decline in our stock price. In the fiscal year ended
March 27, 1998, ten customers accounted for 69.9% of our net revenues, with
Eriline Telecom and Telus accounting for 18.4% and 14.9%, respectively. In the
fiscal year ended March 26, 1999, ten customers accounted for 50.0% of our net
revenues, with Clearnet PCS accounting for 10.6%. In the fiscal year ended March
31, 2000, ten customers accounted for 69.7% of our net revenues, with PrimeCo,
Wireless Facilities, Inc. and Clearnet PCS, accounting for 13.6%, 12.4% and
10.2%, respectively. When our products have been fully deployed in a customer's
network or a customer's demands are otherwise satisfied, we must replace that
customer's sales with those of new customers in order to maintain our sales
volume.

We do not have any long-term contracts with any of our customers. Our contracts
generally do not contain minimum purchase requirements and are terminable at any
time. We expect to continue to depend on a small number of customers for a
substantial portion of our revenues.

In addition, we face increased credit risks, including slow payments or
non-payments, due to the concentration of our customer base. In March 1999, we
increased our allowance for doubtful accounts by $0.7 million due to the
bankruptcy of a customer.

IF WE ARE UNABLE TO OBTAIN OR MAINTAIN VENDOR QUALIFICATION WITH NATIONWIDE
WIRELESS NETWORK OPERATORS, OUR ABILITY TO SELL OUR PRODUCTS WOULD BE IMPAIRED
AND OUR REVENUES WOULD LIKELY DECLINE.

Many of our current and potential customers are large major network operators or
affiliates of nationwide wireless network operators. In order to sell our
products to these affiliates, our products must be authorized for purchase by
the network operator. This authorization process is both costly and lengthy. If
we do not maintain our status as a qualified vendor or supplier, we will be
unable to sell our products to these network operators and their affiliates, and
our revenues will likely decline.

COMPETITION FROM LARGER, MORE ESTABLISHED COMPANIES WITH GREATER RESOURCES COULD
LEAD TO PRICE REDUCTIONS, LOSS OF REVENUES AND MARKET SHARE AND COULD PREVENT US
FROM ACHIEVING PROFITABILITY.

The market for base stations, repeaters and related products is highly
competitive. We compete with large infrastructure manufacturers, systems
integrators, repeater manufacturers and base station subsystem suppliers, as
well as new market entrants. Most of our current and potential competitors have
longer operating histories, larger installed customer bases, substantially
greater name recognition and more financial, technical, manufacturing,
marketing, sales, distribution and other resources than we do. We may not be
able to compete successfully against current and future competitors, including
companies that

5
<PAGE> 9

develop and market new wireless telecommunications products and services. If we
are forced to reduce the prices of our products and we are unable to offset the
price reductions by increasing our sales volumes, introducing new products with
higher prices or reducing manufacturing costs, our revenues or gross margins
will decline. These competitive pressures may also result in longer sales cycles
and loss of customers.

OUR DEPENDENCE ON A LIMITED NUMBER OF CONTRACT MANUFACTURERS FOR MOST OF OUR
PRODUCTS MAY DIMINISH OUR ABILITY TO CONTROL THE QUALITY AND TIMING OF DELIVERY
OF OUR PRODUCTS.

We have recently transitioned the manufacture of our products from in-house to
three third-party contract manufacturers. There are risks associated with our
dependence on contract manufacturers, including the contract manufacturers'
control of capacity allocation, labor relations, production quality and other
aspects of the manufacturing process. If our contract manufacturers encounter
any of these problems, our manufacturing processes will be adversely affected
and we may lose customers.

Any one of our repeater products is generally produced by only one of our
contract manufacturers. We do not have long-term supply contracts with our
contract manufacturers, and they are not obligated to supply us with products
for any specific period, in any specific quantity or at any specific price,
except as may be provided in a particular purchase order. If we are unable to
obtain our products from our contract manufacturers on schedule, revenues from
the sale of those products may be delayed or lost, and our reputation,
relationships with customers and our business could be harmed. In addition, if
we must replace one of our contract manufacturers, we could incur significant
expenses and experience substantial disruption to our business.

OUR CONTRACT MANUFACTURERS' RELIANCE ON A LIMITED NUMBER OF COMPONENT SUPPLIERS
COULD LEAD TO DELAYS, ADDITIONAL COSTS, PROBLEMS WITH OUR CUSTOMERS AND
POTENTIAL CUSTOMERS AND LOSS OF REVENUES.

Our contract manufacturers currently utilize one or a small number of suppliers
for each of the components of our products. In particular, there is currently
only one supplier of high power amplifiers, a critical component for a Network
Repeater, that meets our quality standards. Our contract manufacturers have no
long-term contracts or arrangements with the suppliers of components for our
products that guarantee the availability of these components. If for any reason
a supplier fails to meet quality or quantity requirements, or stops selling
components at commercially reasonable prices, or if a competitor enters into an
exclusive relationship with one of our suppliers, we could experience
significant production delays or cost increases.

From time to time, our contract manufacturers may be required to replace some of
the components of our products when the supplier of a particular component
discontinues production. While we do not generally maintain an inventory of
components, we may purchase a quantity of these discontinued components to
supply to our contract manufacturers until new suppliers or substitute
components can be found. We face the risk that we may deplete this inventory of
discontinued components before finding adequate substitutes, which could cause
the loss of significant sales opportunities. Alternatively, we may be left with
surplus quantities of these components, which could cause us to incur charges
for excess inventory. We cannot guarantee that alternative sources of components
can be secured on short notice or that components will be available from
alternative sources on satisfactory terms. Any of these problems could damage
relationships with current or prospective customers, seriously harm our
operating results and revenues in a given period and impair our ability to
generate future sales.

DUE TO UNCERTAINTIES IN PRODUCTION FORECASTING, WE MAY EXPERIENCE UNEXPECTED
SURPLUSES OR SHORTAGES OF INVENTORY.

Our contracts with manufacturers require us to provide a rolling six-month
forecast for production each month. The forecast for the first two months of the
six-month forecast are considered firm purchase orders. If we fail to accurately
predict our customers' demand for our products, we may be subject to shortages
of certain products and surpluses of other products. If we fail to have an
adequate supply of inventory for our

6
<PAGE> 10

products, we may be subject to cancellation of orders from our customers for
these products. In addition, if we have a surplus of certain products, we may
incur charges for excess or obsolete inventory.

Some of the components of our products may have lead times of as long as 12 to
20 weeks from the date a purchase order is placed with the supplier to the date
the components are delivered to our contract manufacturers. In order to ensure
an adequate supply of these components, we may be required to purchase the
components ourselves and then resell them to our contract manufacturers to meet
our forecasted requirements. If we fail to accurately predict the demand for
these components, we may face shortages and potentially lose sales, or
alternatively incur charges for excess or obsolete inventory.

OUR INABILITY TO PROVIDE LONG-TERM EQUIPMENT FINANCING FOR OUR CUSTOMERS IS A
COMPETITIVE DISADVANTAGE AND COULD RESULT IN A LOSS OF SALES.

Many of our current and potential customers require equipment financing to
purchase our products. We do not offer long-term equipment financing to our
customers. If we cannot assist in arranging long-term equipment financing for
our customers, we may lose sales and customers to competitors that provide such
financing. Additionally, if we decide to provide our customers with long-term
equipment financing in the future, we could face credit risks, including slow
payments or non-payments from customers.

WE PLAN TO EXPAND FURTHER INTO INTERNATIONAL MARKETS, WHICH WILL SUBJECT US TO
ADDITIONAL BUSINESS RISKS.

A significant portion of our sales efforts has been and will continue to be
targeted to international service providers in Australia, Canada, Mexico, South
America and Asia. Conducting business in these areas subjects us to a number of
risks and uncertainties, including:

- inadequate protection of intellectual property in foreign countries;

- increased difficulty in collecting accounts;

- delays and expenses associated with tariffs and other trade barriers;

- difficulties and costs associated with complying with a wide variety of
complex foreign laws and treaties;

- currency fluctuations, including a decrease in the value of foreign
currencies relative to the U.S. dollar which could make our products
less competitive against those of foreign competitors; and

- political and economic instability.

Any of the factors described above could impair our ability to continue
expanding into international markets and could prevent us from increasing our
revenues and achieving profitability. We expect to establish contract
manufacturing operations in China and Brazil during our fiscal year ending March
2001 which could further subject us to the risks described above, particularly
the difficulty of protecting intellectual property rights.

WE HAVE DEVELOPED A PRODUCT LINE PRIMARILY BASED ON THE CDMA STANDARD AND WE MAY
NOT SUCCEED IF CDMA IS NOT WIDELY ACCEPTED.

We have concentrated our efforts on the development and sale of products
specific to CDMA technology. CDMA is the newest wireless communications
technology standard and has yet to achieve the market penetration of other more
established digital standards, including TDMA and GSM. There are currently a
limited number of wireless service providers utilizing CDMA-based equipment.
These service providers are concentrated in North America, South America and
Asia. If CDMA technology is not widely accepted by wireless service providers,
the demand for our products will not be as large as we are anticipating. A
decline in demand for our current products could have a significant negative
impact on our results of operations. In addition, a decline in demand may
require us to develop new products compatible with other

7
<PAGE> 11

wireless technology standards, which would cause us to experience significant
production delays and cost increases with no assurance of new product
acceptance.

BECAUSE OUR PRODUCTS ARE DEPLOYED IN COMPLEX NETWORKS, THEY MAY HAVE ERRORS OR
DEFECTS THAT WE FIND ONLY AFTER DEPLOYMENT, WHICH IF NOT REMEDIED, COULD HARM
OUR BUSINESS.

Our products are highly complex, designed to be deployed in complicated networks
and may contain undetected defects, errors or failures. Although our products
are tested during manufacturing prior to deployment, they can only be fully
tested when deployed in commercial networks. Consequently, our customers may
discover errors after the products have been deployed. The occurrence of any
defects, errors or failures could result in installation delays, product
returns, diversion of our resources, increased service and warranty costs, legal
actions by our customers, increased insurance costs and other losses to us or to
our customers or end users. Any of these occurrences could also result in the
loss of or delay in market acceptance of our products, which would harm our
business and adversely affect our operating results and financial condition.

WE ARE DEPENDENT ON LICENSED TECHNOLOGY FOR OUR PRODUCTS.

The receive diversity technology contained in our products is licensed from one
of our executive officers. The license agreement requires the timely payment of
royalties in the form of cash and shares of our common stock. These royalty
payments are non-refundable. Failure to honor the terms of the license agreement
could adversely affect our business.

IF WE ARE UNABLE TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS, WE MAY
BE UNABLE TO COMPETE EFFECTIVELY.

We regard substantial elements of our products, such as receive diversity
technology, component design specifications, network management software and
network component optimization techniques, as proprietary and attempt to protect
them by relying on patent, trademark, service mark, copyright and trade secret
laws. We also rely on confidentiality procedures and contractual provisions with
our employees, consultants, vendors and licensees to protect our intellectual
property. Despite these efforts, we may be unable to prevent third parties from
infringing upon or misappropriating our intellectual property, which could harm
our business.

As of March 31, 2000, we had three patents granted and two patent applications
pending. It is possible that no patents will be issued from these two pending
applications or from future patent applications. Moreover, our currently issued
patents and any patents issued in the future may not provide us with any
competitive advantages over, or may be challenged by, third parties.

Effective patent, trademark, service mark, copyright and trade secret protection
may not be available in some countries in which our products are distributed,
particularly countries within South America and Asia. Furthermore, our
competitors may independently develop similar technologies that limit the value
of our intellectual property or design around patents issued to us. See
"Business -- Intellectual Property".

BECAUSE LEGAL STANDARDS RELATING TO THE PROTECTION OF INTELLECTUAL PROPERTY
RIGHTS RELATED TO THE TELECOMMUNICATIONS INDUSTRY ARE UNCERTAIN AND EVOLVING, WE
MAY BE SUBJECT TO INTELLECTUAL PROPERTY RIGHTS DISPUTES, CAUSING US TO INCUR
SIGNIFICANT COSTS, DIVERTING THE TIME AND ATTENTION OF OUR MANAGEMENT AND
PREVENTING US FROM SELLING OUR PRODUCTS.

Due to the competitive nature of the telecommunications industry, particularly
as it relates to CDMA-based technology, any competitive advantage we may have
relies heavily upon protection of our intellectual property rights. Because the
legal standards relating to the validity, enforceability and scope of protection
of intellectual property rights in our industry are uncertain and evolving, in
the future, we may be a party to litigation concerning the intellectual property
incorporated in our products. These lawsuits, regardless of their outcome, would
be time-consuming and expensive to resolve and would divert management time and

8
<PAGE> 12

attention. Any potential intellectual property litigation also could force us to
do one or more of the following:

- stop selling, incorporating or using our products that use the challenged
intellectual property;

- obtain from the owner of the infringed intellectual property right a
license to sell or use the relevant technology, which license may not be
available on reasonable terms, or at all; or

- redesign those products that use the challenged technology.

If we are forced to take any of these actions, our business may be harmed. Our
insurance may not cover potential claims of this type or may not be adequate to
indemnify us for all liability that may be imposed. For more information
concerning our intellectual property rights, see "Business -- Intellectual
Property".

A SIGNIFICANT DECREASE IN THE COST OF BASE STATIONS AND THEIR COMMUNICATION
LINKS WOULD DIMINISH ONE OF OUR COMPETITIVE ADVANTAGES.

Unlike our repeater products, current base stations require an expensive
communications link, usually through a high capacity digital telephone
connection, to the network. In addition, base stations themselves are typically
larger and more expensive than repeaters. A decrease in the cost of base
stations and the communication links used to connect base stations to the local
telephone network, especially in less populated areas, will diminish a cost
saving that our customers experience from using our product. If the cost of base
stations and their communication links decline, demand for our products may
decrease and we may have to lower our product prices or experience a decline in
orders. Either one of these results could cause decreased revenues and margins.

DELAYS IN NEW PRODUCT DEVELOPMENT PROJECTS COULD HARM OUR BUSINESS.

The market for our products is subject to competition from other repeater
manufacturers and base station manufacturers. As a result, we must continue to
develop new products and enhancements to our existing products to remain
competitive. In particular, we must develop and bring to market our in-building
coverage products and our products designed to address third generation or 3G
wireless networks. If we do not successfully develop new products and
enhancements in a timely manner, we may lose market acceptance of our products
and be unable to compete effectively with new competitive products, which could
harm our business.

IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY, OUR BUSINESS AND PROSPECTS COULD BE
SERIOUSLY HARMED.

The challenge of managing our growth will place a significant strain on our
planning and management capabilities. To manage our expected growth of
operations and personnel, we will need to:

- improve financial and operational controls, as well as our reporting
systems and procedures;

- install new management information systems; and

- hire, train, motivate and manage our sales and marketing, engineering,
technical, finance and customer service employees.

If we cannot effectively hire and manage new employees or monitor, manage and
control expanded operations, our business and prospects could be seriously
harmed.

IF WE LOSE KEY ENGINEERING PERSONNEL OR ARE UNABLE TO HIRE ADDITIONAL QUALIFIED
ENGINEERING PERSONNEL, WE MAY NOT BE SUCCESSFUL.

Our future success largely depends on our ability to attract and retain
qualified engineering personnel. The market for qualified engineering personnel
in the telecommunications industry is highly competitive and if we cannot
attract and retain these personnel, it would significantly limit our ability to
compete and to grow our business.

9
<PAGE> 13

WE HAVE ENGAGED IN ACQUISITIONS AND MAY ENGAGE IN FUTURE ACQUISITIONS THAT MAY
SUBJECT US TO VARIOUS OPERATIONAL AND FINANCIAL RISKS.

We have in the past and expect in the future to acquire other businesses or
technologies that complement our products, expand the breadth of our product
offerings, enhance our technical capabilities, help secure critical sources of
supply, or that may otherwise offer growth opportunities. In connection with
acquisitions, we may incur operational and financial risks, including:

- difficulties in combining operations, personnel, technologies or
products;

- unanticipated costs;

- risks associated with entering markets in which we have no or limited
prior experience;

- diversion of management's attention from our core business;

- adverse effects on existing business relationships with suppliers and
customers;

- issuing stock that would dilute our current stockholders' percentage
ownership;

- incurring debt; and

- assumption of liabilities.

IF WE OR OUR KEY SUPPLIERS OR CUSTOMERS FAIL TO BE YEAR 2000 COMPLIANT, WE MAY
INCUR SIGNIFICANT UNEXPECTED EXPENSES, EXPERIENCE BUSINESS INTERRUPTIONS AND
DELAYS, LOSE EXISTING OR POTENTIAL CUSTOMERS AND ORDERS AND EXPERIENCE OTHER
CONSEQUENCES THAT ARE HARMFUL TO OUR BUSINESS.

Even though we have not experienced any significant problems as a result of
entering the year 2000, we may have undiscovered problems in our computerized
management systems or our products that may cause us to incur significant time
and expenditures to correct. Any failure in year 2000 compliance may cause us to
lose customers, incur significant costs and result in reduced revenues and
increased losses, warranty claims and litigation. In addition, if our customers
or suppliers fail to be year 2000 compliant, it could result in interruptions in
supply, failure of our products to operate correctly and delays in order
fulfillment and payment. These potential year 2000-related difficulties could
adversely affect our results of operations.

A NUMBER OF SHARES ARE OR WILL BE ELIGIBLE FOR FUTURE SALE WHICH MAY DEPRESS OUR
STOCK PRICE.

Sales of substantial amounts of our common stock in the public market following
this offering, or the perception that a large number of shares are available for
sale, could cause the market price of our common stock to decline. After this
offering, shares owned by our current stockholders and holders of options and
warrants to acquire our common stock, on a fully diluted basis assuming exercise
of all options and warrants, including our executive officers and directors, are
expected to constitute approximately 82.3% of the outstanding shares of our
common stock, or 80.2% if the underwriters' over-allotment option is exercised
in full. Following the expiration of a 180-day "lock-up" period to which
substantially all of the shares held by our current stockholders will be
subject, the holders whose shares are subject to that lock-up period will in
general be entitled to dispose of their shares. Moreover, U.S. Bancorp Piper
Jaffray Inc. may, in its sole discretion and at any time without notice, release
all or any portion of the securities subject to the lock-up agreements. In
addition to the adverse effect a price decline could have on holders of our
common stock, that decline would likely impede our ability to raise capital
through the issuance of additional shares of our common stock or other equity
securities.

After this offering, the holders of approximately 17,060,745 shares of our
common stock and of warrants exercisable for 250,395 shares of common stock will
have rights, subject to some conditions, to require us to file registration
statements covering their shares, or to include their shares in registration
statements that we may file for ourselves or other stockholders. By exercising
their registration rights and selling a large number of shares, these holders
could cause the price of our common stock to decline. Furthermore, if we

10
<PAGE> 14

were to include in a company-initiated registration statement shares held by
those holders pursuant to the exercise of their registration rights, those sales
could impair our ability to raise needed capital by depressing the price at
which we could sell our common stock.

YOU WILL INCUR IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK VALUE OF OUR COMMON
STOCK THAT YOU PURCHASE IN THIS OFFERING.

The initial public offering price of our common stock is substantially more than
the pro forma net tangible book value per share of our common stock after giving
effect to conversion of all of our convertible preferred stock, convertible
debentures and the exercise of outstanding warrants for 1,069,349 shares. As a
result, holders who purchase our common stock pursuant to this offering will
experience immediate and substantial dilution in the pro forma net tangible book
value per share of our common stock from the initial public offering price. The
pro forma net tangible book value dilution to new investors in this offering
will be $6.86 per share at an initial public offering price of $9.00 per share.
The exercise of options and warrants outstanding after this offering will result
in further dilution to you.

OUR CERTIFICATE OF INCORPORATION AND BYLAWS, AS WELL AS PROVISIONS OF DELAWARE
LAW, COULD DISCOURAGE POTENTIAL ACQUISITIONS OF OUR COMPANY THAT STOCKHOLDERS
MAY CONSIDER FAVORABLE.

Certain provisions of our certificate of incorporation, our bylaws and Delaware
law may discourage, delay or prevent a merger or acquisition that stockholders
may consider favorable. This could have an adverse effect on the market price of
our common stock or prevent our stockholders from realizing a premium over the
market price for their shares of our common stock. See "Description of Capital
Stock" for a discussion of these anti-takeover provisions.

CONTROL BY OUR EXISTING STOCKHOLDERS WILL LIMIT YOUR ABILITY TO INFLUENCE THE
OUTCOME OF MATTERS REQUIRING STOCKHOLDER APPROVAL AND COULD DISCOURAGE POTENTIAL
ACQUISITIONS OF OUR COMPANY BY THIRD PARTIES.

We anticipate that our executive officers, directors and entities affiliated
with them, along with the current holders of more than 5% of our equity, will,
in the aggregate, beneficially own approximately 66% of our outstanding common
stock following the completion of this offering. These stockholders, if acting
together, would be able to exert a significant degree of influence over our
management and affairs and over matters requiring approval by our stockholders,
including the election of our board of directors and the approval of mergers or
other business combination transactions. This concentration of ownership could
have the effect of delaying or preventing a change in our control or otherwise
discourage a potential acquiror from attempting to obtain control of us, which
in turn could have an adverse effect on the market price of our common stock or
prevent our stockholders from realizing a premium over the market price for
their shares of our common stock.

WE MAY APPLY THE PROCEEDS OF THIS OFFERING TO USES THAT DO NOT IMPROVE OUR
OPERATING RESULTS OR MARKET VALUE.

We will have considerable discretion to use the net proceeds of this offering
for our business, and you will not have the opportunity as part of your
investment decision to assess whether the proceeds are being used appropriately.
The net proceeds may be used for corporate purposes that do not improve our
operating results or our market value. Pending application of the net proceeds,
they may be placed in investments that do not produce income or that lose value.
See "Use of Proceeds" for more information on our application of the net
proceeds.

11
<PAGE> 15

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that 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,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"intends," "potential" or "continue" or the negative of such terms or other
comparable terminology. These statements are only predictions. 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. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including the risks outlined in this "Risk Factors" section and elsewhere in
this prospectus.

You should rely only on the information contained in this prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
with different information. This prospectus is not an offer to sell, nor is it
seeking an offer to buy, these securities in any state where the offer or sale
is not permitted. The information in this prospectus is complete and accurate as
of the date on the front cover, but the information may have changed since that
date.

12
<PAGE> 16

USE OF PROCEEDS

Our net proceeds from the sale of the 4,750,000 shares of common stock we are
offering are estimated to be $37,706,500 ($43,670,125 if the underwriters'
over-allotment option is exercised in full), based on the initial public
offering price of $9.00 per share, after deducting the estimated underwriting
discounts and commissions and the estimated offering expenses.

We currently intend to use a portion of the net proceeds from this offering for
expansion of sales, marketing and future development of our products. We
currently intend to use the remaining proceeds for general corporate purposes,
including working capital. Other than estimated capital expenditures of
approximately $3.5 million through the year ending March 31, 2002, we have not
identified specific uses for the net proceeds from this offering.

We may also use a portion of the net proceeds to invest in complementary
businesses, license other technology or make potential acquisitions.

The use of proceeds has not been specifically identified due to the flexible
nature of our planning process. The amounts we actually expend for general
corporate purposes will vary significantly depending on a number of factors,
including revenue growth, if any, and the amount of cash we generate from
operations. As a result, we will retain broad discretion in the allocation and
use of the net proceeds of this offering. Pending the uses described above, we
intend to invest the net proceeds from this offering in short-term, investment
grade, interest bearing securities.

DIVIDEND POLICY

We have never paid or declared dividends on our common stock, and we do not
expect to pay or declare any dividends on our common stock for the foreseeable
future. Any future determination to pay or declare dividends will be at the
discretion of our board of directors and will depend on our financial condition,
results of operations, capital requirements and other factors the board of
directors deems relevant.

13
<PAGE> 17

CAPITALIZATION

The following table sets forth our capitalization at March 31, 2000:

- on an actual basis;

- on a pro forma basis after giving effect to:

- the conversion of all outstanding shares of preferred stock into
10,116,319 shares of common stock upon the closing of this offering;

- the conversion of outstanding Series DD convertible subordinated
debentures into 2,727,263 shares of common stock upon the closing of
this offering;

- the exercise of outstanding warrants for 1,069,349 shares of common
stock having a weighted average exercise price of $2.04 per share,
which will expire if not exercised by 5:00 p.m. on the date of the
closing of this offering; and

- the issuance of $5.1 million of Series EE convertible subordinated
debentures on July 11, 2000 and the conversion of such debentures
into 637,500 shares of common stock upon the closing of this
offering; and

- on a pro forma as adjusted basis, after giving effect to the sale of
4,750,000 shares of common stock offered by us at an initial public
offering price of $9.00 per share after deducting the underwriting
discounts and the estimated offering expenses payable by us.

<TABLE>
<CAPTION>
MARCH 31, 2000
----------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Current portion of notes payable............................ $ 1,232 $ 1,232 $ 1,232
Current portion of capital lease obligations................ 418 418 418
======== ======== ========
Notes payable, net of current portion....................... 3,078 3,078 3,078
Capital lease obligations, net of current portion........... 507 507 507
Convertible subordinated debentures......................... 15,000 -- --
-------- -------- --------
Stockholders' equity:
Convertible preferred stock, $0.001 par value:
Authorized 14,210,077 shares (actual); 5,000,000 shares
(pro forma and pro forma as adjusted); issued and
outstanding 9,874,691 shares (actual); no shares (pro
forma and pro forma as adjusted)...................... 10 -- --
Common stock; $0.001 par value:
Authorized 30,000,000 shares (actual); 70,000,000
shares (pro forma and pro forma as adjusted); issued
and outstanding 3,316,309 shares (actual); 17,866,740
shares (pro forma); 22,616,740 shares (pro forma as
adjusted)............................................. 3 18 23
Additional paid-in capital................................ 54,555 76,831 114,532
Deferred stock-based compensation......................... (10,297) (10,297) (10,297)
Accumulated deficit....................................... (55,875) (55,875) (55,875)
-------- -------- --------
Total stockholders' equity (deficit)................... (11,604) 10,677 48,383
-------- -------- --------
Total capitalization.............................. $ 8,631 $ 15,912 $ 53,618
======== ======== ========
</TABLE>

Common stock excludes:

- 3,914,886 shares of common stock issuable upon the exercise of options
outstanding as of June 30, 2000 at a weighted average exercise price of
$4.08 per share; and

- 250,395 shares of common stock issuable upon exercise of warrants,
including 127,500 shares issuable upon the exercise of warrants issued
on July 11, 2000, at a weighted average exercise price of $6.55 per
share.

Between March 31, 2000 and June 30, 2000, there were grants of stock options to
purchase 476,350 shares, exercises of stock options to purchase 49,210 shares,
cancellations of options to purchase 47,060 shares and exercises of warrants to
purchase 8,643 shares.

In addition to the shares of common stock to be outstanding after this offering,
we may issue additional shares under our stock option plans.

14
<PAGE> 18

DILUTION

Our pro forma net tangible book value as of March 31, 2000 was $10.6 million or
approximately $0.60 per share, assuming:

- the conversion of all outstanding shares of our convertible preferred
stock into 10,116,319 shares of common stock upon the closing of this
offering;

- the conversion of our outstanding convertible subordinated debentures
into 3,364,763 shares of common stock upon the closing of this offering,
including the Series EE convertible subordinated debentures issued on
July 11, 2000;

- the exercise of outstanding warrants for 1,069,349 shares of common
stock, having a weighted average price of $2.04 per share, which will
expire if not exercised by 5:00 p.m. on the date of closing of this
offering; and

- the issuance of $5.1 million of Series EE convertible subordinated
debentures on July 11, 2000 and the conversion of such debentures into
637,500 shares of common stock upon the closing of this offering.

Pro forma net tangible book value per share is determined by dividing the pro
forma number of outstanding shares of our common stock into our pro forma net
tangible book value, which is our total tangible assets less total liabilities.
After giving effect to the receipt of the estimated net proceeds from this
offering, based upon an initial public offering price of $9.00 per share and
after deducting the estimated underwriting discounts and commissions and our
estimated offering expenses, our pro forma net tangible book value as of March
31, 2000 would have been approximately $48.4 million, or $2.14 per share. This
represents an immediate increase in pro forma net tangible book value of $1.54
per share to existing stockholders and an immediate dilution in net tangible
book value of $6.86 per share to new investors purchasing shares at the initial
public offering price. The following table illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share..................... $9.00
Pro forma net tangible book value per share as of March
31, 2000............................................... $0.60
Increase in pro forma net tangible book value per share
attributable to
new investors.......................................... 1.54
-----
Pro forma net tangible book value per share after this
offering.................................................. 2.14
-----
Dilution in pro forma net tangible book value per share to
new investors............................................. $6.86
=====
</TABLE>

The following table sets forth on a pro forma basis as of March 31, 2000, the
number of shares of common stock purchased from us, the total consideration paid
and the average price per share paid by existing and new stockholders, before
deducting underwriting discounts and commissions and offering expenses payable
by us in connection with this offering.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- ------------------------ PRICE PAID
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- -------------- ------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Existing stockholders................................. 17,866,740 79.0% $ 67,643 61.3% $3.79
New stockholders...................................... 4,750,000 21.0 42,750 38.7 $9.00
---------- ----- -------- -----
Total....................................... 22,616,740 100.0% $105,293 100.0%
========== ===== ======== =====
</TABLE>

The foregoing discussion and table assumes no exercise of any stock options
outstanding or warrants outstanding to purchase a total of 250,395 shares of our
common stock, including 127,500 shares issuable upon the exercise of warrants
issued on July 11, 2000, at a weighted average price of $6.55 per share. As of
June 30, 2000, there were options outstanding to purchase a total of 3,914,886
shares of our common stock at a weighted average exercise price of $4.08 per
share. From March 31, 2000 through June 30, 2000, we granted options to purchase
476,350 shares of our common stock under our incentive stock plans, options to
purchase 49,210 shares have been exercised, options to purchase 47,060 shares
have been cancelled and warrants to purchase 8,643 shares have been exercised.
To the extent that any options or warrants outstanding after the closing of this
offering are exercised, there may be further dilution to new public investors.
See "Capitalization," "Management -- Employee Benefit Plans," "Description of
Capital Stock," and notes 5, 10 and 12 of the notes to our financial statements.

15
<PAGE> 19

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected financial data should be read together with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements, including the related notes found
elsewhere in this prospectus. The consolidated statement of operations data for
the fiscal years ended March 27, 1998, March 26, 1999 and March 31, 2000 and the
consolidated balance sheet data as of March 26, 1999 and March 31, 2000 are
derived from the audited consolidated financial statements of Repeater
Technologies, Inc. included elsewhere in this prospectus, which have been
audited by PricewaterhouseCoopers LLP, independent accountants. The consolidated
statement of operations data for the fiscal year ended March 31, 1996 and the
consolidated balance sheet data as of March 31, 1996 and March 31, 1997 are
derived from unaudited consolidated financial statements not included in this
prospectus. The consolidated statement of operations data for the year ended
March 31, 1997 and the consolidated balance sheet data as of March 27, 1998 have
been derived from audited consolidated financial statements not included in this
prospectus. Our fiscal year ends on the last Friday in March.

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------
MARCH 31, MARCH 31, MARCH 27, MARCH 26, MARCH 31,
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenues................................. $ 10,302 $10,581 $ 7,770 $ 9,612 $ 16,953
Cost of revenues............................. 9,570 9,355 8,807 8,883 12,145
-------- ------- -------- -------- --------
Gross profit (loss).......................... 732 1,226 (1,037) 729 4,808
-------- ------- -------- -------- --------
Operating expenses:
Research and development................... 2,628 3,135 6,214 4,258 7,349
Sales and marketing........................ 2,770 2,829 3,936 4,514 7,075
General and administrative................. 1,142 1,199 1,520 2,227 2,997
In-process research and development........ -- -- -- -- 885
-------- ------- -------- -------- --------
Total operating expenses........... 6,540 7,163 11,670 10,999 18,306
-------- ------- -------- -------- --------
Loss from operations......................... (5,808) (5,937) (12,707) (10,270) (13,498)
Other income (expense), net.................. (8) (36) 79 (300) (1,542)
-------- ------- -------- -------- --------
Net loss..................................... $ (5,816) $(5,973) $(12,628) $(10,570) $(15,040)
======== ======= ======== ======== ========
Net loss per common share -- basic and
diluted.................................... $(153.05) $ (3.16) $ (5.31) $ (4.47) $ (6.00)
======== ======= ======== ======== ========
Shares used in net loss per common share
calculation -- basic and diluted........... 38 1,893 2,376 2,367 2,508
======== ======= ======== ======== ========
Pro forma net loss per common share -- basic
and diluted (unaudited).................... $ (0.98)
========
Shares used in pro forma net loss per common
share calculation -- basic and diluted
(unaudited)................................ 15,352
========
</TABLE>

<TABLE>
<CAPTION>
AS OF
---------------------------------------------------------
MARCH 31, MARCH 31, MARCH 27, MARCH 26, MARCH 31,
1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents..................... $ 577 $ 4,966 $ 8,102 $10,358 $ 4,823
Working capital............................... 3,113 5,712 7,356 11,579 4,641
Total assets.................................. 6,941 12,242 13,787 17,202 16,217
Long-term obligations......................... 131 323 665 501 3,585
Convertible subordinated debentures........... -- -- -- 15,000 15,000
Total stockholders' equity (deficit).......... 4,037 7,014 8,639 (1,643) (11,604)
</TABLE>

16
<PAGE> 20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with
"Selected Consolidated Financial Data" and our consolidated financial statements
and notes included elsewhere in this prospectus. References to years ended or
years ending refer to our fiscal year.

OVERVIEW

We develop, market and sell wireless network equipment primarily for CDMA-based
wireless communications networks. We provide cost-effective, high-quality
products for use in suburban and rural areas, urban areas and inside office
buildings and other coverage-limited structures. Our products have been deployed
with over 40 CDMA wireless service providers in ten countries. International
sales accounted for approximately 61.5%, 41.8% and 40.7% of net revenues for the
years ended March 27, 1998, March 26, 1999 and March 31, 2000, respectively.

From our inception in 1983 through our year ended March 31, 1996, we were
primarily focused on providing microwave frequency repeaters for long-distance
telecommunications applications and cellular repeaters for non-CDMA based
wireless communications applications.

Starting in our year ended March 31, 1997, we changed our strategic focus and
re-directed our resources to the development and marketing of repeaters for
wireless networks based on the CDMA digital standard. This wireless standard
offered us the opportunity to develop a new type of repeater, which we call our
Network Repeater, that in conjunction with CDMA base stations, enables wireless
service providers to deploy or extend CDMA wireless networks in non-urban areas
at a significantly reduced cost. CDMA technology is not as widely deployed, and
the customer base for CDMA-based products is not as broad, as compared to other
digital standards. Our Network Repeaters, along with the associated network
management system, are designed specifically to operate as an integrated network
element within a CDMA wireless network, extending the coverage area of a CDMA
base station without compromising the quality of the wireless service. We have
licensed a portion of the technology for our CDMA-based repeaters from one of
our executives. Our ability to continue to deploy our existing products and to
develop new products depends significantly upon this license. We shipped our
first Network Repeaters for CDMA wireless networks in May 1997. We have deployed
over 1,100 Network Repeaters with over 40 wireless service providers and 20
RepeaterHybrid Networks with 12 wireless service providers.

During the year ended March 31, 2000, we completed our transition from
manufacturing our products ourselves to having third-parties manufacture our
products for us. We believe that by contracting with third-party manufacturers,
we will benefit from their greater buying power and obtain more favorable
component pricing and also benefit from lower overhead costs. We also believe
that third-party manufacturers can better accommodate changes in volumes,
allowing for a more rapid increase in manufacturing capacity than we could
accomplish on our own. While we expect to realize significant cost savings from
outsourcing our manufacturing, we will also face significant risks. These risks
include reduced ability to control the manufacturing and production quality
processes, the risk that we may be unable to procure products because our
competitors have entered into exclusive relationships with key suppliers, the
risk associated with a requirement to commit to minimum purchases, increased
risk of excess inventory due to customer demand uncertainties and a dependence
on a small number of suppliers.

In November 1999, we acquired substantially all of the assets and assumed
substantially all of the liabilities of The Gwydion Company LLC for a
combination of $0.8 million in cash and 573,334 shares of our common stock. We
accounted for this transaction using the purchase method of accounting. The
shares we issued will be held in escrow for up to 18 months until certain
performance criteria are met. This contingent consideration has been accounted
for as a compensatory arrangement. As part of this acquisition, we have acquired
Gwydion's distributed antenna system project which is designed to provide
in-building coverage via a fiber optic antenna system. At the time of the
acquisition, this project was

17
<PAGE> 21

estimated to be 75% complete, however, significant portions of the more complex
development tasks remained incomplete.

Due to the fact that the majority of the more complex development tasks remained
unfinished, there was a high degree of uncertainty and risk associated with
completing the development project on a timely basis, or at all. In addition to
technical risks, regulatory agency approvals had not been obtained. We will be
unable meet our revenue projections if we cannot successfully complete the
development tasks or obtain the required regulatory approvals for this project.
The expected completion date has been extended to reflect the incorporation of
additional features into this product and to enhance its compatibility with our
Repeater Hybrid Network.

NET REVENUES. Our net revenues are derived primarily from products based on the
CDMA standard, our Network Repeaters. In addition, we sell complementary
equipment for these products, including battery back up systems, antennas and
network management software. We also provide training, installation support,
design and implementation services to our customers on a fee for service basis.

Revenues for products and complementary equipment is recognized upon shipment or
delivery to the customer, depending upon the terms of the sale, where there is a
purchase order or a sales agreement and collectibility of the resulting
receivable is probable. Where a purchase order or a sales agreement contains a
customer acceptance clause, we defer any recognition of revenue until the
acceptance criteria has been met. Revenues for training, installation support,
design and implementation services are recognized when these services are
performed. When warranty and post-contract customer support obligations exist
beyond one year, the related revenue is deferred and is recognized ratably over
the term of the arrangement. As noted in our comparative results discussion, our
customer base has been and may continue to be concentrated with a small number
of customers. In the past, we have publicly announced purchase agreements with
estimated values through November 2002 of approximately $68 million. To date, we
have only recognized revenues of $2.5 million under these agreements. These
purchase agreements have no required minimum purchase amounts and can be
terminated without penalty. Accordingly, any estimates of total value of these
contracts are speculative.

We have experienced downward pressure on our selling prices as a result of our
entering into volume sale agreements with some customers and from general
competitive pressures. We expect that our selling prices will continue to
decline for the foreseeable future. In addition, if we cannot offset declines in
selling prices by an increase in the number of units sold, our revenues may
decline.

We have experienced and expect to continue to experience significant
fluctuations in our quarterly net revenues as a result of our long and variable
sales cycle. Historically, our sales cycle, which is the period from the time a
sales lead is generated until the recognition of revenue from that lead, has
averaged nine to 24 months. The variability and length of our sales cycle is
influenced by a number of factors, including:

- our customers' deployment schedules;

- our customers' access to financing for the purchase of our products;

- the need to design networks to incorporate our products;

- the need to demonstrate our products before purchase;

- the manufacturing lead times for our products; and

- our inventory levels for the specific product configuration ordered by
our customers.

If we fail to significantly increase our sales of Network Repeaters and the
deployment of RepeaterHybrid Networks or to broaden our customer base, we may
fail to generate sufficient revenues to sustain our business.

COST OF REVENUES. Our cost of revenues consists of the costs of the various
components used to assemble our products, the third-party charges to assemble
and test the products, the overhead cost of the operations

18
<PAGE> 22

departments, the direct costs of network design services we sell to our
customers and the cost of providing customer service, including warranty and
repair charges. Our components are currently obtained from a small number of
suppliers and contract manufacturers. A few of these suppliers are either
single-source or sole-source suppliers, which could limit our ability to achieve
lower prices from these suppliers and could lead to delays and interruption in
supply.

GROSS PROFIT. Our gross profit is affected by the level of demand for our
products and services, new product introductions by us and our competitors, and
from competitive pressures and the costs of the various components and
production services provided by our vendors. If we are unable to offset our
expected decline in selling prices with lower unit costs, our gross profits may
decline. Additionally, as part of volume and other sales agreements, we sell our
products at a reduced margin to certain customers. If sales to these customers
represent an increased portion of sales in any quarter, we may experience a
reduction in our gross margins.

OPERATING EXPENSES. Research and development expenses consist primarily of
expenses incurred in the design and development of our products and our
proprietary technology. These expenses include the salaries and associated
overhead expenditures for our engineers and technicians, materials for the
production of prototypes and expenses for various consultants. We acquired
substantially all of the assets and assumed substantially all of the liabilities
of The Gwydion Company LLC in November 1999. As a result of this acquisition, we
expect our research and product development expenses in connection with our
in-building product to increase. Furthermore, we expect research and product
development expenses to increase as we continue to develop our technology and
broaden our product line to serve new markets and applications. In particular,
we expect to incur significant expenses in the development of our next
generation of products to serve the emerging high-speed wireless markets.

Sales and marketing expenses consist primarily of salaries, commissions,
consulting fees, trade show expenses, travel expenses, advertising, direct
marketing expenses and associated overhead expenses. We intend to increase our
expenditures for sales and marketing. We plan to increase our direct sales and
sales support personnel in the U.S. and internationally and our marketing
personnel, advertising and other marketing programs. In particular, we plan on
increasing our expenditures related to promoting and selling our products for
in-building coverage.

General and administrative expenses consist primarily of expenses for finance,
corporate management, general office administration, insurance, legal,
accounting, amortization of goodwill and other professional fees. We expect that
general and administrative expenses will increase as our business grows and we
expand our staff, increase our infrastructure and incur costs associated with
being a public company.

In connection with the acquisition of Gwydion we recorded an in-process
technology charge of $0.9 million for the year ended March 31, 2000. An
independent appraisal was performed to determine the fair value of the
identifiable assets, including the portion of the purchase price attributed to
the acquired in-process technology. The income approach was used to value
acquired in-process technology, which includes an analysis of the completion
costs, cash flows, other required assets and risks associated with achieving
such cash flows. Revenues are estimated to grow during the first four years and
this growth is expected to decline during the last three years of the expected
life of the technology. Gross margins and operating expense ratios are estimated
to be stable with a slight decline after the fourth year. The present value of
these cash flows are then calculated with a discount rate of 30%. At the date of
acquisition, we determined the technological feasibility of Gwydion's product
was not established, and accordingly wrote off the corresponding amount to
acquired in-process technology. Gwydion is expected to introduce the final
product by August 2000. Approximately $1.6 million in research and development
had been spent up to the date of the acquisition in an effort to develop the
technology to produce a commercially viable product. The future research and
development expense associated with the acquired in-process product was
estimated to be approximately $0.9 million between November 1999 and August
2000, excluding stock-based compensation. Currently we know of no developments
which would lead us to change our original

19
<PAGE> 23

assessment of the commercial viability of this project. At the date of
acquisition, the only identifiable intangible assets acquired were the
technology under development and the acquired workforce.

In connection with the acquisition of Gwydion, we issued 573,334 shares subject
to our right of repurchase until certain performance criteria are met. In
connection with this contingent consideration, we recognized a research and
development expense of $1.9 million during the year ended March 31, 2000.
Assuming a fair value for our common stock of $12.00 per share and assuming
achievement of performance criteria, the compensation expense will be as
follows: $4.6 million for the year ending March 31, 2001 and $0.4 million for
the year ending March 31, 2002.

Stock-based compensation consists of the difference between the deemed fair
market value of stock options and the exercise price of these grants. This
difference is being amortized over the vesting period of the grants, generally
four years. For the years ended March 26, 1999 and March 31, 2000, we recorded
$0.3 million and $2.5 million, respectively, of stock-based compensation expense
in connection with options granted to employees and consultants. The portion
included in operating expenses were $0.3 million and $1.9 million, respectively.
Assuming all employees with outstanding options remain employed by us through
the vesting period, the total unearned stock-based compensation recorded for all
option grants through March 31, 2000 will be amortized as follows: $2.9 million
for the year ending March 31, 2001; $1.5 million for the year ending March 31,
2002, $0.7 million for the year ending March 31, 2003 and $0.2 million
thereafter. During the quarter ended June 30, 2000, we granted incentive and
nonstatutory stock options below deemed fair market value and we will record
$0.8 million in unearned stock-based compensation in relation to these grants,
which will be amortized over their vesting period.

LOSS FROM OPERATIONS. We have incurred substantial losses since our inception
and, as of March 31, 2000, had an accumulated deficit of approximately $55.9
million. We expect to continue to incur substantial operating losses and we may
never achieve or sustain profitability.

During our past three fiscal years, we have not achieved profitability on a
quarterly or annual basis. Because we need to continue to invest significant
financial resources into expanding our sales and marketing efforts, developing
our products and new technology and hiring the necessary personnel to support
our anticipated growth, we expect to continue to incur losses at least through
the fiscal year ended March 31, 2001. We will need to generate significantly
higher revenues in order to support expected increases in operating expenses and
to achieve and maintain profitability.

Other income and (expense), net consists primarily of interest income earned on
balances held in our interest bearing accounts, offset by interest expense on
the convertible subordinated debentures and promissory notes. Upon the closing
of this offering, we expect that interest income will increase due to higher
balances in our interest-bearing accounts and that interest expense will decline
as a result of the conversion of the convertible subordinated debentures into
shares of common stock.

RECENT DEVELOPMENTS. For the quarter ended June 30, 2000, we expect to recognize
net revenues of approximately $7.4 million, gross profits of $2.3 million, or
31.8% of net revenues, operating expenses of $5.5 million and a net loss of $3.7
million. We have not completed the review of our financial results for this
quarter with our independent accountants and these results are subject to
change.

20
<PAGE> 24

RESULTS OF OPERATIONS

The following table sets forth certain operating data as a percentage of net
revenues for the periods indicated:

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net revenues................................................ 100.0% 100.0% 100.0%
Cost of revenues............................................ 113.3 92.4 71.6
------ ------ -----
Gross margin................................................ (13.3) 7.6 28.4
------ ------ -----
Operating expenses:
Research and development.................................. 80.0 44.3 43.4
Sales and marketing....................................... 50.7 47.0 41.7
General and administrative................................ 19.5 23.1 17.7
In-process research and development....................... -- -- 5.2
------ ------ -----
Total operating expenses.......................... 150.2 114.4 108.0
------ ------ -----
Loss from operations........................................ (163.5) (106.8) (79.6)
Other income (expense), net................................. 1.0 (3.1) (9.1)
------ ------ -----
Net loss.................................................... (162.5)% (109.9)% (88.7)%
====== ====== =====
</TABLE>

YEAR ENDED MARCH 26, 1999 COMPARED TO YEAR ENDED MARCH 31, 2000

NET REVENUES. Net revenues increased $7.3 million, or 76.4%, from $9.6 million
for the year ended March 26, 1999 to $16.9 million for the year ended March 31,
2000. This increase was primarily due to increased shipments of our CDMA-based
repeaters to new and existing customers. During the year ended March 31, 2000,
approximately 69.7% of our net revenues were derived from ten customers with
sales to three customers, PrimeCo, Wireless Facilities, Inc. and Clearnet PCS,
comprising 13.6%, 12.4% and 10.2%, respectively. During the year ended March 26,
1999, 50.0% of our net revenues were derived from ten customers. International
sales accounted for 40.7% of net revenues during the year ended March 31, 2000
and 41.8% for the year ended March 26, 1999. Because of an anticipated increase
in demand for our products in Australia, Brazil and Mexico, we expect that
international sales will represent a larger percentage of our net revenues in
the future. There can be no assurance that this anticipated increase in demand
will materialize, or that we will be able to fulfill the demand.

COST OF REVENUES AND GROSS MARGIN. Cost of revenues increased $3.2 million, or
36.7%, from $8.9 million for the year ended March 26, 1999 to $12.1 million for
the year ended March 31, 2000. Of this increase, $0.5 million was attributable
to stock-based compensation and the remainder was primarily due to increased
unit sales. The gross profit margin improved to 28.4% for the year ended March
31, 2000 from 7.6% for the year ended March 26, 1999. Of this 20.8% improvement
in gross profit margin, approximately one-sixth or 3.5% was attributable to the
outsourcing of product manufacturing during the period and the remainder to
overhead costs being spread over a larger revenue base associated with the
increase in net revenues.

RESEARCH AND DEVELOPMENT. Research and development expenses increased $3.1
million, or 72.6%, from $4.3 million for the year ended March 26, 1999 to $7.3
million for the year ended March 31, 2000. This increase was primarily due to
the amortization of $0.8 million of stock-based compensation derived from grants
of incentive stock options below the deemed fair market value and from the
amortization of $1.9 million of stock-based compensation attributable to the
acquisition of substantially all of the assets of Gwydion. We anticipate that
our research and development expenses will continue to increase for the
foreseeable future.

21
<PAGE> 25

SALES AND MARKETING. Sales and marketing expenses increased $2.6 million, or
56.7%, from $4.5 million for the year ended March 26, 1999 to $7.1 million for
the year ended March 31, 2000. This increase was primarily attributable to the
additional sales personnel we hired to support our international and domestic
sales efforts and the amortization of $0.5 million of stock-based compensation
during the year ended March 31, 2000. We hired three additional sales employees
during the year ended March 31, 2000. We expect to continue to increase our
sales and marketing employee headcount for the next twelve months.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased $0.8
million, or 34.6%, from $2.2 million for the year ended March 26, 1999 to $3.0
million for the year ended March 31, 2000. Of this increase $0.3 million was due
to expenses related to year 2000 compliance and the balance was due to the
amortization of stock-based compensation.

IN-PROCESS RESEARCH AND DEVELOPMENT. In-process research and development expense
was $0.9 million for the year ended March 31, 2000, which related to the
acquisition of all of the assets of The Gwydion Company LLC.

OTHER INCOME (EXPENSE). Other income was $0.3 million and $0.4 million for the
years ended March 26, 1999 and March 31, 2000, respectively. Other expenses
increased $1.3 million from $0.6 million for the year ended March 26, 1999 to
$1.9 million for the year ended March 31, 2000. This increase was primarily
attributable to the increased level of borrowings during the year ended March
31, 2000, including $15.0 million of Series DD convertible subordinated
debentures and $5.0 million of notes payable.

YEAR ENDED MARCH 27, 1998 COMPARED TO YEAR ENDED MARCH 26, 1999

NET REVENUES. Net revenues increased $1.8 million, or 23.7%, from $7.8 million
for the year ended March 27, 1998 to $9.6 million for the year ended March 26,
1999. This increase was primarily due to increased unit sales of our CDMA
repeaters to new and existing customers. During the year ended March 26, 1999,
approximately 50.0% of our net revenues were derived from ten customers with
sales to Clearnet PCS comprising 10.0%. International sales accounted for 41.8%
of net revenues during the year ended March 26, 1999. During the year ended
March 27, 1998, 69.9% of our net revenues were derived from ten customers with
sales to two customers, Eriline Telecom and Telus, comprising 18.4% and 14.9%,
respectively. International sales accounted for 61.5% of net revenues during the
year ended March 27, 1998.

COST OF REVENUES AND GROSS MARGIN. Cost of revenues increased $0.1 million, or
0.9%, from $8.8 million for the year ended March 27, 1998 to $8.9 million for
the year ended March 26, 1999. The increase in costs associated with the
increase in the number of units shipped was offset in part by a 19.4% decrease
in direct product costs per unit. The gross profit margin improved to 7.6% for
the year ended March 26, 1999 from a loss of 13.3% for the year ended March 27,
1998. The improvement in gross profit margin was attributable to reduced
overhead costs as a percentage of net revenues associated with the increase in
unit shipments for the period and the reduction in direct product costs per
unit.

We were able to reduce our direct product costs per unit by realizing reduced
component costs due to increases in purchased volumes of these components to
support the increase in the number of units shipped during the year ended March
26, 1999. In addition, increases in units shipped did not result in a
corresponding increase in manufacturing overhead. Therefore, the percentage of
manufacturing overhead attributable to each unit declined as a percentage of the
unit selling price.

RESEARCH AND DEVELOPMENT. Research and development expenses decreased $1.9
million, or 31.5%, from $6.2 million for the year ended March 27, 1998 to $4.3
million for the year ended March 26, 1999. This decrease was primarily
attributed to the cancellation of development projects focused on non-
CDMA-based products.

SALES AND MARKETING. Sales and marketing expenses increased $0.6 million, or
14.7%, from $3.9 million for the year ended March 27, 1998 to $4.5 million for
the year ended March 26, 1999. This increase was

22
<PAGE> 26

primarily attributable to sales referral expenses to third parties pursuant to a
sales referral agreement with a third party. This agreement was entered into
during the June quarter of 1998.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased $0.7
million, or 46.5%, from $1.5 million for the year ended March 27, 1998 to $2.2
million for the year ended March 26, 1999. This increase was primarily due to
$0.5 million of expenses related to the hiring of additional personnel, $0.1
million of stock-based compensation and $0.1 million in legal fees associated
with contracts.

OTHER INCOME (EXPENSE). Other income was $0.2 million and $0.3 million for the
years ended March 27, 1998 and March 26, 1999, respectively. This increase was
primarily attributable to higher balances in our interest bearing accounts.
Other expenses increased $0.4 million, or 200%, from $0.2 million for the year
ended March 27, 1998 to $0.6 million for the year ended March 26, 1999. This
increase was primarily attributable to interest expense on the Series DD
convertible subordinated debentures.

QUARTERLY RESULTS

The following table sets forth unaudited quarterly financial data for the eight
quarters ended March 31, 2000, and such information expressed as a percentage of
our net revenues. This unaudited quarterly information has been prepared on the
same basis as the audited financial information presented elsewhere herein and,
in our opinion, includes all adjustments, consisting only of normal recurring
adjustments, that we consider necessary for a fair presentation of the
information for the quarters presented.

Our net revenues declined from the quarter ended June 26, 1998 as compared to
the quarter ended March 26, 1999. This decrease was attributable to the product
line transition away from our old product lines to our focus on our new
CDMA-based products. The increase in revenues during the quarters ended June 25,
1999, September 24, 1999, December 24, 1999 and March 31, 2000 is attributable
to increased unit volumes of our CDMA-based products sold to our existing
customers and new customers. In addition, the market for wireless communications
infrastructure has been, and we believe will continue to be, seasonal in nature.
During the months of December, January and February, demand for wireless
equipment infrastructure from wireless service providers in the northern
hemisphere tends to decline due to generally poor weather conditions.
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------
JUNE 26, SEPTEMBER 25, DECEMBER 25, MARCH 26, JUNE 25, SEPTEMBER 24,
1998 1998 1998 1999 1999 1999
-------- ------------- ------------ --------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues................ $ 3,032 $ 2,497 $ 2,159 $ 1,924 $ 3,003 $ 4,026
Cost of revenues............ 2,475 2,292 2,234 1,882 2,203 3,010
------- ------- ------- ------- ------- -------
Gross profit (loss)......... 557 205 (75) 42 800 1,016
------- ------- ------- ------- ------- -------
Operating expenses:
Research and
development............. 1,148 1,093 930 1,087 1,062 999
Sales and marketing....... 907 1,190 1,158 1,259 1,322 1,527
General and
administrative.......... 460 580 614 573 490 769
In-process research and
development............. -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total operating
expenses.......... 2,515 2,863 2,702 2,919 2,874 3,295
------- ------- ------- ------- ------- -------
Loss from operations........ (1,958) (2,658) (2,777) (2,877) (2,074) (2,279)
Other income (expense),
net....................... 36 (7) 17 (346) (245) (407)
------- ------- ------- ------- ------- -------
Net loss.................... $(1,922) $(2,665) $(2,760) $(3,223) $(2,319) $(2,686)
======= ======= ======= ======= ======= =======

<CAPTION>
QUARTER ENDED
------------------------
DECEMBER 24, MARCH 31,
1999 2000
------------ ---------
(IN THOUSANDS)
<S> <C> <C>
Net revenues................ $ 4,911 $ 5,013
Cost of revenues............ 3,303 3,629
------- -------
Gross profit (loss)......... 1,608 1,384
------- -------
Operating expenses:
Research and
development............. 2,174 3,114
Sales and marketing....... 1,899 2,327
General and
administrative.......... 732 1,006
In-process research and
development............. 885 --
------- -------
Total operating
expenses.......... 5,690 6,447
------- -------
Loss from operations........ (4,082) (5,063)
Other income (expense),
net....................... (452) (438)
------- -------
Net loss.................... $(4,534) $(5,501)
======= =======
</TABLE>

23
<PAGE> 27
<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------------------------
JUNE 26, SEPTEMBER 25, DECEMBER 25, MARCH 26, JUNE 25,
1998 1998 1998 1999 1999
-------- ------------- ------------ --------- --------
(AS A PERCENTAGE OF NET REVENUES)
<S> <C> <C> <C> <C> <C>
Net revenues................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues............ 81.6 91.8 103.5 97.8 73.4
------- ------- ------- ------- -------
Gross margin................ 18.4 8.2 (3.5) 2.2 26.6
------- ------- ------- ------- -------
Operating expenses:
Research and
development............. 37.9 43.8 43.1 56.5 35.4
Sales and marketing....... 29.9 47.7 53.6 65.4 44.0
General and
administrative.......... 15.1 23.2 28.4 29.8 16.3
In-process research and
development............. -- -- -- -- --
------- ------- ------- ------- -------
Total operating
expenses.......... 82.9 114.7 125.1 151.7 95.7
------- ------- ------- ------- -------
Loss from operations........ (64.5) (106.4) (128.6) (149.5) (69.1)
Other income (expense),
net....................... 1.2 (0.3) 0.8 (18.0) (8.1)
------- ------- ------- ------- -------
Net loss.................... (63.3)% (106.7)% (127.8)% (167.5)% (77.2)%
======= ======= ======= ======= =======

<CAPTION>
QUARTER ENDED
----------------------------------------
SEPTEMBER 24, DECEMBER 24, MARCH 31,
1999 1999 2000
------------- ------------ ---------
(AS A PERCENTAGE OF NET REVENUES)
<S> <C> <C> <C>
Net revenues................ 100.0% 100.0% 100.0%
Cost of revenues............ 74.8 67.3 72.4
------- ------- -------
Gross margin................ 25.2 32.7 27.6
------- ------- -------
Operating expenses:
Research and
development............. 24.8 44.3 62.1
Sales and marketing....... 37.9 38.6 46.4
General and
administrative.......... 19.1 14.9 20.1
In-process research and
development............. -- 18.0 --
------- ------- -------
Total operating
expenses.......... 81.8 115.8 128.6
------- ------- -------
Loss from operations........ (56.6) (83.1) (101.0)
Other income (expense),
net....................... (10.1) (9.2) (8.7)
------- ------- -------
Net loss.................... (66.7)% (92.3)% (109.7)%
======= ======= =======
</TABLE>

We have experienced and expect to continue to experience significant
fluctuations in quarterly operating results as a result of many factors. We
believe that period-to-period comparisons of our operating results should not be
relied upon as any indication of future performance.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through the
private sales of equity and convertible debentures, which have provided
aggregate net proceeds of $60.3 million through March 31, 2000. On July 11, 2000
we sold an additional $5.1 million of convertible subordinated debentures. In
addition, we have borrowed $5.0 million through promissory notes, due in monthly
installments through August 2002, and $2.1 million against equipment lease lines
that mature through 2003. At March 31, 2000 we had $4.8 million in cash and cash
equivalents. The convertible debentures bear interest at an annual rate of 8.0%,
payable quarterly in cash and will convert into common stock upon the closing of
this offering. The $5.0 million principal amount of promissory notes bear
interest at an annual rate of 13.6% and are secured by substantially all of our
assets. We were in breach of some of the covenants of the promissory notes at
March 31, 2000 due to the acquisition of substantially all of the assets and the
assumption of substantially all of the liabilities of Gwydion. As a result, the
lender had the right to declare the notes immediately due and payable. In
addition, as a result of our reincorporation in Delaware and the closing of this
offering without the consent or waiver of the lender, we were or would be in
breach of other covenants related to mergers, acquisitions and changes in
capital structure. We asked for and received a waiver from the lender of the
existing breach and the prospective breaches of the covenants to the promissory
notes. We are in compliance with the covenants under our capital leases. We have
no additional credit facilities.

Cash used in operating activities was $9.9 million, $10.9 million and $8.5
million for the years ended March 27, 1998, March 26, 1999 and March 31, 2000,
respectively. The significant use of cash in operating activities resulted from
our net losses during all reported periods together with the increase in our
accounts receivable during the fiscal year ended March 31, 2000 due to the
increase in product sales to our customers. As sales increase, we have a
corresponding requirement to increase our investment in working capital. At
March 31, 2000 our accounts receivable balance was approximately $4.4 million.

Cash used for investing activities of $0.1 million, $0.6 million and $1.3
million for the years ended March 27, 1998, March 26, 1999 and March 31, 2000,
respectively, was primarily used for capital expenditures and acquisition of
Gwydion. These capital expenditures were primarily investments in computerized
test equipment to test our products and additional computer equipment to support
our business.

24
<PAGE> 28

Our capital expenditures are expected to be approximately $1.5 million and $2.0
million for our years ending March 2001 and 2002, respectively, for product
testing equipment and additional computer equipment. In addition, from time to
time, we may replace aging or obsolete computer equipment.

Net cash provided from financing activities was $13.1 million for the year ended
March 27, 1998, $13.7 million for the year ended March 26, 1999 and $4.2 million
for the year ended March 31, 2000.

We believe that our available cash reserves, combined with the net proceeds of
this offering, will be sufficient to fund operations and to meet our working
capital needs and anticipated capital expenditures for the next twelve to
eighteen months. However, if our capital requirements increase materially from
those currently planned, we may require additional financing sooner than
anticipated. We currently intend to use a portion of the net proceeds from this
offering for expansion of sales, marketing and future development of our
products. We may also use a portion of the net proceeds to invest in
complementary products, to license other technology or to make potential
acquisitions. Thereafter, we may need additional funds for more rapid expansion
of our business, unexpected expenditures or operating losses, responding to
competitive pressures, developing new products and enhancements to our current
products, or acquiring technologies or businesses. 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 have rights, preferences or privileges senior to
those of the holders of our common stock. If we raise additional funds through
the issuance of debt securities, those securities would have rights, preferences
and privileges senior to those of holders of our common stock, and the terms of
these debt securities could impose restrictions on our operations. Additional
financing may not be available when needed, on favorable terms, or at all.

YEAR 2000 COMPLIANCE

We engaged in a year 2000 compliance program during 1999. We performed a
significant amount of testing on our products and our internal computerized
systems considered essential to our operations. Where required, we took
corrective or preventive measures designed to ensure our products and internal
computerized systems would function properly after the year 2000 date change.
Even though we have not experienced any significant problems as a result of
entering the year 2000, we may have undiscovered problems in our computerized
management systems or our products that may cause us to incur significant time
and expenditures to correct. Any failure in year 2000 compliance may cause us to
lose customers, incur significant costs and result in reduced revenues and
increased losses, warranty claims and litigation. In addition, if our customers
or suppliers fail to be year 2000 compliant, it could result in interruptions in
supply, failure of our products to operate correctly and delays in order
fulfillment and payment. Any of these potential year 2000-related difficulties
could adversely affect our results of operations. In aggregate, we incurred
approximately $0.3 million in expenses related to year 2000 compliance.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1998, the Accounting Standards Executive Committee issued Statement of
Position No. 98-1, or SOP 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" which provides guidance on accounting
for the cost of computer software developed or obtained for internal use. SOP
98-1 is effective for financial statements for fiscal years beginning after
December 15, 1998. Adoption of SOP 98-1 did not have a material impact on our
results of operations.

In April 1998, the Accounting Standards Executive Committee issued Statement of
Position 98-5, or SOP 98-5, "Reporting on the Costs of Start-Up Activities."
This standard requires companies to expense the costs of start-up activities and
organization costs as incurred. In general, SOP 98-5 is effective for fiscal
years beginning after December 15, 1998. Adoption of SOP 98-5 did not have a
material impact on our results of operations.

value in the statement of financial position, and that the corresponding gains
or losses be reported either in the statement of operations or as a component of
comprehensive income, depending on the type of hedging relationship that exists.
SFAS 133 will be effective for fiscal years beginning after June 15, 2000. We do
not currently hold derivative instruments or engage in hedging activities.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We believe we do not have any significant exposures to quantitative and
qualitative market risks. For the years ended March 27, 1998, March 26, 1999 and
March 31, 2000, we did not have any derivative financial instruments or any
derivative commodity instruments. Our other financial instruments include trade
accounts receivable, trade accounts payable, convertible subordinated debentures
and a term note. Our accounts receivable and accounts payable are relatively
short term in duration and as a consequence, are not exposed to significant
interest rate changes and consequent fair value adjustments. Our cash
equivalents are invested in interest bearing accounts, generally money market
accounts of less than seven days average maturity, and as a result are not
subject to significant valuation adjustments due to interest rate changes. We
also have convertible subordinated debentures and a term loan, both of which
bear interest at fixed rates. As a result, the payments due under these
debentures and term loan are not subject to adjustment due to interest rate
changes. Our financial market risk includes risks associated with international
operations and related foreign currencies. We anticipate that international
sales will continue to account for a significant portion of our consolidated
revenues. Our international sales are in U.S. dollars and, therefore, are not
subject to foreign currency exchange rate risk. Expenses of our international
operations are denominated in each country's local currency, however, and are
therefore subject to foreign currency exchange risk. Despite this, through March
31, 2000, we have not experienced any significant negative impact on our
operations as a result of fluctuations in foreign currency exchange rates.

26
<PAGE> 30

BUSINESS

Repeater Technologies, Inc. develops, markets and sells wireless network
equipment primarily for CDMA-based wireless communications networks. We provide
cost-effective, high quality wireless network equipment for use in suburban and
rural areas, urban areas and inside office buildings and other coverage-limited
structures. Our products have been deployed with over 40 CDMA wireless service
providers in ten countries.

Our products are based on our Network Repeater technology that expands the
coverage area of a wireless network. Our Network Repeater receives, amplifies
and retransmits voice and data signals between mobile handsets and base stations
and uses an operator's existing radio frequency, or RF, spectrum to provide the
necessary connection to the wireless network.

Our RepeaterHybrid Network incorporates our family of Network Repeaters,
third-party base stations and other related network equipment to provide outdoor
wireless service coverage at significantly reduced capital and operating cost by
reducing the number of required base stations, related communication links and
other wireless network equipment. We have deployed 20 RepeaterHybrid Network
systems with 12 service providers.

Our Distributed Antenna System provides in-building coverage using copper cable
and small antennas. Our OfficeCell distributed antenna system, currently under
development, will provide in-building coverage utilizing fiber-optic cable to
link distributed antennas for increased flexibility and broader coverage. These
systems can be used in a wide range of indoor areas including office buildings,
shopping malls, sports arenas, and tunnels. Our in-building products offer low
cost, ease of installation, and remote monitoring via our proprietary network
management system. We have deployed our copper cable Distributed Antenna System
with 16 service providers in six countries.

INDUSTRY BACKGROUND

WIRELESS MARKET GROWTH. In recent years, there has been substantial growth in
the number of wireless subscribers. The Strategis Group estimates that the
number of worldwide wireless subscribers will increase from approximately 369
million in 1999 to 818 million in 2004, representing a compound annual growth
rate of 17.3%. A number of factors are driving worldwide wireless subscriber
growth, including the expansion of wireless coverage outside of urban areas, the
rapid price decline of wireless usage cost per minute and the proliferation of
new wireless applications such as high-speed data services. These factors,
alongside increasing use of wireless handsets as a substitute for wire-based
communications, are also driving a substantial increase in wireless minutes of
use. To meet the growing demand for wireless services, wireless service
providers are increasingly focusing on expanding network coverage in order to
increase the number of new subscribers and reduce subscriber turnover, or
"churn," resulting from coverage limitations.

WIRELESS STANDARDS. A number of analog and digital standards are available to
wireless service providers in the deployment of wireless networks, including
GSM, or Global System for Mobile Communication, TDMA, or Time Division Multiple
Access, and CDMA, or Code Division Multiple Access. TDMA was established in 1988
and is now widely utilized across the United States as a result of its
transmission and cost efficiencies and signal quality. GSM was introduced in
1991 as an extension of the TDMA standard and is now widely utilized in Europe
and Asia as a result of similar factors as well as its "open standard"
compatibility. The first commercial deployment of a CDMA wireless network took
place in 1995 in Hong Kong and, since then, CDMA wireless networks have been
deployed in Korea, the United States, Canada, India, Japan, Australia, Brazil
and 19 other countries. Unlike competing standards, such as GSM and TDMA, that
divide radio frequency into time slots and allocate these slots to users, CDMA
does not assign a specific frequency to each user. Instead, voice communications
and data are encoded in a random digital sequence for transport across the full
available spectrum. The current market acceptance of GSM and TDMA technologies
could place competitive pressures on the growth of CDMA technology. Most
wireless equipment vendors and service providers support multiple standards.

27
<PAGE> 31

CDMA is the newest of these digital standards and is expected to grow more
rapidly than these competing standards. The Strategis Group estimates that the
number of wireless subscribers utilizing CDMA-based handsets worldwide will grow
from approximately 43 million in 1999 to approximately 186 million in 2004,
representing a compound annual growth rate of 33.7%. Comparatively, the number
of GSM subscribers is expected to grow at a compound annual growth rate of 21.4%
from approximately 182 million in 1999 to approximately 480 million in 2004 and
the number of TDMA subscribers is expected to grow at a compound annual growth
rate of 15.9% from approximately 36 million in 1999 to approximately 75 million
in 2004. The Strategis Group estimates that the percentage of CDMA subscribers
will increase from 11.8% of digital subscribers worldwide in 1999 to 22.7% in
2004.

The actual growth rate of wireless subscribers and CDMA subscribers may differ
materially from the estimated growth rates discussed in this section. The growth
rate of these markets is also subject to global economic cycles as evidenced by
the decrease in demand for wireless equipment that came as a result of the
economic downturn in Asia in 1998. Additionally, the market for network
repeaters is a subset of the worldwide CDMA market. Due to the early stage of
the market for network repeaters, there are currently no relevant statistics for
the growth of this subset of the CDMA market. The market for network repeaters
may not reflect the growth rates of the broader CDMA market and may not reflect
expected growth rates of our business. The growth of this market may be limited
by an inability to achieve broader market acceptance or provide a sufficient
value proposition as a result of the expanding capacity requirements or limited
coverage requirements.

CDMA provides a number of benefits over competing analog and digital standards,
including:

- INCREASED CAPACITY. Unlike competing standards, CDMA does not assign a
specific frequency to each user. Instead, conversations and other
information are encoded in random digital sequence for transport across
the full available spectrum. By allowing multiple subscribers to share
the same frequency, CDMA equipment can provide over three times the
capacity of analog and other digital standards over the same amount of
spectrum.

- IMPROVED QUALITY OF SERVICE. CDMA combines multiple signals and improves
signal strength for a reduction of interference and fading. Additionally,
the method of passing calls between cells in a CDMA network sharply
reduces the risk of disruption or dropped calls.

- BETTER SUPPORT FOR DATA. CDMA offers a powerful platform for evolving
wireless technologies and enables subscribers to use a wide range of new
services including voice recognition, short messaging services and
Internet connections.

Although CDMA provides a number of benefits over other digital technologies, it
is typically more expensive to deploy than GSM and TDMA and, outside of
densely-populated areas, currently provides more capacity than is needed in most
networks. However, because of the advantages it provides in terms of capacity
and support for data, CDMA is expected to be increasingly utilized as a means of
realizing new wireless services such as wireless Internet access.

The recent approval of these CDMA-based next generation wireless standards,
commonly referred to in the wireless communications industry as third generation
or "3G" standards, will allow wireless service providers who upgrade to 3G to
provide very high speed data access and transmission to their subscribers and to
increase the capacity of their networks. The availability of these advanced
services should further increase the demand for wireless coverage. It is
anticipated that new spectrum for 3G networks will be allocated in the United
States, Europe, Latin America and Asia. We believe the build-out of 3G networks
by new licensees and upgrades of existing networks should drive significant
expenditures for 3G compatible network equipment. The build-out and
proliferation of 3G networks, however, may be subject to global economic cycles.

DEPLOYMENT. The traditional method for increasing wireless coverage has been to
deploy a base station, which consists of a RF transmitter, which transmits a
signal, and receiver assembly, which receives incoming signals from wireless
handsets. The receiver assembly is linked to a base station controller
28
<PAGE> 32

through a high capacity digital telephone line. The base station controllers are
then linked to mobile switching centers, which in turn connect to the local
telephone network. Figure 1 depicts a basic wireless network.

[BASIC WIRELESS NETWORK GRAPHIC]

The rapid growth in demand for wireless service has caused a corresponding
increase in the demand for widespread coverage in the following four market
segments:

- LOW-DENSITY/LOW-UTILIZATION MARKETS. These markets are typically suburbs
and small towns in which capacity requirements are low because of low
user density. However, the need for coverage remains high as wireless
subscribers expect to have service throughout these areas. Wireless
service providers have been slow to deploy wireless networks in these
areas because the high infrastructure costs required cannot be spread
over a large enough subscriber base.

- TRAFFIC CORRIDORS. These markets are typically major highways that
connect population centers and are characterized by low-density
utilization along a narrow geographic corridor. Wireless service
providers must offer complete coverage along these corridors so that
subscriber calls are not "dropped" in these areas. However, in these
markets, as in low-density/low-utilization markets, wireless service
providers find the deployment of base stations costly and inefficient.

- HIGH-DENSITY/HIGH-UTILIZATION MARKETS. These markets are typically urban
areas in which service is provided by a large number of closely-spaced
base stations which provide both the capacity for a large number of
subscribers and coverage for a given geographic area. However, in spite
of the large number of base stations, gaps in coverage commonly occur as
the result of blockage of RF signals by buildings, tunnels and other
obstructions.

- IN-BUILDING MARKETS. These markets are characterized by high utilization
throughout a concentrated geographical area. Although base stations can
provide the necessary capacity, the materials used in building
construction can inhibit and interfere with the transmission of RF
signals to and from the building interior.

Both existing wireless service providers and new entrants to the competitive
wireless markets face the challenge of rapidly expanding coverage with limited
capital and operating resources. Addressing these
29
<PAGE> 33

coverage challenges has become a critical differentiator as service providers
attempt to expand their existing subscriber base and minimize subscriber churn
resulting from coverage limitations. Because CDMA base stations are designed to
support high capacity networks in densely populated urban centers, they do not
scale well to low-density/low-utilization markets. In addition, the need for a
high capacity digital telephone connection to the network from each base station
results in significant capital and operating expenses. As a result of growing
capacity and coverage requirements and increasing competitive pressures,
wireless service providers are demanding solutions that provide:

- rapid expansion of coverage;

- reduced capital and operating costs;

- ease of and flexibility in deployment;

- improved quality of RF coverage;

- high levels of technical support; and

- rapidly deployable third generation, or 3G-compatible products.

REPEATER TECHNOLOGIES' SOLUTION

Our RepeaterHybrid Network integrates our Network Repeaters with CDMA base
stations, enabling wireless service providers to quickly expand coverage at
significantly reduced cost. While base stations provide the overall capacity and
initial coverage for a wireless network, our Network Repeaters redirect, focus
or spread the concentrated capacity of a base station to expand coverage to
desired coverage areas. In low-density/low-utilization markets and traffic
corridors, our RepeaterHybrid Network allows network operators to
cost-effectively utilize their network capacity to expand coverage. In
high-density/high-utilization markets, our Network Repeaters fill the coverage
gaps that occur as a result of blockage of RF signals. For the in-building
market, Network Repeaters, when coupled with our copper cable distributed
antenna system, can provide RF coverage in smaller buildings. To provide
coverage for larger buildings and campus environments, we will offer our new
OfficeCell fiber-optic distributed antenna system, which is currently under
development. Our solutions offer the following key benefits:

REDUCED CAPITAL COSTS. RepeaterHybrid Networks provide expansion of coverage
with significantly lower capital costs than required in the deployment of base
station-only networks. Network Repeaters are significantly less expensive than
CDMA base stations. In addition, wireless network operators who use base
stations to increase coverage must incur increased capital costs both as a
result of the need for more communications links and the deployment of larger
base station controllers and mobile switching centers to support these sites.
Our Network Repeaters require no communications link to base station controllers
or mobile switching centers and, as such, reduce the overall capital cost of the
network. In addition, our Network Repeaters are significantly smaller than base
stations, making them less costly to site and install. Our existing
RepeaterHybrid Networks customer base has been able to reduce the number of base
stations in their systems by 15% to 75% and replace them with Network Repeaters
for a given coverage area. For example, in one of our more successful
deployments, utilizing a RepeaterHybrid Network, one of our customers was able
to design a network using 24 Network Repeaters and six base stations, as opposed
to a base station-only network of 24 base stations.

LOWER OPERATING COSTS. Our RepeaterHybrid Network results in substantially lower
operating costs than a base station-only network. By replacing a number of the
base stations with our Network Repeaters, the wireless service provider saves
the substantial monthly charges associated with the high capacity digital
telephone connection required to link to the base station controller.

NETWORK COMPATIBILITY. Because our Network Repeaters receive, amplify and
transmit the same signals received and transmitted by a network's base stations,
we believe our Network Repeaters are compatible with CDMA base stations
operating in the 850 MHz and 1900 MHz bands. Our Network Repeaters have been
successfully deployed in wireless networks with most major manufacturers' base
stations including Ericsson, Inc., Lucent Technologies, Inc., Motorola, Inc. and
Nortel Networks Corp.

30
<PAGE> 34

FLEXIBLE DEPLOYMENT OF CAPACITY AND COVERAGE. Our RepeaterHybrid Network
provides a mix of base stations for capacity and initial coverage and Network
Repeaters for wide-area coverage. As demand grows, network operators are able to
replace Network Repeaters with base stations for increased capacity and relocate
Network Repeaters for increased coverage.

IMPROVED QUALITY OF RF COVERAGE. Our RepeaterHybrid Network is able to meet the
following established industry standards for a high quality CDMA network,
including:

- frame error rate of 2% or less, which is a measure of the quality of the
signal;

- network-wide dropped call rate of 2% or less, which is a measure as to
how often a mobile subscriber is disconnected after the call has been
connected; and

- a network-wide call establishment rate of 95% or more, which is a
measure as to how often a mobile subscriber should be able to originate
and connect to the calling party.

This coverage is achieved by our patent-pending receive diversity technology
employed in our Network Repeaters. Our receive diversity technology combines
multiple signals from subscribers' handsets for improved transmission back to
the base station.

HIGH LEVEL OF SUPPORT. Our service organization offers full customer support
through all phases of implementation, including RF design and installation
services. In addition, we provide customer support 24 hours a day, seven days a
week. When needed, we also utilize field service engineers for on-site
assistance. Our proprietary network management system is designed to monitor,
control and support our Network Repeaters and other products from a central
network operations center through a comprehensive graphical user interface.

STRATEGY

Our goal is to be the leader in the development and deployment of CDMA wireless
coverage enhancement solutions. To achieve this goal, our strategy is to:

CONTINUE TO EXPAND OUR INSTALLED BASE OF NETWORK REPEATERS. We will continue to
focus on providing RepeaterHybrid Network solutions to wireless service
providers who are deploying new CDMA networks or expanding existing CDMA
networks. We also plan to target more established CDMA service providers who
intend to expand their wireless networks to include low-density/low-utilization
areas as they expand coverage. We expect the use of repeaters to become
increasingly important as CDMA-based wireless service providers attempt to
maintain parity with their competitors and meet the minimum coverage required by
their spectrum licenses. We are also focusing on expanding our marketing efforts
in international markets, such as Australia, China, Mexico and South America.

EXPAND OUR IN-BUILDING CAPABILITIES. We believe that the wireless in-building
market will represent a significant market opportunity as wireless subscribers
become increasingly dependent on their wireless service and require more
complete in-building coverage. We intend to continue to develop cost effective
solutions for in-building coverage. Our Distributed Antenna System provides
in-building coverage using copper cable and small antennas. Our OfficeCell
distributed antenna system, currently under development, will provide
in-building coverage utilizing fiber-optic cable. Fiber-optic cable provides
more efficient transmission of RF signals throughout structures for broader
coverage. Additionally, the OfficeCell distributed antenna system provides
uniform RF coverage which allows for flexible antenna placement. Since our
OfficeCell supports all existing digital standards, we will be able to further
expand our market opportunity to include GSM and TDMA wireless networks.

ESTABLISH A MARKET LEADERSHIP POSITION IN THIRD GENERATION OR 3G WIRELESS
NETWORKS. We intend to capitalize on the low cost and flexibility of our Network
Repeaters to speed service providers' transition to third generation or 3G
wireless technologies. We have developed significant expertise in CDMA
technology which will allow us to rapidly bring 3G products to market. Our
Network Repeaters currently meet phase one of the 3G standard known as cdma2000.
We intend to further develop our technology to

31
<PAGE> 35

meet the balance of the 3G CDMA standards and penetrate new markets, including
Europe, China and Japan, as new licensees in these markets develop 3G wireless
networks.

FOCUS ON NETWORK DESIGN AND CUSTOMER SUPPORT. Our high-quality service
offerings, installation support teams and commitment to addressing customer
needs, have enabled us to develop important relationships with customers and a
reputation for providing high-quality solutions. We have developed a unique
knowledge of network design incorporating repeaters and base stations in order
to facilitate our customers' assessment and implementation of our RepeaterHybrid
Networks. Our network design services allow wireless service providers to modify
network design prior to deployment to better suit coverage and capacity demands.
We believe our extensive network design capabilities and comprehensive customer
support have been significant factors in our ability to attract and retain
customers.

PURSUE STRATEGIC ACQUISITIONS. We have in the past and intend in the future to
make acquisitions of complementary technologies and businesses. In November
1999, we completed the acquisition of substantially all of the assets of The
Gwydion Company LLC in order to enhance our in-building capabilities. We may
from time to time make other strategic acquisitions that may complement our
products, expand the breadth of our product offerings, enhance our technical
capabilities, help secure critical sources of supply or that may otherwise offer
growth opportunities.

WIRELESS SYSTEM TECHNOLOGY

Wireless networks operate by dividing the geographic service area territory into
a number of areas called cells. A base station is the equipment that transmits
and receives the RF signal to and from the wireless handsets in the cell site's
coverage area. The coverage provided by a base station is limited by the base
station's RF output power, the frequency of the RF signals and the amount of
clutter, such as buildings, hillsides and other physical obstructions, in the
path of the signals. The higher the RF signal's frequency, the shorter the
distance it can travel for a given output power. For example, a 1900 MHz RF
signal travels approximately half the distance of an 850 MHz cellular signal
with equal output power. Therefore a 1900 MHz RF network may require three to
four times the number of base stations to provide the same coverage as a 850 MHz
RF network. PCS networks tend to utilize 1900 MHz RF while cellular networks
usually utilize 850 MHz RF.

32
<PAGE> 36

The base station also communicates with the base station controller through a
high capacity digital telephone connection. The base station controller
processes the call and communicates with the mobile switching center. The mobile
switching center then routes calls to and from the public switched telephone
network or the base station network. Figure 2 illustrates a traditional wireless
network constructed with only base stations.

[BASE STATION - ONLY WIRELESS NETWORK GRAPHIC]

A wireless service provider can also deploy a RepeaterHybrid Network which uses
a combination of base stations and our Network Repeaters. Our RepeaterHybrid
Network reduces the number of base stations required to achieve an equivalent
coverage area and significantly lowers the cost of the network. Figure 3
illustrates our RepeaterHybrid Network.

[REPEATER HYBRID NETWORK GRAPHIC]

RECEIVE DIVERSITY IN BASE STATIONS. A base station typically has one send and
two receive antennas. When radio signals travel through the air they bounce off
of building surfaces and other objects. Since a mobile subscriber is normally
moving, radio signals travel different paths to the receiving antennas. A base
station's two receiving antennas are spaced several feet apart and are designed
to receive and select the stronger of the two radio signals. This selection
process, known as receive diversity, provides for a higher quality RF signal and
fewer dropped calls.
33
<PAGE> 37

RECEIVE DIVERSITY IN NETWORK REPEATERS. Since a repeater only has one wireless
path to the base station, repeaters are typically unable to provide dual paths
to the base station for receive diversity. We have developed a technology that
allows the information from two receiving antennas at the repeater site for
diversity to be combined into one path for transmission back to the base
station. As a result, we are able to provide the receive diversity typically
only provided in base stations for higher quality RF coverage. We have filed for
patents on this technology in the United States and some foreign countries.

PRODUCTS AND SERVICES

We offer a variety of products and services to our customers. Illustrated in
Figure 4 below is our Network Repeater utilizing receive diversity and operating
in conjunction with our RepeaterStar serving antenna and RepeaterPower battery
backup power system. The system illustrated below is supported by our
RepeaterNet network management system.

[NETWORK REPEATER CELL SITE GRAPHIC]

NETWORK REPEATER. Our Network Repeater receives, filters, amplifies and
re-transmits RF signals between wireless subscribers and base stations in CDMA
wireless networks. Our Network Repeater features our patent-pending receive
diversity technology, which provides high quality voice and data transmission,
while reducing the necessary amount of handset power. Receive diversity
technology allows operators to deploy RepeaterHybrid Networks with comparable
performance and quality to a base station-only network. We started deploying
Network Repeaters in the June quarter of 1997.

REPEATERSTAR. Our RepeaterStar antenna sends and receives signals between the
serving base station and our Network Repeater. Our RepeaterStar antenna
possesses performance characteristics that are optimized for use within our
RepeaterHybrid Network. In addition, our antenna is lighter and smaller than
most competitive products, allowing for easier installation. We started
deploying RepeaterStar antennas in the December quarter of 1999.

REPEATERPOWER. Our RepeaterPower battery back-up power system provides auxiliary
power for the Network Repeaters in the event of a commercial power outage. We
started deploying our battery back-up power systems in the June quarter of 1997.

REPEATERNET. RepeaterNet is our proprietary network management system designed
to monitor and control our Network Repeaters and other products from a central
network operations center. RepeaterNet provides a comprehensive graphical user
interface allowing maintenance personnel to monitor up to 5,000 Network

34
<PAGE> 38

Repeaters, together with their backup power sources and related equipment. We
started delivering RepeaterNet to our customers in the September quarter of
1998.

REPEATERCAD. RepeaterCAD RF design and application engineering services provide
network design for optimal implementation of our Network Repeaters. Our RF
design services include preparation of coverage maps and issuance of search
rings for site locations for base stations and Network Repeaters. Our RF
engineers also optimize the implementation of our Network Repeaters with base
stations and perform testing to verify the coverage and quality of the
RepeaterHybrid Network. Additionally, we provide in-building design services for
application of our Distributed Antenna Systems. We started to provide network
design services to our customers in the September quarter of 1998.

OFFICECELL. We are currently completing development of our OfficeCell product, a
fiber-optic Distributed Antenna System that will allow us to better address the
market for wireless coverage in larger buildings and campuses. Copper wire-based
systems, which are designed for smaller buildings and structures, are unable to
cost-effectively serve these markets. OfficeCell communicates with base
stations, microcells and repeaters using RF signals. The hub unit of the
OfficeCell converts RF signals into lightwaves and communicates with up to 16
OfficeCell remote units using fiber-optic cable. The remote units convert the
lightwaves back to RF signals to communicate with wireless handsets. The use of
fiber-optic cable allows OfficeCell to provide increased flexibility and broader
coverage than in copper wire-based systems. Our OfficeCell will support all
digital wireless standards, allowing us to further expand our market opportunity
to include GSM and TDMA networks.

Repeater Technologies, Network Repeater, RepeaterHybrid Network, OfficeCell,
Distributed Antenna System, RepeaterPower, RepeaterStar, RepeaterNet,
RepeaterCAD and RepeaterMate are trademarks or trade names of Repeater
Technologies, Inc. Each trademark, trade name or service mark of any other
company that appears in this prospectus belongs to its holder.

CUSTOMERS

Relatively few wireless service providers have adopted CDMA wireless technology
and are concentrated in North America and South America.

The following is a list of customers that have purchased at least $500,000 of
our products and services since March 31, 1997. None of these customers is
obligated to purchase any minimum quantity of our products and all of the
contracts with these customers can be cancelled at any time.

<TABLE>
<CAPTION>
NORTH AMERICA SOUTH AMERICA EUROPE AND OTHER
------------- ------------- ----------------
<S> <C> <C>
Airtouch Alcatel Alcatel
Blackfoot Communications Eriline Telecom Comsyst
Clearnet PCS Motorola
GTE Wireless
Independent Wireless One
Intelos/Virginia PCS
Northern PCS Services
PrimeCo
Telus
US West
Via Wireless
Wireless Facilities,
Inc.
</TABLE>

In our fiscal year ended March 26, 1999, ten customers accounted for 50.0% of
our net revenues, with Clearnet PCS accounting for 10.6%. In the fiscal year
ended March 31, 2000, ten customers accounted for 69.7% of our net revenues,
with PrimeCo, Wireless Facilities, Inc. and ClearNet PCS accounting for 13.6%,
12.4% and 10.2%, respectively.

35
<PAGE> 39

SALES AND MARKETING

We offer our products and services in the United States and Canada through our
direct sales force. Our international sales efforts are conducted through a
network of agents and distributors, all of which are assisted by our direct
sales force. International sales accounted for 61.5%, 41.8% and 40.7% of our net
revenues during our fiscal years ended March 27, 1998, March 26, 1999 and March
31, 2000, respectively. We have provided additional information about the
geographic segments in which we operate in Note 1 to our Consolidated Financial
Statements.

Our direct sales force works in conjunction with our support personnel to assist
current and potential customers in identifying capacity and coverage goals. In
addition, our sales force assists customers in preparing a pro forma business
analysis comparing the customer's initial deployment costs and operating
expenses using traditional wireless network equipment against those associated
with using our products and services. Outside of our corporate headquarters, we
currently have sales offices in Montreal, New York, Atlanta, Denver and Chicago.
We have international sales and technical support offices in Sao Paulo, Sydney
and Beijing. We also have established relationships with agents and distributors
located in Australia, Argentina, Brazil, Chile, China, Colombia, Israel, Mexico,
Uruguay and Venezuela. As of March 31, 2000, 20 of our 95 employees were engaged
in sales and marketing.

In support of our sales efforts, we have established a marketing organization
that is responsible for the branding and marketing of our products and services.
Our marketing efforts include participation in trade shows and trade congresses,
the sponsorship of a web site, advertising in trade journals and publication of
a semi-annual newsletter.

CUSTOMER SERVICE AND SUPPORT

We provide a full range of customer support during all phases of product
implementation. Our implementation services include preparation of coverage maps
and issuance of search rings for site locations for base stations and Network
Repeaters. Our application engineers optimize the implementation of our Network
Repeaters with base stations and perform testing to verify the coverage and
quality of the RepeaterHybrid Network. In addition to our support during the
implementation period, we provide ongoing support services, which include:

- rapid resolution of problems through a 24-hour hotline service;

- project management services;

- field service inventory to support our exchange policy; and

- on-site field service engineer support.

MANUFACTURING

We have recently transitioned the manufacture of our products from in-house to
three third-party contract manufacturers. Our third-party manufacturers are
Sanmina Corporation, ACT-GSS/Array Technology and PEMSTAR, Inc. These
manufacturers test our sub-assemblies for functionality prior to assembly into
finished products. We have no long-term contracts with any of these suppliers.
The supply contracts can be cancelled at any time. Any individual purchase order
is generally not cancellable by us unless the supplier fails to deliver in
conformance with the terms of the purchase order. In addition, our contract
manufacturers have recently implemented our proprietary automated test system,
known as RepeaterMATE, for final product testing. The use of RepeaterMATE by our
contract manufacturers will allow us to achieve a level of quality control
comparable to that achieved internally. This will enable us to ship finished
products directly from our contract manufacturers to our customers. As a result,
we will be able to reduce finished goods inventory and decrease our
time-to-market. During the RepeaterMATE testing process, the final product goes
through a full system test while cycling through extreme temperature conditions.
We believe that our three third-party contract manufacturers have the capability
to support our growth for the foreseeable future. We plan to establish contract
manufacturing capabilities in
36
<PAGE> 40

China in calendar year 2001 and Brazil in the future to better serve these
markets. In addition, we are relying on a sole source of supply for our
RepeaterPower battery back-up power system, SENS. We also buy our RepeaterStar
antennas from a sole source, Optim, Inc.

RESEARCH AND PRODUCT DEVELOPMENT

We plan to continue to develop and extend our product offerings for the current
CDMA market and future generations of CDMA wireless standards, including third
generation or 3G standards. In addition, we are developing products and services
for the TDMA and GSM markets, primarily for in-building applications. Products
under development include:

- RepeaterCell, our next generation of CDMA repeater for the 850 MHz
cellular and 1900 MHz PCS bands to handle multiple CDMA carriers with
higher output power. In addition, we are developing the capability to
extend RepeaterCell to the requirements of emerging 3G CDMA standards,
including the 2100 MHz band.

- RoomCell, a lower power version of our OfficeCell product to provide RF
coverage for a single room. Applications for this technology may include
restaurants, small retail stores and lobbies.

- RepeaterLink, a fiber-optic communication link between our Network
Repeaters and base stations. RepeaterLink converts RF signals to
lightwaves and back to RF, allowing a Network Repeater to operate up to
12 miles away from a base station. RepeaterLink is advantageous when
line-of-site for wireless communication between our Network Repeater and
a base station is not feasible.

As of March 31, 2000, 30 of our 95 employees were engaged in research and
product development including hardware and software engineering. Our research
and development expenditures totaled $6.2 million, $4.3 million and $7.3 million
for the fiscal years ended March 27, 1998, March 26, 1999 and March 31, 2000,
respectively.

COMPETITION

The wireless network equipment market is highly competitive. The market for
products that enhance wireless coverage is characterized by rapidly changing
technology, evolving wireless industry standards and frequent new product
introductions and enhancements. Our ability to compete depends on many factors,
including:

- continued new product development;

- comprehensive service and support;

- competitive pricing; and

- reliability.

Current and potential competitors consist primarily of major domestic and
international companies, who offer coverage enhancement solutions based on their
own network repeaters or base stations. Most of these companies have longer
operating histories, larger installed customer bases, substantially greater name
recognition and greater financial, technical, manufacturing, marketing, sales
and distribution resources than we do. We also compete with the TDMA and GSM
product offerings from communications equipment providers and expect that a
number of them will develop competing data communications products and
technologies in the near future. Our current and potential competitors can be
divided into two groups: base station manufacturers, such as Fujitsu Network
Communication, Inc., Hyundai Electronics Industries Co., Ltd., LG Information &
Communications, Ltd., Ericsson, Inc., Lucent Technologies, Inc., Motorola, Inc.,
NEC Corporation, Nokia Corporation, Nortel Networks Corp., and Samsung
Electronics Co., Ltd.; and wireless repeater manufacturers, such as Allen
Telecom Inc., Allgon AB, and Andrew Corporation. We face actual and potential
competition not only from these established companies, but also from new
companies that may develop and market new wireless telecommunications products
and services.

37
<PAGE> 41

INTELLECTUAL PROPERTY

We consider our technologies proprietary and seek to protect our intellectual
property rights. As of March 31, 2000, we had three patents granted and two
patent applications pending. In addition, we are seeking patent protection of
our inventions in foreign countries. One of our pending patent application is
based upon proprietary rights originally obtained from Matthew P. Fuerter, one
of our stockholders and our Vice President of Engineering. We also have a
technology license agreement with Mr. Fuerter. For further information regarding
this technology license agreement, please see "Certain Transactions."

While we believe that our patents will render it more difficult for competitors
to develop and market similar products, our patents may be invalidated,
circumvented, or challenged. In addition, any pending or future patent
applications may not be issued with the scope we seek or at all.

We also rely on copyright and trade secret laws for the protection of our
proprietary software. Source code for our proprietary software is protected as
unpublished copyright works and trade secrets. In addition, we generally enter
into confidentiality or licensing agreements with employees, consultants,
vendors, customers and licensees, and generally limit access to the details of
proprietary designs, software, documentation, and other confidential
information.

Notwithstanding our efforts to protect our rights, it may be possible for a
third party to copy or to obtain and use our intellectual property without our
authorization. We may have to pursue litigation in the future to enforce our
intellectual property rights or to defend against claims of infringement. Such
litigation could result in substantial costs and diversion of resources and
could seriously harm our business, operating results, and financial condition.
We are not engaged in any legal proceedings concerning matters of patent
infringement or enforcement. In addition, others may develop technologies
superior to our technology, duplicate our technology, or design around our
patents.

GOVERNMENT REGULATION

In order for our products to be used in certain jurisdictions, regulatory
approval may be necessary. The delays inherent in this regulatory approval
process may cause the rescheduling, postponement or cancellation of fulfillment
of our orders for products which, in turn, may cause our customers to
reschedule, postpone or cancel orders for those products.

EMPLOYEES

As of March 31, 2000, we employed 95 persons, including 30 in research and
product development, 18 in operations, 13 in customer service and post-sales
support, 20 in sales and marketing and 14 in finance and administration. We also
use contract personnel, primarily for information technology support and product
development.

None of our employees are represented by a labor union and we believe our
relations with our employees are good.

FACILITIES

Our headquarters consist of approximately 40,000 square feet of space leased
through December 31, 2003, located in Sunnyvale, California. The primary
manufacturing of our products takes place at our contract manufacturers'
facilities located in San Jose, California and Calgary, Alberta, Canada. The
primary research and development operation is located at our headquarters in
Sunnyvale, California with an additional product development center located in
Anaheim, California. The Anaheim facility consists of approximately 3,800 square
feet and is leased through January 31, 2004. In addition, we lease office suites
for our direct sales force in the United States, Canada and Brazil. We believe
these facilities will be adequate to meet our requirements for the foreseeable
future.

LEGAL PROCEEDINGS

We are not currently involved in any material legal proceedings.
38
<PAGE> 42

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning our executive
officers and directors and certain other significant employees:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Kenneth L. Kenitzer(1)...... 57 President, Chief Executive Officer and Director
Edward R. Johnson........... 53 Executive Vice President, Chief Technology Officer and Secretary
David A. Bolan.............. 49 Vice President of Marketing
Matthew P. Fuerter.......... 36 Vice President of Engineering
Timothy A. Marcotte......... 43 Vice President and Chief Financial Officer
Frank E. Martens............ 46 Vice President of Operations
Richard R. Conlon(2)........ 50 Vice President of North American Sales
Joel Spina(2)............... 50 Vice President of International Sales
Chris L. 51 Chairman
Branscum(1)(3)(4).........
John Bosch(3)(4)(5)......... 65 Director
Bandel Carano(6)............ 38 Director
Richard G. Grey(4)(6)....... 70 Director
Perry LaForge(3)(7)......... 42 Director
Alessandro Piol(8).......... 43 Director
</TABLE>

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

(1) Member of the board of directors appointed by the holders of a majority of
the common stock.
(2) One of our other significant employees.
(3) Member of the Compensation Committee.
(4) Member of the Audit Committee.
(5) Member of the board of directors appointed by the holders of a majority of
the Series AA convertible preferred stock. Upon conversion of the Series AA
convertible preferred stock to common stock, the former holders of the
Series AA convertible preferred stock will no longer have the exclusive
right to appoint this director.
(6) Member of the board of directors appointed by the holders of a majority of
the Series BB convertible preferred stock. Upon conversion of the Series BB
convertible preferred stock to common stock, the former holders of the
Series BB convertible preferred stock will no longer have the exclusive
right to appoint this director.
(7) Member of the board of directors appointed by the holders of a majority of
the common stock and convertible preferred stock, voting together as a
single class.
(8) Member of the board of directors appointed by the holders of a majority of
the Series CC convertible preferred stock. Upon conversion of the Series CC
convertible preferred stock to common stock, the former holders of the
Series CC convertible preferred stock will no longer have the exclusive
right to appoint this director.

Kenneth L. Kenitzer has served as our President & Chief Executive Officer since
September 1996. He served as our Chief Operating Officer from February 1996 to
September 1996. Mr. Kenitzer joined Repeater Technologies in 1994 as our Vice
President of Operations and Engineering. From 1984 to 1994, Mr. Kenitzer served
in several management positions at Compression Labs, Inc., a video conferencing
company, including Senior Vice President of Operations and Manufacturing. Mr.
Kenitzer holds a B.E.S. (EE) from Brigham Young University.

Edward R. Johnson has served as our Executive Vice President and Chief
Technology Officer since September 1991. Mr. Johnson served as Vice President of
Engineering from October 1983 to September 1991 and was a co-founder of our
company. He has also served as our Corporate Secretary since October 1983. Mr.
Johnson holds a B.S.E.E. from Newark College of Engineering.

39
<PAGE> 43

David A. Bolan has served as our Vice President of Marketing since September
1996. From May 1994 to September 1996, Mr. Bolan served as Vice President of OEM
Sales and Marketing for Spectrian Corporation, a wireless base station power
amplifier manufacturer. Mr. Bolan holds a B.E.E. from Cleveland State University
and an M.B.A. from Xavier University, Cincinnati, Ohio.

Matthew P. Fuerter has served as our Vice President of Engineering since October
1999. From April 1997 to October 1999, Mr. Fuerter was our Director of Systems
and Applications Engineering. From August 1995 to May 1997, Mr. Fuerter worked
for Sprint Spectrum L.P. as an RF Design Manager. From September 1989 to June
1995, Mr. Fuerter worked for GTE Mobilnet as an RF Engineering Supervisor. Mr.
Fuerter studied Electrical Engineering at the University of Buffalo.

Timothy A. Marcotte has been our Vice President and Chief Financial Officer
since November 1999. From March 1999 to November 1999, Mr. Marcotte was an
independent financial consultant. From August 1997 to March 1999, Mr. Marcotte
served as Vice President of Finance and Chief Financial Officer at Sunrise
Technologies International, Inc., a laser medical device manufacturer. From
December 1996 to August 1997, Mr. Marcotte served as Vice President and Chief
Financial Officer for InfoGain Corporation, an information technology consulting
firm. From June 1996 to December 1996, Mr. Marcotte was the Vice President and
Chief Financial Officer for IRIDEX Corporation, a laser medical device
manufacturer. From April 1993 to June 1996, Mr. Marcotte served as Executive
Vice President and Chief Financial Officer for Now Software, Inc., a software
development company. Mr. Marcotte holds a B.S. Anthropology/Zoology and an
M.B.A. from the University of Michigan.

Frank E. Martens has served as our Vice President of Operations since July 1999.
From March 1999 to July 1999, Mr. Martens served as a consultant for ADI
Communications, Inc., which develops equipment for wireless local loop networks.
From November 1996 to February 1999, Mr. Martens served as Vice President of
Customer Advocacy for Telco Systems, Inc., a telecommunications equipment
manufacturer. From October 1990 to November 1996, Mr. Martens served as Vice
President of Service and Support and Director of Business Operations for
Compression Labs, Inc., a video conferencing equipment manufacturer. Mr. Martens
holds a B.S. in Accounting from State University of New York at Albany. Mr.
Martens received his C.P.A. certification in 1981. Mr. Martens also holds an
M.B.A. from Long Island University.

Richard R. Conlon has served as our Vice President of North American Sales since
October 1997. Mr. Conlon was our Executive Director of Domestic Sales from June
1997 to October 1997. From January 1992 to June 1997, Mr. Conlon worked for
Lucent Technologies as their Vice President of Global Sales. Mr. Conlon holds a
B.A. from Wichita State University.

Joel Spina has served as our Vice President of International Sales since
February 1998. From May 1997 to February 1998, Mr. Spina worked for CommScope
Inc., a telecom products provider, as Vice President of Latin America and the
Caribbean. From April 1996 to May 1997, Mr. Spina worked for ADC
Telecommunications Inc. as their Vice President, Latin America. From 1992 to
April 1996, Mr. Spina worked for Andrew Corporation, an RF products and services
provider, as their Director of Sales for Latin America. Mr. Spina holds a
B.S.E.E. from Mackenzie University and an M.B.A. from Northwestern University.

Chris L. Branscum has served as a Director since 1990 and as Chairman since
1993. Mr. Branscum has been a General Partner of Hallador Venture Partners since
1990 and a Managing Director of Hallador Venture Partners, LLC since 1997. From
1985 through 1989, Mr. Branscum was with Arthur Young & Company, where he was a
partner. Prior to 1985, Mr. Branscum was in the private practice of law. Mr.
Branscum holds a J.D. from the University of Pacific, McGeorge School of Law and
a B.S. in Business Administration from California State University, Sacramento.
Mr. Branscum currently serves on the board of directors of Roseville
Communications Company.

John Bosch has served as a Director since May 1990. Since 1981, Mr. Bosch has
been a general partner of Bay Partners, a venture capital firm. In 1976, he
co-founded Cronus Precision Products, Inc., a digital timing company and served
as its President and Chief Executive Officer until 1981. In 1970, Mr. Bosch

40
<PAGE> 44

co-founded Anixter, Bosch and Russell, a consulting firm specializing in
marketing and sales consulting for high technology companies. Mr. Bosch holds a
B.S. in mechanical engineering and an M.B.A. in marketing from the University of
Southern California. Mr. Bosch currently serves on the board of directors of
NetManage, Inc.

Bandel L. Carano has served as a director since 1995. Mr. Carano has been a
general partner of Oak Investment Partners, a venture capital firm, since 1987.
Mr. Carano serves as a member of the Investment advisory board of the Stanford
University Engineering Venture Fund. Mr. Carano also serves as a member of the
board of directors of Advanced Radio Telecom Corporation, a telecommunications
equipment provider, Metawave Communications Corp., a telecommunications
equipment provider, Virata Corporation, a manufacturer of digital subscription
line chip sets and Wireless Facilities, Inc., a systems integrator for wireless
service providers. Mr. Carano holds a B.S. and an M.S. from Stanford University.

Richard G. Grey has served as a Director since 1990. From 1995 to present, Mr.
Grey has served as General Partner, for HMS Hawaii Management Partners. From
1984 to present, Mr. Grey has also served as General Partner of HMS Group, which
manages venture capital funds for investments in the communications industry.
Previously, Mr. Grey served as a Director from 1982 to 1987 for HMS Capital
Limited. From 1979 to 1987, Mr. Grey was in the private practice of law. Mr.
Grey holds a J.D. from the University of San Francisco, an M.B.A. and a B.S.
from the University of California, Los Angeles.

Perry LaForge has served as a Director since September 1999. Mr. LaForge serves
as a Vice President and Partner of Pittiglio, Rabin, Todd and McGrath, an
international management consulting firm and has been employed there since 1984.
Mr. LaForge also founded the CDMA Development Group, a non-profit trade
organization, and has served as the Executive Director and Chairman since
December 1994. Mr. LaForge also founded and serves as the President and Chairman
of inOvate Communications Group, a venture capital firm. Mr. LaForge holds a
B.E. from Santa Clara University and an M.B.A. from the Amos Tuck School at
Dartmouth College.

Alessandro Piol has served as a Director since January 1998. Since 1995, Mr.
Piol has served as Managing Director of Invesco Private Capital (formerly
Chancellor Capital Management), a venture capital and investment management
firm. From 1993 to 1995, Mr. Piol was a General Partner of AT&T Ventures, the
venture capital arm of AT&T, which he co-founded. Prior to AT&T Ventures, Mr.
Piol spent six years in various operational positions at AT&T and co-founded
Pixel Machines. Mr. Piol holds a B.S. and M.S. in Computer Science from the
Columbia University School of Engineering and an M.B.A. from the Harvard
Business School.

BOARD OF DIRECTORS COMMITTEES

The audit committee consists of Messrs. Branscum, Bosch and Grey. The audit
committee reviews our records and affairs to determine our financial condition,
oversees the adequacy of the systems of internal control and monitors our
adherence in accounting and financial reporting to generally accepted accounting
principles.

The compensation committee consists of Messrs. Branscum, Bosch and LaForge. The
compensation committee determines compensation for our officers and administers
our 1990 incentive stock plan, key executives stock option plan, 2000 equity
incentive plan and 2000 employee stock purchase plan. However, our board of
directors must approve all awards granted under these plans to directors and
employees who are subject to Section 16 of the Securities Exchange Act of 1934,
as amended. No officer serving on our board of directors or the compensation
committee has or will participate in decisions awarding compensation or granting
stock options to himself.

DIRECTOR COMPENSATION

Non-employee directors are entitled to receive option grants under the 1990
incentive stock option plan and the 2000 equity incentive plan, the amount of
which is determined by the board of directors in its sole discretion. These
director options will have an exercise price equal to the fair market value of
our common

41
<PAGE> 45

stock when granted and will vest 50% upon grant and the balance in two annual
installments of 25% each. All directors will be reimbursed for expenses incurred
in attending meetings of the board of directors and its committees. In our
fiscal year ended March 31, 2000, one of our non-employee directors, Mr.
LaForge, was granted an option to purchase 40,000 shares of common stock at an
exercise price of $3.00 per share with 20,000 of the shares vesting immediately,
an additional 10,000 shares to vest one year from the date of grant and the
remaining 10,000 shares to vest two years from the date of grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the compensation committee of our board is currently, or
has been at any time since our formation, one of our officers or employees.
During our fiscal year ended March 31, 2000, none of our executive officers
served as a member of the board of directors or compensation committee of any
entity that has one or more officers serving as a member of our board of
directors or compensation committee. Mr. Branscum, a member of the compensation
committee during our fiscal year ended March 31, 2000, is affiliated with
Hallador Venture Fund II, a California limited partnership, which invested
$99,995 in our Series DD convertible subordinated debentures in November 1998.

TERM OF EXECUTIVE OFFICERS AND DIRECTORS

Our directors currently serve terms until the next annual meeting of
stockholders and the election of their successors. Under the terms of the
certificate of incorporation that will be effective upon the closing of this
offering, the board of directors will be divided into three classes, with two
directors in each of Class I and Class II and three directors in Class III.
Messrs. Grey and Bosch will be Class I directors, Messrs. Piol and Carano will
be Class II directors, and Messrs. Branscum, LaForge and Kenitzer will be Class
III directors. Initially, the Class I directors will be nominated for election
for a term of one year, the Class II directors will be nominated for election
for a term of two years, and the Class III directors will be nominated for
election for a term of three years. Upon the expiration of these initial terms,
each director in each class will be elected for a term of three years. Directors
will hold office until the annual meeting of stockholders in the year in which
the term of their class expires and until their successors have been duly
elected and qualified. Executive officers are appointed by, and serve at the
discretion of, the board.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth certain information concerning the compensation
paid during the fiscal year ended March 31, 2000 to the Chief Executive Officer
and the other most highly compensated executive officers whose compensation
exceeded $100,000, based on salary earned in fiscal year 2000, who were
executive officers on March 31, 2000.

42
<PAGE> 46

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM COMPENSATION
COMPENSATION ----------------------------
------------ RESTRICTED ALL OTHER
NAME AND PRINCIPAL OCCUPATION SALARY STOCK AWARDS COMPENSATION
----------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Kenneth L. Kenitzer
President and Chief Executive Officer............... $185,769 -- $ 384(1)
David A. Bolan
Vice President, Marketing........................... 158,577 -- 384(1)
Matthew P. Fuerter
Vice President, Engineering......................... 124,250 $16,290(2) 27,534(3)
Frank E. Martens
Vice President, Operations(4)....................... 95,385 -- 15,288(5)
Edward R. Johnson
Executive Vice President and Chief Technology
Officer.......................................... 173,385 -- 384(1)
Timothy A. Marcotte
Vice President and Chief Financial Officer(6)....... 64,384 -- 15,128(5)
</TABLE>

---------------------------------------------
(1) Represents term life insurance premiums paid by us.
(2) Represents the value of 1,810 shares granted pursuant to a technology
licensing agreement using an estimated fair market value of $9.00 per share,
as determined in good faith by the board of directors on the date of
issuance.
(3) Represents $27,150 in royalties paid in cash pursuant to a technology
licensing agreement and $384 in term life insurance premiums paid by us.
(4) Mr. Martens joined our company in July, 1999. His annual salary is $140,000.
(5) Represents $15,000 bonus and $288 and $128 in term life insurance premiums
paid by us.
(6) Mr. Marcotte joined our company in November, 1999. His annual salary is
$155,000.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information with respect to stock options granted
during our fiscal year ended March 31, 2000 to the chief executive officer and
to the other four executive officers who received salary compensation of more
than $100,000 and who received option grants in fiscal year 2000.

<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE VALUE
TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF SHARE PRICE
SECURITIES GRANTED TO APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(1)
OPTIONS IN FISCAL PRICE PER EXPIRATION ---------------------------
NAME GRANTED 2000 SHARE DATE 5% 10%
---- ---------- ---------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth L. Kenitzer.............. 80,000 4.5% $12.00 1/3/10 $ 212,804 $ 907,495
David A. Bolan................... 50,000 2.6 12.00 1/3/10 133,003 567,184
Matthew P. Fuerter............... 40,000 2.2 12.00 1/3/10 106,402 453,747
Frank E. Martens................. 130,000 7.2 3.00 8/5/09 1,515,807 2,644,679
20,000 1.1 12.00 1/3/10 53,201 226,874
Edward R. Johnson................ 20,000 1.1 12.00 1/3/10 53,201 226,874
Timothy A. Marcotte.............. 180,000 10.0 3.00 11/9/09 2,098,809 3,661,863
</TABLE>

To date, options granted pursuant to our plans vest at a rate of 25% of the
shares underlying the option on the first, second, third and fourth
anniversaries of the grant date.
---------------------------------------------
(1) For a description of the methodology used to calculate these potential
realizable values, see the last paragraph under the heading
"Management -- Option Grants in Current Fiscal Year" below.

43
<PAGE> 47

OPTION GRANTS IN CURRENT FISCAL YEAR

The following table sets forth information with the respect to stock options
granted during our current fiscal year to the chief executive officer and to the
other four executive officers who receive salary compensation of more than
$100,000 and who received option grants during our current fiscal year.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS SHARE PRICE
SECURITIES GRANTED TO APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM
OPTIONS IN FISCAL PRICE PER EXPIRATION ---------------------
NAME GRANTED 2001 SHARE DATE 5% 10%
---- ---------- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kenneth L. Kenitzer................. 20,000 3.7% $6.80 6/28/10 $157,200 $330,874
David A. Bolan...................... 12,500 2.3 6.80 6/28/10 98,250 206,796
Matthew P. Fuerter.................. 10,000 1.8 6.80 6/28/10 78,600 165,437
Frank E. Martens.................... 5,000 0.9 6.80 6/28/10 39,300 82,719
Edward R. Johnson................... 5,000 0.9 6.80 6/28/10 39,300 82,719
</TABLE>

Options granted to these officers in fiscal 2001 vest at the rate of 25% of the
shares underlying the option on January 4, 2001 with the balance of the shares
vesting ratably over the next 36 months.

In accordance with the rules of the SEC, the potential realizable value over the
term of the option, i.e., the period from the grant date to the expiration date,
is based on assumed annual rates of share price appreciation of 5% and 10%,
compounded annually and based on an initial public offering price of $9.00 per
share. These amounts do not represent our estimate of future price. Actual
gains, if any, on option exercises will depend on the future performance of our
common stock.

OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT FISCAL YEAR END

The following table provides information concerning the number and value of
option exercises in our last fiscal year and of unexercised stock options held
as of March 31, 2000 by the executive officers named in the Summary Compensation
Table. The value realized and the values for in-the-money options represent the
positive spread between the respective exercise prices of outstanding stock
options and the value of the underlying common stock as of March 31, 2000, based
on an initial public offering price of $9.00 per share.

OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT FISCAL YEAR END

<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
SUBJECT TO UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL YEAR-END
SHARES YEAR-END MARCH 31, 2000 MARCH 31, 2000
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth L.
Kenitzer........... -- -- 604,500 -- $4,552,250 --
David A. Bolan....... -- -- 230,000 -- 1,566,000 --
Matthew P. Fuerter... -- -- 120,000 -- 696,000 --
Frank E. Martens..... -- -- 150,000 -- 780,000 --
Edward R. Johnson.... 5,250 $44,625 338,000 -- 2,737,000 --
Timothy P.
Marcotte........... -- -- 180,000 -- 1,080,000 --
</TABLE>

BENEFIT PLANS

1990 INCENTIVE STOCK PLAN. Our board of directors adopted our 1990 incentive
stock plan on May 18, 1990 and our shareholders approved it on May 10, 1991. On
January 29, 1997, the board reserved an additional 167,394 shares for option
grants under the 1990 incentive stock plan, which the shareholders approved. On
October 2, 1997 the board reserved an additional 500,000 shares for option
grants under the 1990 incentive

44
<PAGE> 48

stock plan, which the shareholders approved. On March 13, 1998, the board
reserved an additional 739,967 shares for option grants under the 1990 incentive
stock plan, which the shareholders approved. On September 16, 1999, the board
reserved an additional 1,000,000 shares for option grants under the 1990
incentive stock plan. We have reserved a total of 2,716,910 shares of our common
stock for issuance under the 1990 incentive stock plan. As of June 30, 2000,
199,775 shares have been issued upon exercise, net of repurchase, of options
granted under the 1990 incentive stock plan and options to purchase 2,388,432
shares were outstanding. In May 2000, the 1990 incentive stock plan expired in
accordance with its terms and there will be no future grants or purchases under
the 1990 incentive stock plan. Options currently outstanding under the 1990
incentive stock plan will continue in full force and effect under the terms of
the 1990 incentive stock plan until these outstanding options are exercised or
terminated in accordance with their terms.

The 1990 incentive stock plan provides for grants of incentive stock options
that qualify under Section 422A of the Internal Revenue Code of 1986,
nonstatutory stock options and common stock awards to employees, directors and
consultants. Incentive stock options may be granted only to employees, including
officers. Directors are not eligible to receive benefits under the 1990
incentive stock plan unless expressly declared eligible to participate by a
majority of disinterested directors or a committee comprised solely of
disinterested directors.

The 1990 incentive stock plan is administered by our board through the
compensation committee, which determines who will be granted awards under the
1990 incentive stock plan, when and how the awards will be granted, the type and
terms of awards granted, including the exercise period, and the number of shares
subject to the award. The exercise price of incentive stock options granted
under the 1990 incentive stock plan must be at least equal to 100% of the fair
market value of our common stock on the date of grant. However, for any employee
holding more than 10% of the voting power of all classes of our stock, the
exercise price of incentive stock options must be at least 110% of the fair
market value on the date of grant and the term of the option may not exceed five
years. The exercise price of nonstatutory stock options and common stock awards
is set by the board when granted, but must be at least 85% of the fair market
value upon the date of grant. The maximum term of any options granted under the
1990 incentive stock plan is ten years.

An optionee whose relationship as an employee, director or consultant with us or
any related corporation ceases for any reason, other than death or permanent and
total disability, may exercise options for up to three months following the
cessation, unless those options specifically provide for termination at an
earlier or later time. The three-month period is generally extended to twelve
months from termination due to permanent and total disability, and eighteen
months or such other period as is set forth in the optionee's option agreement
for termination due to death. Generally, the optionee may not transfer a stock
option other than by will or the laws of descent or distribution.

In the event of a merger or a consolidation in which we are not the surviving
corporation or a merger in which our securities are converted into shares or
property of another entity, then all outstanding options under the 1990
incentive stock plan shall be assumed, continued or substituted for similar
options by the surviving entity. If the surviving entity refuses to assume or
continue these options or substitute similar options, or in the event of a
dissolution or liquidation of our business, then these outstanding options will
terminate upon completion of that transaction.

Our board may accelerate the vesting of any outstanding option. Our board may
suspend or terminate the 1990 incentive stock plan at any time. The 1990
incentive stock plan terminated on May 18, 2000.

KEY EXECUTIVES STOCK OPTION PLAN. Our board of directors adopted our key
executives stock option plan on May 21, 1993, and our stockholders approved it
on July 26, 1993. Our board amended the key executives stock option plan on
October 14, 1994. On January 29, 1997, our board reserved an additional 900,000
shares for option grants under the key executives stock option plan. We have
reserved a total of 1,351,544 shares for issuance under the key executives stock
option plan. As of June 30, 2000, 273,940 shares had been issued upon the
exercise, net of repurchase, of options granted under the key
45
<PAGE> 49

executives stock option plan and options to purchase 1,050,104 shares were
outstanding, with 27,500 shares reserved for future grants or purchases under
the key executives stock option plan. Options currently outstanding under the
key executives stock option plan will continue in full force and effect under
the terms of the key executives stock option plan until such outstanding options
are exercised or terminated in accordance with their terms.

The key executives stock option plan provides for grants of incentive stock
options that qualify under Section 422 of the Internal Revenue Code of 1986, and
nonstatutory stock options to any persons, including officers and directors,
employed in senior management or key technical positions, as determined by the
board.

The key executives stock option plan is administered by our board through the
compensation committee, which determines who will be granted options under the
key executives stock option plan, when and how the options will be granted, the
type and terms of each option granted, including the exercise period, and the
number of shares subject to the option. The exercise price of incentive stock
options granted under the key executives stock option plan must be at least
equal to the fair market value of our common stock on the date of grant.
However, for any person holding more than 10% of the voting power of all classes
of our stock, the exercise price of incentive stock options must be not less
than 110% of the fair market value and the term of the option may not exceed
five years. The exercise price of nonstatutory stock options must be equal to at
least 85% of the fair market value of our common stock on the date of the grant.
The maximum term of any options granted under the key executives stock option
plan is ten years.

An optionee whose relationship as an employee or director with us or any related
corporation ceases for any reason, other than for death or total and permanent
disability, may exercise options for up to three months following the cessation,
or, if earlier, prior to the expiration date set forth in the option agreement
with that optionee. The three-month period is extended to twelve months or any
shorter period set forth in the optionee's option agreement for any termination
due to total and permanent disability, and eighteen months or any shorter period
set forth in the optionee's option agreement for termination due to death.
Generally, the optionee may not transfer a stock option other than by will or
the laws of descent or distribution.

In the event of a dissolution or liquidation of our business or a merger in
which we are not the surviving corporation or in which our securities are
converted into shares or property of another entity, then all outstanding
options shall be assumed or substituted for similar options by the surviving
entity. If the surviving entity refuses to assume or continue these options or
substitute similar options, then the vesting of these outstanding options will
be accelerated and the options will terminate upon completion of that
transaction.

Our board may accelerate the vesting of any outstanding option.

The key executives stock option plan will terminate on April 30, 2003, unless
terminated sooner by our board.

2000 EQUITY INCENTIVE PLAN. Our board adopted the 2000 equity incentive plan on
February 15, 2000. An aggregate of three million shares of common stock have
been authorized for issuance under the 2000 equity incentive plan. On June 29,
2000, our board approved several amendments to the 2000 equity incentive plan to
allow us, among other things, to make the plan effective on June 29, 2000 and to
grant options under this plan prior to the closing of this offering. The
amendments included an annual automatic increase in the number of shares of
common stock reserved for issuance under the plan by the lesser of 1,000,000 or
4% of the total number of outstanding shares of our common stock, beginning on
January 1, 2001, rather than on January 1, 2002, and the insertion of several
provisions to ensure the plan would comply with applicable laws prior to this
offering. Our stockholders approved the 2000 equity incentive plan, as amended,
on July 10, 2000. As of June 30, 2000, options to purchase 476,350 shares under
the 2000 equity incentive plan were outstanding, with 2,523,650 shares reserved
for future grants.

46
<PAGE> 50

The 2000 equity incentive plan provides for the grant of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986,
nonstatutory stock options, restricted stock purchase rights and stock bonuses
to our employees, consultants and directors. Incentive stock options may be
granted only to employees.

The 2000 equity incentive plan is administered by our board of directors or a
committee appointed by the board, which determines who will be granted awards,
when and how the awards will be granted, the type and terms of awards granted,
including the exercise period, and the number of shares of common stock subject
to the award. The exercise price of incentive stock options granted under the
2000 equity incentive plan must be at least equal to the fair market value of
our common stock on the date of grant. However, for any employee holding more
than 10% of the voting power of all classes of our stock, the exercise price of
incentive stock options will be no less than 110% of the fair market value and
the term may not exceed five years. The exercise price of nonstatutory stock
options can be no less than 85% of the fair market value. The maximum term of
options granted under the 2000 equity incentive plan is ten years. All options
granted under the 2000 equity incentive plan must vest at a rate of not less
than 20% per year. If we elect to repurchase any unvested stock granted under
the 2000 equity incentive plan, we must repurchase such stock at a price not
less than the original exercise price attributed to such option.

Unless otherwise provided in an option agreement, an optionee whose relationship
as an employee, director or consultant with us or any related corporation ceases
for any reason, other than for death or total and permanent disability, may
exercise options in the three-month period following such cessation, unless
those options specifically provide a longer or shorter period, or, if earlier,
the expiration of the option set forth in the option agreement with that
optionee. The three-month period is extended to twelve months for terminations
due to total and permanent disability, and to eighteen months for terminations
due to death. Generally, the optionee may not transfer a stock option other than
by will or the laws of descent or distribution, unless the optionee holds a
nonstatutory stock option that provides for transfer in the option agreement.
However, an optionee may designate a beneficiary who may exercise the option
following the optionee's death.

When we become subject to Section 162(m) of the Internal Revenue Code, no person
may be granted options under the 2000 equity incentive plan covering more than
two million shares of common stock in any calendar year. Among other things,
Section 162(m) denies a deduction to publicly-held corporations for certain
compensation paid to specified employees in a taxable year to the extent that
the compensation exceeds $1,000,000.

Restricted stock purchase awards granted under the 2000 equity incentive plan
may be granted pursuant to a repurchase option in favor of Repeater Technologies
in accordance with a vesting schedule determined by the board. The price of a
restricted stock purchase award under the 2000 equity incentive plan cannot be
less than 85%, or 100% for 10% stockholders, of the fair market value of the
stock subject to the award on the date of grant. Stock bonuses may be awarded in
consideration of past services without a purchase payment. Unless otherwise
specified, rights under a stock bonus or restricted stock bonus agreement
generally may not be transferred other than by will or the laws of descent and
distribution during such period as the stock awarded pursuant to that agreement
remains subject to the agreement.

A change in control of Repeater Technologies is defined in the 2000 equity
incentive plan as the sale of substantially all of our assets or merger with or
into another corporation. If a change in control occurs, any outstanding awards
held by persons then performing services for us as an employee, director or
consultant may either be assumed or continued or an equivalent award may be
substituted by the surviving entity. If the surviving entity refuses to assume
or substitute the outstanding awards, the vesting of these awards will be
accelerated and will terminate upon completion of the change of control.

Subject to stockholder approval, as necessary, our board of directors may amend
the 2000 equity incentive plan at any time. Unless sooner terminated by our
board, the 2000 equity incentive plan will terminate on the day before the 10th
anniversary of its adoption by the board.

47
<PAGE> 51

NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS. The 2000 equity incentive plan
provides for automatic stock option grants to non-employee directors on our
board. Each person who is not an employee and is elected or appointed to our
board after the closing of this offering will be granted, on the date of that
person's election or appointment, an initial stock option to purchase 25,000
shares of our common stock at the fair market value of our common stock on that
grant date. On the closing date of this offering, non-employee directors who
have not previously been granted options to purchase our common stock will
receive initial stock option grants as if they were first elected or appointed
to the board immediately after the closing of the offering.

In addition to these initial stock option grants, the 2000 equity incentive plan
provides that each non-employee director serving on the day after each annual
stockholders' meeting, shall, on that date, be granted an annual stock option
grant to purchase 6,500 shares of our common stock at the fair market value of
our common stock on that grant date. For non-employee directors that have not
served on the board for the entire period preceding the annual stockholders'
meeting, the amount of shares subject to this annual stock option grant shall be
reduced, pro-rata, for each full quarter that person did not serve on the board.

The non-employee director stock options will have a maximum term of ten years
and generally must be exercised within the periods described above following
cessation of service on the board. The non-employee directors become vested in
each initial stock option grant and annual stock option grant one-half after
each year of service on the board following the stock option grant date so that
the directors will become vested fully after two years of service on the board
after the grant. If there is a change of control as described above, each
non-employee director will become fully vested in the unvested portion of these
stock options and will be entitled to exercise the options for up to 12 months
following the termination of that director's service on the board or, if
shorter, the original term of the stock options. The stock options shall not be
transferable except as otherwise provided in a stock option agreement to the
extent permitted by federal securities laws and regulations.

2000 EMPLOYEE STOCK PURCHASE PLAN. Our board of directors adopted the 2000
employee stock purchase plan on February 15, 2000 and amended the purchase plan
on July 6, 2000, and our stockholders approved it on July 10, 2000. A total of
500,000 shares of common stock have been reserved for issuance under the
purchase plan. Each January 1, beginning in 2002 and ending in 2010, the number
of shares of common stock reserved for issuance under the purchase plan will
automatically be increased by 1.0% of the total number of shares of common stock
then outstanding or, if less, by 250,000 shares. The purchase plan is intended
to qualify as an employee stock purchase plan within the meaning of Section 423
of the Code.

The purchase plan provides a means by which employees may purchase shares of our
common stock through payroll deductions. The purchase plan is implemented by
offerings of rights to eligible employees. Our board will determine the terms of
each offering, including eligibility, purchase price and the duration of the
offering, which may not exceed 27 months. The first offering will begin on the
closing date of this offering and terminate on October 31, 2002. Purchase dates
will occur on April 30, 2001, October 31, 2001, April 30, 2002, and October 31,
2002 under the initial offering.

Employees who participate in an offering may have up to 15% of their earnings
withheld pursuant to the purchase plan. The price of common stock purchased
under the purchase plan will not be less than 85% of the lower of the fair
market value of the common stock at the commencement date of each offering
period or the relevant purchase dates established by our board. Employees may
end their participation in an offering at any time during such offering except
during the 10 day period immediately prior to a purchase date. Employees'
participation in all offerings will end automatically and immediately on
termination of their employment with us or one of our subsidiaries.

Unless otherwise determined by our board of directors, employees are eligible to
participate in the purchase plan only if they have been continuously employed by
us or one of our subsidiaries designated by the board of directors for at least
20 hours per week and five months per calendar year. No employee shall be
eligible for the grant of any rights under the purchase plan if, immediately
after the rights are granted,
48
<PAGE> 52

that employee would own 5% or more of the total combined voting power or value
of all classes of our then outstanding capital stock. Eligible employees may be
granted rights only if those rights, together with any other rights granted
under employee stock purchase plans, do not permit that employee's rights to
purchase shares of our common stock to accrue at a rate which exceeds $25,000 of
fair market value of our common stock for each calendar year in which those
rights are outstanding.

In the event of a dissolution or liquidation of our business, a sale of all or
substantially all of our assets or a merger in which we are not the surviving
corporation or in which our securities are converted into shares or property or
another entity, then all outstanding rights to purchase our common stock may be
assumed or substituted for similar rights by the surviving entity. If the
surviving or acquiring entity does not assume these rights or substitute similar
rights for these rights, then our board has the discretion to provide that all
sums collected by payroll deductions may be applied to purchase shares
immediately prior to that transaction.

Our board may amend or terminate the purchase plan at any time without
stockholder approval, except to the extent that stockholder approval is required
under Section 423 of the Code, Rule 16b-3 under the Exchange Act or any
applicable Nasdaq listing requirements. No amendment or termination may impair
any outstanding rights and obligations without the consent of the person
affected, except as necessary to comply with any laws or regulations or to
comply with Section 423 of the Code.

401(K) PLAN. We have established an employee savings and retirement plan, the
401(k) plan, for eligible employees. Eligible employees may elect to defer a
percentage of their pre-tax gross compensation in the 401(k) plan, subject to
the statutorily prescribed annual limit. We may make matching contributions on
behalf of all participants in the 401(k) plan in an amount determined by our
board of directors. We may also make additional discretionary profit-sharing
contributions in such amounts as determined by our board, subject to statutory
limitations. Matching and profit-sharing contributions, if any, are subject to a
vesting schedule; all other contributions are at all times fully vested. We
intend the 401(k) plan, and the accompanying trust, to qualify under Sections
401(k) and 501 of the Internal Revenue Code so that contributions by employees
or by us, and income earned (if any) on plan contributions, are not taxable to
employees until withdrawn from the 401(k) plan, and so that we will be able to
deduct our contributions, if any, when made. The trustee under the 401(k) plan,
at the direction of each participant, invests the assets of the 401(k) plan in
any of a number of investment options.

49
<PAGE> 53

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of June 30, 2000, certain information with
respect to our common stock owned beneficially by each director, by the
executive officers, by all executive officers and directors as a group and by
each beneficial owner of more than 5% of our outstanding common stock. This
table takes into account the sale of $5.1 million of our Series EE convertible
subordinated debentures and related warrants on July 11, 2000, and conversion of
these debentures into 637,500 shares of common stock upon the closing of this
offering.

Percentage of beneficial ownership is based on 17,916,525 shares of common stock
as of June 30, 2000, and 22,666,525 shares of common stock outstanding after
completion of this offering.

Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to the securities. In
computing the number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options and warrants
held by that person that are currently exercisable or exercisable within 60 days
of June 30, 2000 are deemed outstanding. These shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of each other
person. Except as noted in the footnotes, each of the persons listed has sole
investment and voting power with respect to the shares of common stock included
in the table. Where a person is deemed to beneficially own common stock that is
subject to our right to repurchase pursuant to our 1990 incentive stock plan,
1993 key executives stock option plan and 2000 equity incentive plan, we have
indicated the number of shares that are subject to our right of repurchase at
the end of 60 days after June 30, 2000.

50
<PAGE> 54

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
SHARES OF STOCK SUBJECT TO OWNERSHIP
COMMON STOCK REPURCHASE -------------------
BENEFICIALLY AFTER BEFORE AFTER
STOCKHOLDER OWNED JUNE 30, 2000 OFFERING OFFERING
----------- ------------ ---------------- -------- --------
<S> <C> <C> <C> <C>
Funds Affiliated with Oak Investment
Partners(1).................................... 3,257,768 -- 18.1% 14.3%
525 University Avenue, Suite 1300
Palo Alto, CA 94301
Bandel Carano(1)................................. 3,257,768 -- 18.1 14.3
Funds Affiliated with Charter Growth
Capital(2)..................................... 2,237,825 -- 12.5 9.9
525 University Avenue, Suite 1500
Palo Alto, CA 94301
Funds Affiliated with Nazem & Company(3) ........ 2,213,077 -- 12.3 9.8
645 Madison Avenue
New York, NY 10022
Funds Affiliated with INVESCO Private Capital
Inc.(4)........................................ 2,164,656 -- 12.0 9.5
1166 Avenue of the Americas
New York, NY 10036
Alessandro Piol(4)............................... 2,164,656 -- 12.0 9.5
TransCapital SDN BHD(5).......................... 1,778,326 -- 9.9 7.8
Plot 20, Lorong, Jelawat 2, Mk1, SPT
Bandar Seberang Jaya, 13700 Prai, Penang,
Malaysia
Hallador Venture Fund II, L.P.(6)................ 885,368 -- 4.9 3.9
740 University Avenue, Suite 110
Sacramento, CA 95825
Chris L. Branscum(6)............................. 885,368 -- 4.9 3.9
Funds Affiliated with HMS Capital Partners(7).... 881,753 -- 4.9 3.9
2468 Embarcadero Way
Palo Alto, CA 94303
Richard G. Grey(7)............................... 881,753 -- 4.9 3.9
Funds Affiliated with Bay Partners IV and
California BPIV, L.P.(8)....................... 737,133 -- 4.1 3.3
10600 North DeAnza Boulevard, Suite 1000
Cupertino, CA 95014-2031
John Bosch(8).................................... 737,133 -- 4.1 3.3
Kenneth L. Kenitzer.............................. 647,016 254,998 3.5 2.8
David A. Bolan................................... 242,500 132,000 1.3 1.1
Matthew P. Fuerter............................... 132,385 82,500 * *
Edward R. Johnson................................ 370,000 72,500 2.0 1.6
Timothy A. Marcotte.............................. 180,000 180,000 1.0 *
Frank E. Martens................................. 155,000 122,499 * *
Perry LaForge.................................... 40,000 20,000 * *
All executive officers and directors as a group
(12 persons)................................... 9,693,579 864,997 49.1 39.6
Executive officers and directors as a group,
excluding stock subject to repurchase after
June 30, 2000.................................. 8,828,582 46.8 37.4
</TABLE>

51
<PAGE> 55

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

* Less than 1% of the outstanding common stock.
(1) Includes 3,188,678 shares held by Oak Investment Partners VI, Limited
Partnership and 69,090 shares held by Oak VI Affiliates Fund. Mr. Carano, a
Director, is a managing member of Oak Associates VI, LLC, which is the
general partner of Oak Investment Partners VI, Limited Partnership, and a
managing member of Oak VI Affiliates, LLC, which is the general partner of
Oak VI Affiliates Fund. Mr. Carano disclaims beneficial ownership of the
shares held by the funds affiliated with Oak Investment Partners, except to
the extent of his pecuniary interest therein.
(2) Includes 1,561,756 shares held by Charter Growth Capital Co-Investment Fund,
L.P., 398,699 shares held by Charter Growth Capital, L.P. and 277,370 shares
held by CGC Investors, L.P. The individuals who exercise voting and
dispositive control over the shares held by this stockholder are Kevin J.
McQuillan, Steven P. Bird, James H. Boettcher and A. Barr Dolan. These
individuals disclaim beneficial ownership of the shares held by funds
affiliated with Charter Growth Capital, except to the extent of their
pecuniary interest therein.
(3) Includes 1,645,201 shares held by Nazem & Company IV, L.P. and 567,876
shares held by Transatlantic Venture Fund. The individuals who exercise
voting and dispositive control over the shares held by this stockholder are
Fred F. Nazem and Philip E. Barak. These individuals disclaim beneficial
ownership of the shares held by funds affiliated with Nazem & Company,
except to the extent of their pecuniary interest therein.
(4) Includes 1,348,451 shares held by Citiventure 96 Partnership, L.P., 499,656
shares held by Chancellor LGT Private Capital Offshore Partners II, 277,370
shares held by Chancellor LGT Private Capital Partners III and 39,179 shares
held by Chancellor LGT Private Capital Offshore Partners I. Mr. Piol, a
Director, is Managing Director of INVESCO Private Capital, Inc., which is
the general partner of the general partners of Chancellor LGT Private
Capital Offshore Partners II, Chancellor LGT Private Capital Partners III
and Chancellor LGT Private Capital Offshore Partners I. INVESCO Private
Capital, Inc. is also an investment advisor to Citiventure 96 Partnership,
L.P. Mr. Piol disclaims beneficial ownership of the shares held by the funds
affiliated with INVESCO Private Capital, Inc., except to the extent of his
pecuniary interest therein.
(5) The individual who exercises voting and dispositive control over the shares
held by this stockholder is S.C. Tan. This individual disclaims beneficial
ownership of the shares held by Trans Capital SDN BHD, except to the extent
of his pecuniary interest therein.
(6) Includes 885,368 shares held by Hallador Venture Fund II, L.P. Mr. Branscum,
a Director, is a general partner of Hallador Venture Partners, LLC, which is
the manager of Hallador Venture Fund II, L.P. Mr. Branscum disclaims
beneficial ownership of the shares held by the funds affiliated with
Hallador Venture Partners, LLC, except to the extent of his pecuniary
interest therein.
(7) Includes 660,062 shares held by HMS Capital Partners, 163,832 shares held by
HMS Capital Partners (Annex), 37,015 shares held by HMS Group and 20,844
shares held by HMS (Overseas) Partners. Mr. Grey, a Director, is a general
partner of HMS Management, which is a general partner of HMS Capital
Partners, HMS Capital Partners (Annex), HMS Group and HMS (Overseas)
Partners. Mr. Grey disclaims beneficial ownership of the shares held by
these funds, except to the extent of his pecuniary interest therein.
(8) Includes 678,171 shares held by Bay Partners IV and 58,962 shares held by
California BPIV, L.P. Mr. Bosch, a Director, is a general partner of Bay
Partners, which is a general partner of Bay Partners IV and California BPIV,
L.P. Mr. Bosch disclaims beneficial ownership of the shares held by the
funds affiliated with Bay Partners, except to the extent of his pecuniary
interest therein.

52
<PAGE> 56

CERTAIN TRANSACTIONS

CONVERTIBLE DEBENTURES AND PREFERRED STOCK FINANCINGS

From September 1996 through August 1997, we raised approximately $11.2 million
in gross proceeds from the sale of Series BB convertible preferred stock
including 6.84% convertible promissory notes in an aggregate principal amount of
$0.8 million that were converted into Series BB convertible preferred stock. We
issued a total of 4,246,316 shares of Series BB convertible preferred stock in
these transactions. The purchase price of the Series BB convertible preferred
stock was $2.64 per share. In addition, in connection with this financing we
issued warrants to purchase up to 816,412 shares of our Series BB convertible
preferred stock. The exercise price of the warrants is $2.64 per share. The
Series BB warrants will expire upon the earlier of the closing of this offering
or an acquisition in which we are not the survivor. There were 30 investors who
participated in the Series BB convertible preferred stock financing and 17 of
these also were issued warrants. The participants in this financing included
four entities affiliated with members of our board of directors, as set forth in
the table below. The material terms of the Series BB convertible preferred stock
are described below.

In November and December 1997, we raised approximately $12.1 million in gross
proceeds from the sale of our Series CC convertible preferred stock. We issued a
total of 4,402,907 shares of Series CC convertible preferred stock in this
transaction at a purchase price of $2.75 per share. There were 25 investors who
participated in the Series CC convertible preferred stock financing, including
three members of our board of directors, as set forth in the table below. The
material terms of the Series CC convertible preferred stock are described below.

In November 1998, we raised approximately $15.0 million in gross proceeds from
the sale of our Series DD convertible subordinated debentures to 19 investors.
These convertible subordinated debentures bear interest at the rate of eight
percent (8%) per annum, payable quarterly, and mature on November 25, 2003.
These debentures are convertible into Series DD convertible preferred stock at
any time prior to the maturity date at the option of the holder. The conversion
price for the Series DD convertible subordinated debentures is $5.50 per share,
subject to adjustment. Upon the closing of this offering, we have the right to
convert the debentures into fully paid and nonassessable shares of Series DD
convertible preferred stock. The material terms of the Series DD convertible
preferred stock are described below.

During the fiscal year that ended on March 26, 1999, we paid a total of
approximately $0.4 million in interest on the debentures and we have paid a
total of approximately $1.2 million in interest for the year ended March 31,
2000. Although we plan to convert the principal amount of the debentures into
common stock upon the closing of the offering, we expect to pay the interest
accruing from April 1, 2000 through the closing date shortly after the closing.

In July 2000 we raised approximately $5.1 million in gross proceeds from the
sale of our Series EE convertible subordinated debentures to six investors.
These convertible subordinated debentures bear interest at the rate of eight
percent (8%) per annum, payable quarterly, and mature on November 25, 2003.
These debentures are convertible into Series EE convertible preferred stock at
any time prior to the maturity date at the option of the holder. The conversion
price for the Series EE convertible subordinated debentures is the lesser of
$8.00, subject to adjustment, or the offering price of our initial public
offering of our common stock. Upon the closing of this offering, we have the
right to convert the debentures into fully paid and nonassessable shares of
Series EE convertible preferred stock. The material terms of the Series EE
convertible preferred stock are described below. In addition, in connection with
this financing we issued warrants to purchase that number of shares of our
Series EE convertible preferred stock equal to $1,020,000 divided by the
conversion price of the Series EE convertible subordinated debentures, at an
exercise price of $8.00 per share. The participants in this financing included
two entities affiliated with members of our board of directors as set forth in
the table below.

53
<PAGE> 57

The following table lists our 5% stockholders and the members of our board of
directors who, through their affiliation with certain venture capital funds,
participated in the above transactions in excess of $60,000:

<TABLE>
<CAPTION>
WARRANTS
EXERCISABLE SERIES EE
FOR # OF CONVERTIBLE
SERIES BB SHARES OF SERIES CC SERIES DD DEBENTURES
CONVERTIBLE SERIES BB CONVERTIBLE CONVERTIBLE AND RELATED
PREFERRED CONVERTIBLE PREFERRED DEBENTURES WARRANTS
DIRECTOR/5% STOCK # OF PREFERRED STOCK # OF DOLLAR AMOUNT DOLLAR AMOUNT
STOCKHOLDER AFFILIATED VENTURE CAPITAL FUND SHARES STOCK SHARES INVESTED INVESTED(1)
----------- ---------------------------------- ----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alessandro Piol Chancellor LGT Private Capital -- -- 36,727 $ 13,492 --
Partners I, C.V.
Chancellor LGT Private Capital -- -- 486,364 172,112 --
Partners II, L.P.
Chancellor LGT Private Capital -- -- 260,000 95,541 --
Partners III, L.P.
Citiventure 96 Partnership -- -- 1,053,091 386,986 $1,500,000
Fund, L.P.
Chris L. Branscum Hallador Venture Fund II, A 314,783 45,895 73,000 99,996 --
California Limited Partnership
Bandel Carano Oak Investment Partners VI, 779,154 277,614 1,066,037 -- 1,954,400
Limited Partnership
Oak VI Affiliates Fund 18,179 6,477 24,872 -- 45,600
John Bosch Bay Partners IV 249,892 36,434 37,340 -- --
California BPIV, L.P. 21,729 3,168 3,246 -- --
Richard Grey HMS Capital Partners 178,135 46,388 47,533 -- --
HMS Capital Partners (Annex) 132,072 -- -- -- --
HMS Group -- -- 27,925 49,995 --
HMS (Overseas) Partners 7,961 -- -- -- --
Trans Capital -- 1,552,042 226,284 -- -- --
SDN, BHD
Funds Affiliated Nazem & Company IV, L.P. 354,126 90,122 363,636 1,123,320 500,000
with Nazem & Transatlantic Venture Fund -- -- 363,636 1,123,320 --
Company
Funds Affiliated Charter Growth Co-Investment -- -- -- 7,875,004 866,250
with Charter Fund, L.P.
Growth Capital Charter Growth Capital, L.P. -- -- -- 1,999,998 233,750
</TABLE>

---------------------------------------------
(1) Each investor received warrants exercisable for shares of Series EE
convertible preferred stock in an amount equal to 20% of the dollar amount
invested divided by the conversion price of the Series EE convertible
subordinated debenture at an exercise price of $8.00 per share.

MATERIAL TERMS OF CONVERTIBLE PREFERRED STOCK

The convertible preferred stock issued in the above transactions and the
existing Series AA convertible preferred stock will convert into common stock
upon the closing of this offering. Prior to the closing of this offering, the
material terms of the convertible preferred stock are as follows:

CONVERSION. Each share of Series AA, BB, CC, DD and EE convertible preferred
stock is convertible into shares of our common stock, at the option of the
holder, according to a conversion ratio, subject to adjustments in accordance
with antidilution provisions contained in our certificate of incorporation.

Each share of Series AA, BB, CC, DD or EE convertible preferred stock
automatically converts into the number of shares of common stock into which such
shares are convertible at the then effective conversion ratio upon the
affirmative vote of the holders of at least a majority of the shares of Series
AA, BB, DD or EE convertible preferred stock, respectively, or two thirds of the
shares of Series CC convertible preferred stock, respectively, or upon the
closing of a public sale of common stock at a per share price of not less

54
<PAGE> 58

than $6.50 and aggregate gross proceeds of not less than $10.0 million.
Accordingly, each share of Series AA, BB, CC, DD and EE convertible preferred
stock will convert into common stock upon the closing of this offering. The
conversion ratio that we are using in connection with this offering is set forth
by the terms of the preferred stock, as contained in our certificate of
incorporation, and will be one share of common stock for each share of Series
BB, CC, DD and EE convertible preferred stock and approximately 1.1972 shares of
common stock for each share of Series AA convertible preferred stock.

DIVIDENDS. Holders of the convertible preferred stock have been entitled to
receive non-cumulative dividends, prior and in preference to any payment of any
dividend on common stock, when and if declared by our board of directors, in the
amount of $0.51, $0.264, $0.275, $0.55 and $0.80 per share for Series AA, Series
BB, Series CC, Series DD and Series EE convertible preferred stock,
respectively. The holders of Series AA, BB, CC, DD and EE convertible preferred
stock have also been entitled to participate in dividends on common stock, when
and if declared by our board of directors, based on the number of shares of
common stock held on an as-if converted basis. No dividends have been declared
to date.

LIQUIDATION PREFERENCES. In the event of a liquidation, and to the extent assets
are available, the Series AA, Series BB, Series CC, Series DD and Series EE
convertible preferred stockholders are entitled to a liquidation preference
distribution of $5.10, $2.64, $2.75, $5.50 and $8.00 per share, respectively,
plus declared but unpaid dividends, before any liquidation distributions are
made to common stockholders. Additionally, the Series CC, Series DD and Series
EE convertible preferred stock are entitled to share the remaining proceeds pro
rata, on an as-converted to common stock basis, with the holders of common
stock.

VOTING. Each share of Series AA, BB, CC, DD and EE convertible preferred stock
has voting rights equal to an equivalent number of shares of common stock into
which it is convertible and votes together as one class with the common stock.

As long as at least 1,187,500 shares of Series AA and Series BB, 1,500,000
shares of Series CC, 900,000 shares of Series DD and 250,000 shares of Series EE
convertible preferred stock remain outstanding, we must obtain approval from the
holders of a majority of the Series AA and BB convertible preferred stock, 55%
of the Series CC convertible preferred stock, and a majority of each of the
Series DD and Series EE convertible preferred stock in order to alter our
certificate of incorporation or bylaws as related to convertible preferred
stock, change the authorized number of shares of common or convertible preferred
stock, redeem or repurchase any shares of common stock other than shares subject
to our right of repurchase, authorize a dividend for any class or series of
stock, authorize or issue any equity security having a preference over, or being
in parity with, the Series AA, BB, CC, DD and EE convertible preferred stock, or
effect a liquidation, merger, consolidation or sale of assets of Repeater that
results in a transfer of 50% or more of the voting control of Repeater.

Holders of Series AA, BB and CC convertible preferred stock and common stock are
entitled to elect one member, two members, one member and two members of the
board of directors, respectively. Holders of Series AA, BB, CC, DD and EE
convertible preferred stock, voting together as a single class with the holders
of common stock, have been entitled to elect the balance of directors, if any.

CHANGE OF CONTROL AGREEMENTS

In November 1999, we entered into a change of control agreement with Timothy A.
Marcotte, our Vice President and Chief Financial Officer. Under the terms of
this agreement, immediately upon a change of control, Mr. Marcotte's stock
options will vest in full. Furthermore, if Mr. Marcotte's employment is
involuntarily terminated without just cause within one year after the change of
control, he will be entitled to six months of severance pay and employee
benefits. In addition, Mr. Marcotte's options will be exercisable for a period
of nine months from the date of termination.

55
<PAGE> 59

LICENSE AGREEMENT

In May 1998, we entered into a license agreement with Matthew P. Fuerter, our
Vice President of Engineering, for commercial and intellectual property rights,
including patent rights, in receive diversity technology. We have incorporated
this technology into some of our repeaters, as described under the headings
"Wireless System Technology" and "Products and Services" in the "Business"
section of this prospectus. Under this license agreement, we have paid Mr.
Fuerter a bonus of $50,000 and we have agreed to pay Mr. Fuerter an additional
$50,000 within 30 days of the patent being issued for this technology. We have
also agreed to make quarterly royalty payments to Mr. Fuerter equal to the
greater of 3% of our quarterly net revenues derived from the sale of products
incorporating the licensed technology or $75 for each product sold incorporating
the licensed technology. We have also agreed to issue Mr. Fuerter five shares of
our common stock for each unit we sell in the prior quarter incorporating the
licensed technology. As of March 31, 2000, we have paid Mr. Fuerter a total of
$85,775 in quarterly royalty payments and have issued to Mr. Fuerter a total of
2,385 shares of common stock earned under this license agreement. These
royalties will be paid over the life of the patent, if issued, but will cease
once we have shipped 10,000 product units incorporating the licensed technology.
Our obligation to pay royalties will also cease if the patent application for
this invention is rejected, or if a patent is issued, but subsequently is
determined to be unenforceable. The royalties paid under this license agreement
are non-refundable. In addition, a portion of the patent application embodying
additional technology will be subject to a separate royalty agreement, if we
pursue the completion and commercial development of this additional technology.

MATERIAL TERMS OF SEVENTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT

We and the holders of an aggregate of 17,061,514 shares of common stock,
assuming the conversion of our Series AA, BB, CC, DD and EE convertible
preferred stock, our Series DD convertible debentures and our Series EE
convertible debentures at a conversion price of $8.00 per share, and the
exercise of warrants to purchase up to 1,065,258 shares of our common stock, are
parties to a seventh amended and restated investors' rights agreement that has
granted certain preemptive rights on new issuances of securities and information
rights to the holders. In addition, we have agreed to certain covenants in this
agreement. These rights and covenants will terminate upon the closing of this
offering.

In addition, the investors' rights agreement provides for certain registration
rights that will survive the effectiveness of this registration statement. These
registration rights enable the holders of our equity securities to require us to
file a registration statement under the state and federal securities laws, or to
include their securities in a registration statement that we file under the
state and federal securities laws. These registration rights are described in
more detail in the subsection entitled "Registration Rights" within the section
entitled "Description of Capital Stock."

TERMS OF TRANSACTIONS

We believe that the transactions described in this section were made on terms no
less favorable than could have been obtained from third parties.

56
<PAGE> 60

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock will, upon the closing of this offering, consist of
70,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of
undesignated preferred stock, $0.001 par value. No other class of capital stock
will be authorized. The following information relates only to our amended and
restated certificate of incorporation, which will be adopted prior to the
closing of this offering.

COMMON STOCK

As of June 30, 2000, there were 17,916,525 shares of common stock outstanding,
held of record by approximately 147 stockholders, which reflects 13,491,056
shares of common stock outstanding (including the conversion of all outstanding
shares of preferred stock into common stock), the conversion of outstanding
Series DD convertible debentures into 2,727,263 shares of common stock, the
conversion of $5.1 million of Series EE convertible debentures sold on July 11,
2000 into 637,500 shares of common stock and the exercise of warrants for
1,060,706 shares of common stock. Upon the closing of this offering, we expect
to have 22,666,525 shares of our common stock issued and outstanding.

The holders of common stock are entitled to one vote per share on all matters
submitted to a vote of stockholders, including the election of directors. Our
common stock does not have cumulative voting rights, which means that the
holders of a majority of the outstanding common stock voting for the election of
directors can elect all directors then being elected. The holders of common
stock are entitled to receive dividends when, as and if declared by the board of
directors out of legally available funds. Upon liquidation or dissolution, the
holders of common stock will be entitled to share ratably in the assets legally
available for the distribution to stockholders after payment of liabilities and
subject to the prior rights of any holders of preferred stock then outstanding.
The holders of common stock have no conversion, sinking fund, redemption,
preemptive or subscription rights. The rights, preferences and privileges of
holders of common stock are subject to the rights of the holders of shares of
any series of preferred stock which we may issue in the future.

PREFERRED STOCK

Upon the closing of the offering, no shares of preferred stock will be issued
and outstanding.

Our board of directors may, without further action by our stockholders, from
time to time designate and direct the issuance of preferred stock in one or more
series. Our board may also, at the time of issuance, fix the dividend rights,
dividend rates, any conversion rights or right of exchange, any voting rights,
rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, the liquidation preferences, and any other rights,
preferences, privileges, and restrictions of any series of preferred stock and
the number of shares constituting such series and the designation thereof. We
have no present plans to issue any shares of preferred stock.

It is not possible to state the actual effect of the issuances of any shares of
preferred stock upon the rights of holders of the common stock until our board
of directors determines the specific rights of the holders of the preferred
stock. However, these effects might include:

- restricting dividends on the common stock;

- diluting the voting power of the common stock;

- impairing the liquidation rights of the common stock; and

- delaying or preventing a change in control of our company without
further action by the stockholders.

WARRANTS

In November 1995 and March 1997, in connection with our Series E convertible
preferred stock financing, we issued warrants to purchase up to 256,323 shares
of our common stock at an exercise price of $0.10 per

57
<PAGE> 61

share. As of June 30, 2000, warrants for 12,029 shares have been exercised. The
remaining 244,294 of these warrants expire after 5:00 p.m. on the earlier of:

- November 6, 2000;

- the closing date of this offering; or

- the closing date of a merger or consolidation of Repeater Technologies,
in which the holders of our voting power immediately prior to the merger
or consolidation do not hold a majority of the voting power of the
surviving entity.

In July 1997, in connection with an equipment lease agreement with Lighthouse
Capital Partners II, L.P., we issued warrants to purchase up to 18,940 shares of
our Series BB convertible preferred stock at an exercise price of $2.64 per
share. Each warrant contains provisions for the adjustment of the exercise price
and the aggregate number of shares issuable upon the exercise of the warrant in
the event of stock dividends, stock splits, reorganizations, reclassifications
and consolidations. Upon the closing of this offering, the warrants will become
exercisable for common stock at the rate of one share of common stock for each
share of Series BB convertible preferred stock underlying the warrants. These
warrants expire at the close of business on July 31, 2004.

In August 1997, in connection with our Series BB convertible preferred stock
financing, we issued warrants to purchase up to 816,412 shares of our Series BB
convertible preferred stock at an exercise price of $2.64 per share. Each
warrant contains provisions for the adjustment of the exercise price and the
aggregate number of shares issuable upon the exercise of the warrant in the
event of stock dividends, stock splits, reorganizations, reclassifications and
consolidations. These warrants expire after 5:00 p.m. on the earlier of:

- August 21, 2002;

- the closing date of this offering; or

In January 1999, in connection with a senior lease and security agreement with
Phoenix Leasing Incorporated, we issued warrants to purchase up to 3,955 shares
of our Series DD convertible preferred stock at an exercise price of $5.50 per
share. Each warrant contains provisions for the adjustment of the exercise price
and the aggregate number of shares issuable upon the exercise of the warrant in
the event of stock dividends, stock splits, reorganizations, reclassifications
and consolidations. Upon the closing of this offering, the warrants will become
exercisable for common stock at the rate of one share of common stock for each
share of Series DD convertible preferred stock underlying the warrants. These
warrants expire at the close of business on January 25, 2009 or five years after
the close of this offering.

In July 1999, in connection with a loan and security agreement with Transamerica
Business Credit Corporation, we issued warrants to purchase up to 100,000 shares
of our Series DD convertible preferred stock at an exercise price of $5.50 per
share. Each warrant contains provisions for the adjustment of the exercise price
and the aggregate number of shares issuable upon the exercise of the warrant in
the event of stock dividends, stock splits, reorganizations, reclassifications
and consolidations. Upon the closing of this offering, the warrants will become
exercisable for common stock at the rate of one share of common stock for each
share of Series DD convertible preferred stock underlying the warrants. These
warrants expire on July 8, 2006.

On July 11, 2000, in connection with our Series EE subordinated convertible
debenture financing, we issued warrants to purchase the number of shares of our
Series EE convertible preferred stock equal to $1,020,000 divided by the
conversion price, at an exercise price of $8.00 per share. The "conversion
price" is the lesser of $8.00 or the offering price of the initial public
offering of our common stock. Each warrant contains provisions for the
adjustment of the exercise price and the aggregate number of shares issuable

58
<PAGE> 62

upon the exercise of the warrant in the event of stock dividends, stock splits,
reorganizations, reclassifications and consolidations. These warrants expire at
the close of business on July 11, 2005.

REGISTRATION RIGHTS

Following this offering, holders of 17,060,745 shares of common stock and of
warrants exercisable for 250,395 shares of common stock will have certain rights
relating to the registration of these shares under state and federal securities
laws. These rights, which are assignable, are outlined in an agreement between
us and these holders. The holders of at least 35% of the common stock subject to
these rights may generally require that we register such stock for public resale
provided that the proposed aggregate selling offering price would exceed $10.0
million. If we register any of our common stock either for our own account or
for the account of other security holders, these holders may also include their
common stock subject to these rights in the registration, subject to the ability
of the underwriters to limit the number of shares included in the offering. The
holders of shares of our common stock that were issued upon conversion of our
Series A, B, C, D and E preferred stock and are issuable or were issued upon
conversion of our Series AA, BB, CC, DD and EE preferred stock may also require
us to register all or a portion of their common stock subject to these rights on
Form S-3, when use of this form becomes available; provided that among other
limitations, the proposed aggregate offering price would be at least $3.0
million. The registration rights of a holder terminate when the holder can offer
and sell all of his or her registrable securities pursuant to Rule 144.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF DELAWARE LAW AND OUR CERTIFICATE OF
INCORPORATION AND BYLAWS

Prior to the consummation of this offering, we will file our amended and
restated certificate of incorporation with the Secretary of State of the State
of Delaware. Some provisions of our amended and restated certificate of
incorporation, our bylaws and Delaware law could have the effect of
discouraging, delaying or preventing a merger or acquisition by a third party,
even if a merger or acquisition would be of benefit to our stockholders.

CLASSIFIED BOARD OF DIRECTORS. Our amended and restated certificate of
incorporation provides for the board of directors to be divided into three
classes of directors serving staggered three-year terms. As a result,
approximately one-third of the board of directors will be elected each year.
Holders of a majority of the outstanding shares of capital stock entitled to
vote in an election of directors will be able to remove directors only for
cause. Vacancies on the board of directors may be filled by the remaining
directors.

ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. Our bylaws establish an advance notice procedure for the
nomination, other than by or at the direction of our board of directors or one
of its committees, of candidates for election as director as well as for other
stockholder proposals to be considered at stockholders' meetings. Notice of
stockholder proposals and director nominations must be given timely and in
writing to our secretary prior to the meeting during which the matters are to be
acted upon or the directors are to be elected, and must contain certain
information specified in the bylaws. For notice to be timely, we must receive it
at our principal executive offices not more than 120 days nor less than 90 days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders.

BLANK CHECK PREFERRED. Our board of directors is authorized to issue up to
5,000,000 shares of preferred stock and to determine the preferences, rights and
privileges of those shares without any further vote or action by our
stockholders. The rights of the holders and the market value of our common stock
may be adversely affected by the rights of the holders of any series of
preferred stock that may be issued in the future. Furthermore, our board could,
without stockholder approval, use our preferred stock to adopt a "poison pill"
takeover defense mechanism.

DELAWARE ANTI-TAKEOVER STATUTE. Upon the listing of our common stock on the
Nasdaq National Market, we will be subject to Section 203 of the Delaware
General Corporation Law, an anti-takeover statute. In general, Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years
following the date the person became an interested stockholder, unless, with
certain exceptions, the "business combination" or the
59
<PAGE> 63

transaction in which the person became an interested stockholder is approved in
a prescribed matter. Generally, a "business combination" includes a merger,
asset or stock sale, or other transaction resulting in a financial benefit to
the interested stockholder. Generally, an "interested stockholder" is a person
who, together with affiliates and associates, owns, or has, within three years
prior to the determination of interested stockholder status, owned 15% or more
of a corporation's voting stock. The existence of this provision could have an
anti-takeover effect with respect to transactions not approved in advance by our
board of directors, including discouraging takeover attempts that might result
in you receiving a premium over the market price for your shares of common
stock.

NASDAQ NATIONAL MARKET LISTING

We have been approved for listing on the Nasdaq Stock Market's National Market
under the symbol "RPTR."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is U.S. Stock Transfer
Corporation. Their telephone number is (818)502-1404.

60
<PAGE> 64

SHARES ELIGIBLE FOR FUTURE SALE

Immediately prior to this offering, there was no public market for our common
stock. Future sales of substantial amounts of our common stock in the public
market following this offering could adversely affect the market price of our
common stock. As described below, no shares currently outstanding will be
available for sale immediately after this offering because of contractual
restrictions on resale. Sales of substantial amounts of our common stock in the
public market after the restrictions lapse, or are released, could adversely
affect the prevailing market price and impair our ability to raise equity
capital in the future.

Upon completion of this offering, we will have outstanding an aggregate of
22,666,525 shares of common stock, or 23,379,025 shares if the underwriter's
over-allotment option is exercised in full, in each case assuming no exercise of
outstanding options or warrants after June 30, 2000. All of the shares sold in
this offering will be freely tradable without restrictions or further
registration under the Securities Act, except for any shares purchased by our
"affiliates," as that term is defined in Rule 144 under the Securities Act.
Shares purchased by our affiliates may generally only be sold pursuant to an
effective registration statement under the Securities Act or in compliance with
limitations of Rule 144 as described below.

The remaining 17,916,525 shares of common stock held by existing stockholders
are restricted securities within the meaning of Rule 144 and were issued and
sold by us in reliance on exemptions from the registration requirements of the
Securities Act. These restricted securities and an additional 3,914,886 shares
issuable upon the exercise of outstanding options and 250,395 shares issuable
upon exercise of outstanding warrants represent approximately 82.3%, or 80.2% if
the underwriters' over-allotment option is exercised in full, of the total
shares of our common stock outstanding immediately following this offering on a
fully-diluted basis, and may be sold in the public market only if registered or
if they qualify for an exemption from registration under Rule 144, 144(k) or 701
promulgated under the Securities Act, which are summarized below.

Our officers, directors, employees, and other stockholders, who collectively
hold substantially all of our existing shares, and U.S. Bancorp Piper Jaffray
have entered into lock-up agreements in connection with this offering. These
lock-up agreements provide that, for a period of 180 days after the date of this
offering, the directors, employees, and stockholders may not to offer, sell,
contract to sell, pledge or otherwise dispose of any of the shares of common
stock or any of our securities convertible into or exchangeable for common stock
other than shares of common stock disposed of as bona fide gifts approved by
U.S. Bancorp Piper Jaffray. Notwithstanding possible earlier eligibility for
sale under the provisions of Rules 144, 144(k) and 701, shares subject to
lock-up agreements will not be saleable until such agreements expire or are
waived by U.S. Bancorp Piper Jaffray. U.S. Bancorp Piper Jaffray has no present
intent or arrangements to waive or release any shares subject to these lock-up
agreements. The release of any lock-up is considered on a case by case basis.
Factors in deciding whether to release shares may include the length of time
before the lock-up expires, the number of shares involved, the reason for the
requested release, market conditions, the trading price of our common stock,
historical trading volumes of our common stock and whether the person seeking
the release is an officer, director or affiliate of Repeater.

RULE 144

In general, under Rule 144 as currently in effect, a person, or persons whose
shares must be aggregated, who has beneficially owned restricted shares for at
least one year, including persons who are affiliates, would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of:

- one percent of the then outstanding shares of our common stock,
approximately 226,665 shares immediately after this offering; or

- the reported average weekly trading volume of our common stock during
the four calendar weeks preceding a sale by such person.
61
<PAGE> 65

Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements, and the availability of current public information about
us.

RULE 144(k)

Under Rule 144(k), a person who has beneficially held restricted shares for a
minimum of two years and who is not, and for three months prior to the sale of
those shares has not been, one of our affiliates is free to sell those shares
immediately following this offering without complying with the volume,
manner-of-sale, public notice and other limitations contained in Rule 144.
However, our transfer agent may require an opinion of counsel that a proposed
sale of shares comes within the terms of Rule 144 of the Securities Act prior to
effecting a transfer of the shares. Upon completion of this offering, holders of
7,535,363 shares will be eligible to freely sell their shares under Rule 144(k),
substantially all of which are subject to a 180 day lock-up agreement with U.S.
Bancorp Piper Jaffray.

RULE 701

In general, under Rule 701, any of our employees, directors, officers, or
consultants who purchase shares from us in connection with a compensatory stock
or option plan or other written agreement before the effective date of this
offering is entitled to sell these shares 180 days after the effective date of
this offering in reliance on Rule 144. Rule 701 provides that affiliates may
sell their Rule 701 shares under Rule 144 without having to comply with the
holding period and notice filing requirements of Rule 144 and that non-
affiliates may sell these shares in reliance on Rule 144 without having to
comply with the holding period, public information, volume limitation or notice
filing requirements of Rule 144.

REGISTRATION RIGHTS

Subject to the 180 day lock-up restrictions described above, the holders of
17,060,745 shares of common stock, including 9,308,626 shares held by
affiliates, and of warrants exercisable for 250,395 shares of common stock, have
rights to require us to register their shares for sale under the Securities Act,
as described in this prospectus under the heading "Description of Capital
Stock -- Registration Rights."

OPTIONS

As of June 30, 2000, options to acquire 3,914,886 shares of our common stock are
outstanding. Immediately after the completion of this offering, we intend to
file a registration statement on Form S-8 under the Securities Act to register
all of the shares of common stock issued or reserved for future issuance under
our 1990 incentive stock plan, key executives stock option plan, 2000 equity
incentive plan and 2000 employee stock purchase plan. Based upon the number of
shares subject to outstanding options as of June 30, 2000 and currently reserved
for issuance under these stock option and purchase plans, this registration
statement would cover approximately 6,966,036 shares, in addition to the annual
increases in the number of shares available under our 2000 equity incentive plan
and 2000 employee stock purchase plan pursuant to the terms of those plans.
After the effective date of the registration statement on Form S-8 and, if
applicable, the expiration of the 180 day lock-up period related to this
offering, shares purchased upon exercise of options granted pursuant to our 1990
incentive stock plan, the key executives incentive plan, our 2000 equity
incentive plan and the 2000 employee stock purchase plan generally will be
available for resale in the public market by non-affiliates without restriction.
Sales by our affiliates of shares registered on this registration statement will
be subject to all of the Rule 144 restrictions, except for the one-year holding
period requirement.

62
<PAGE> 66

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. PERSONS

The following is a general discussion of the material U.S. federal income tax
consequences of the purchase, ownership and disposition of our common stock to a
non-U.S. person. For the purpose of this discussion, a non-U.S. person is any
holder that for U.S. federal income tax purposes is not a U.S. person. For
purposes of this discussion, the term U.S. person means:

- a citizen or resident of the U.S.;

- a corporation or other entity taxable as a corporation and created or
organized in the U.S. or under the laws of the U.S. or any political
subdivision thereof;

- an estate whose income is included in gross income for U.S. federal
income tax purposes regardless of its source; or

- a trust whose administration is subject to the primary supervision of a
U.S. court and which has one or more U.S. persons who have the authority
to control all substantial decisions of the trust.

Additionally, this discussion does not address U.S. federal income tax
consequences to non-U.S. persons subject to special treatment under U.S. federal
income tax law, such as:

- U.S. expatriates;

- financial institutions;

- dealers in securities;

- insurance companies;

- tax-exempt entities;

- holders who acquire our common stock pursuant to the exercise of any
employee stock option or right or otherwise as compensation;

- holders who hold our common stock as qualified small business stock for
purposes of Section 1202 of the Internal Revenue Code of 1986, as
amended;

- holders who do not hold our common stock as a capital asset; or

- holders who hold our common stock as part of a hedge, straddle,
conversion or other risk reduction transaction.

Nor does this discussion address any tax consequences arising under the laws of
any state, local or non-U.S. taxing jurisdiction. Furthermore, the following
discussion is based on current provisions of the Internal Revenue Code, the
Treasury Regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect on the date hereof, and all of which
are subject to change, possibly with retroactive effect. We have not requested a
ruling from the IRS or an opinion of counsel with respect to the federal income
tax consequences of the purchase, ownership and disposition of our common stock
to a non-U.S. person under the Internal Revenue Code. ACCORDINGLY, EACH NON-U.S.
PERSON SHOULD CONSULT A TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL AND
NON-U.S. INCOME AND OTHER TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING
OF SHARES OF OUR COMMON STOCK.

DIVIDENDS

We have never paid dividends on our common stock and do not expect to pay any
cash dividends on our common stock for the foreseeable future. In the event,
however, that we do pay dividends on our common stock, any dividend paid to a
non-U.S. person of common stock generally will be subject to U.S. withholding
tax either at a rate of 30% of the gross amount of the dividend or such lower
rate as may be specified by an applicable tax treaty. Dividends received by a
non-U.S. person that are effectively connected with a U.S. trade or business
conducted by the non-U.S. person are exempt from such

63
<PAGE> 67

withholding tax. However, those effectively connected dividends, net of certain
deductions and credits, are taxed at the same graduated rates applicable to U.S.
persons.

In addition to the graduated tax described above, dividends received by a
corporate non-U.S. person that are effectively connected with a U.S. trade or
business of the corporate non-U.S. person may also be subject to a branch
profits tax at a rate of 30% or such lower rate as may be specified by an
applicable tax treaty.

A non-U.S. person of common stock that is eligible for a reduced rate of
withholding tax pursuant to a tax treaty may obtain a refund of any excess
amounts currently withheld by filing an appropriate claim for refund with the
IRS.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. person generally will not be subject to U.S. federal income tax on
any gain realized upon the sale or other disposition of our common stock unless:

- the gain is effectively connected with a U.S. trade or business of the
non-U.S. person (which gain, in the case of a corporate non-U.S. person,
must also be taken into account for branch profits tax purposes);

- the non-U.S. person is an individual who holds his or her common stock
as a capital asset (generally, an asset held for investment purposes)
and who is present in the U.S. for a period or periods aggregating 183
days or more during the calendar year in which the sale or disposition
occurs and certain other conditions are met; or

- we are or have been a "United States real property holding corporation"
for U.S. federal income tax purposes at any time within the shorter of
the five-year period preceding the disposition or the holder's holding
period for our common stock. We have determined that we are not and do
not believe that we will become a "United States real property holding
corporation" for U.S. federal income tax purposes.

BACKUP WITHHOLDING AND INFORMATION REPORTING

Generally, we must report annually to the IRS the amount of dividends paid, the
name and address of the recipient, and the amount, if any, of tax withheld. A
similar report is sent to the holder. Pursuant to tax treaties or other
agreements, the IRS may make its reports available to tax authorities in the
recipient's country of residence.

Dividends paid to a non-U.S. person at an address within the U.S. may be subject
to backup withholding at a rate of 31% if the non-U.S. person fails to establish
that it is entitled to an exemption or to provide a correct taxpayer
identification number and other information to the payer. Backup withholding
generally will not apply to dividends paid to non-U.S. persons at an address
outside the U.S. on or prior to December 31, 2000 unless the payer has knowledge
that the payee is a U.S. person. Under recently finalized Treasury Regulations
regarding withholding and information reporting, payment of dividends to
non-U.S. persons at an address outside the U.S. after December 31, 2000 may be
subject to backup withholding at a rate of 31% unless such non-U.S. person
satisfies various certification requirements.

Under current Treasury Regulations, the payment of the proceeds of the
disposition of common stock to or through the U.S. office of a broker is subject
to information reporting and backup withholding at a rate of 31% unless the
holder certifies its non-U.S. status under penalties of perjury or otherwise
establishes an exemption. Generally, the payment of the proceeds of the
disposition by a non-U.S. person of common

64
<PAGE> 68

stock outside the U.S. to or through a foreign office of a broker will not be
subject to backup withholding but will be subject to information reporting
requirements if the broker is:

- a U.S. person;

- a "controlled foreign corporation" for U.S. federal income tax purposes;
or

- a foreign person 50% or more of whose gross income for certain periods
is from the conduct of a U.S. trade or business

unless the broker has documentary evidence in its files of the holder's non-U.S.
status and certain other conditions are met, or the holder otherwise establishes
an exemption. Neither backup withholding nor information reporting generally
will apply to a payment of the proceeds of a disposition of common stock by or
through a foreign office of a foreign broker not subject to the preceding
sentence.

In general, the recently promulgated final Treasury Regulations, described
above, do not significantly alter the substantive withholding and information
reporting requirements but would alter the procedures for claiming benefits of
an income tax treaty and change the certifications procedures relating to the
receipt by intermediaries of payments on behalf of the beneficial owner of
shares of common stock. Non-U.S. persons should consult their tax advisors
regarding the effect, if any, of those final Treasury Regulations on an
investment in our common stock. Those final Treasury Regulations generally are
effective for payments made after December 31, 2000.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the IRS.

65
<PAGE> 69

UNDERWRITING

The underwriters named below have agreed to buy, subject to the terms of the
purchase agreement, the number of shares listed opposite their names below. The
underwriters are committed to purchase and pay for all of the shares if any are
purchased.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
U.S. Bancorp Piper Jaffray Inc. ...................... 2,040,000
Banc of America Securities LLC........................ 1,360,000
Bear, Stearns & Co. Inc. ............................. 150,000
Chase Securities Inc. ................................ 150,000
CIBC World Markets Corp. ............................. 150,000
Dain Rauscher Incorporated............................ 150,000
Deutsche Bank Securities Inc. ........................ 150,000
FleetBoston Robertson Stephens Inc. .................. 150,000
PaineWebber Incorporated.............................. 150,000
Prudential Securities Incorporated.................... 150,000
Thomas Weisel Partners LLC............................ 150,000
---------
Total....................................... 4,750,000
=========
</TABLE>

The underwriters have advised us that they propose to offer the shares to the
public at $9.00 per share. The underwriters propose to offer the shares to
certain dealers at the same price less a concession of not more than $0.37 per
share. The underwriters may allow and the dealers may reallow a concession on
not more than $0.10 per share on sales to certain other brokers and dealers.
After the offering, these figures may be changed by the underwriters.

The representatives have advised us that the underwriters do not intend to
confirm any sales to any accounts over which they exercise discretionary
authority.

We have granted to the underwriters an option to purchase up to an additional
712,500 shares of common stock from us at the same price to the public, and with
the same underwriting discount, as set forth in the table above. The
underwriters may exercise this option any time during the 30-day period after
the date of this prospectus, but only to cover over-allotments, if any. To the
extent the underwriters exercise the option, each underwriter will become
obligated, subject to certain conditions, to purchase approximately the same
percentage of the additional shares as it was obligated to purchase under the
purchase agreement.

At our request, the underwriters will reserve up to 237,500 shares of our common
stock to be sold, at the initial public offering price, to our directors,
officers and employees, as well as to some of our customers and suppliers and
other persons associated with us. This directed share program will be
administered by U.S. Bancorp Piper Jaffray. The number of shares of common stock
available for sale to the general public will be reduced to the extent these
individuals purchase reserved shares. Any reserved shares which are not so
purchased will be offered by the underwriters to the general public on the same
basis as the other shares offered by this prospectus. We have agreed to
indemnify the underwriters against certain liabilities and expenses, including
liabilities under the Securities Act of 1933, in connection with sales of the
directed shares.

We and each of our directors, executive officers and certain principal
shareholders have agreed to certain restrictions on our ability to sell
additional shares of our common stock for a period of 180 days after the date of
this prospectus. We have agreed not to directly or indirectly offer for sale,
sell, contract to sell, grant any option for the sale of, or otherwise issue or
dispose of, any shares of common stock, options or warrants to acquire shares of
common stock, or any related security or instrument, without the prior written
consent of U.S. Bancorp Piper Jaffray. The agreements provide exceptions for, in
the case of Repeater, issuances or sales of shares pursuant to any employee
stock option or stock ownership or dividend reinvestment plans of Repeater in
effect at the time the underwriting agreement is signed,

66
<PAGE> 70

common stock issuable upon conversion of securities or the exercise of warrants
outstanding at the time the underwriting agreement is signed and the issuance of
common stock or any securities convertible into common stock in connection with
a merger or acquisition of assets by Repeater, provided that such merger or
acquisition does not occur within 75 days following the date of this prospectus
and the recipients of those securities agree to a lock-up for a period beginning
from the date of such merger or acquisition and continuing until the date 180
days after the date of this prospectus. In the case of officers, directors and
shareholders, the agreements provide exceptions for shares of common stock
disposed of as bona fide gifts approved by U.S. Bancorp Piper Jaffray. U.S.
Bancorp Piper Jaffray, in its sole discretion, may release any of the securities
subject to these lock-up agreements at any time without notice.

U.S. Bancorp Piper Jaffray has no present intent or arrangement to release any
of the securities subject to these lock-up agreements. The release of any
lock-up is considered on a case by case basis. Factors in deciding whether to
release shares may include the length of time before the lock-up expires, the
number of shares involved, the reason for the requested release, market
conditions, the trading price of our common stock, historical trading volumes of
our common stock and whether the person seeking the release is an officer,
director or affiliate of Repeater.

Prior to the offering, there has been no established trading market for our
common stock. The initial public offering price was determined by negotiation
between us and the underwriters. The factors considered in determining the
initial public offering price included:

- the history of and the prospects for the industry in which we compete;

- our past and present operations;

- our historical results of operations;

- our prospects for future earnings;

- the recent market prices of securities of generally comparable
companies;

- the general condition of the securities markets at the time of the
offering; and

- other relevant factors.

We cannot assure you that the initial public offering price of the common stock
will correspond to the price at which the common stock will trade in the public
market subsequent to this offering or that an active public market for the
common stock will develop and continue after this offering.

The shares of common stock have been approved for listing on the Nasdaq Stock
Market's National Market under the symbol "RPTR."

The following table shows the underwriting discount that we will pay to the
underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the underwriters' option to purchase
additional shares of common stock.

<TABLE>
<CAPTION>
NO EXERCISE FULL EXERCISE
----------- -------------
<S> <C> <C>
Per share............................................. $ 0.63 $ 0.63
Total................................................. $2,992,500 $3,441,375
</TABLE>

We estimate that our total expenses for this offering, excluding the
underwriting discount, will be $2,051,000.

The expenses consist of the following:

- an SEC registration fee of $14,421;

- an NASD filing fee of $5,963;

- a Nasdaq application fee of $95,000;

- estimated printing and engraving expenses of $275,000;

- estimated legal fees and expenses of $600,000;

67
<PAGE> 71

- estimated accounting fees and expenses of $1,000,000;

- estimated transfer agent and registrar fees of $50,000; and

- estimated blue sky qualification and miscellaneous fees and expenses of
$10,616.

CIBC World Markets Corp. has been paid $350,000 and is expected to be included
as a member of the underwriting syndicate for the offering in consideration for
the termination of an engagement letter for the provision of financial advisory
services. Repeater will also use its best efforts to cause CIBC World Markets
Corp. to be allocated 250,000 shares in this offering.

In connection with this offering, U.S. Bancorp Piper Jaffray, on behalf of the
underwriters, may purchase and sell shares of common stock in the open market.
These transactions may include over-allotment, syndicate covering transactions
and stabilizing transactions. Over-allotment involves syndicate sales of common
stock in excess of the number of shares to be purchased by the underwriters in
this offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of our common stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Stabilizing transactions consist of certain bids for or purchases of common
stock made to prevent or retard a decline in the market price of the common
stock while this offering is in progress.

The underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when U.S.
Bancorp Piper Jaffray, in covering syndicate short positions or making
stabilizing purchases, repurchases common stock originally sold by that
syndicate member.

Any of these activities may cause the price of our common stock to be higher
than it would otherwise be in the open market in the absence of such
transactions. U.S. Bancorp Piper Jaffray may effect these transactions on the
Nasdaq National Market or in the over-the-counter market, or otherwise and may
discontinue them at any time.

A prospectus in electronic format may be made available on the websites
maintained by one or more of the underwriters. The underwriters may agree to
allocate a number of shares to underwriters for sale to their online brokerage
account holders. The representatives will allocate shares to underwriters that
may make Internet distributions on the same basis as other allocations.

The representatives or their respective affiliates may in the future perform
various investment banking and advisory services for us from time to time, for
which they will receive customary fees. The representatives may, from time to
time, engage in transactions with and perform services for us in the ordinary
course of business.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make with respect to any of those
liabilities.

LEGAL MATTERS

The validity of our common stock related to this offering will be passed upon
for us by Cooley Godward LLP, Palo Alto, California and legal matters relating
to the common stock in this offering will be passed upon for the underwriters by
Shearman & Sterling, New York, New York. An investment partnership of Cooley
Godward attorneys and specialists beneficially own an aggregate of 17,850 shares
of our common stock.

EXPERTS

The consolidated financial statements of Repeater Technologies, Inc. as of March
26, 1999 and March 31, 2000 and for each of the three years in the period ended
March 31, 2000 and included in this prospectus

68
<PAGE> 72

have been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The financial statements of The Gwydion Company, LLC as of December 31, 1998 and
September 30, 1999 and for the year ended December 31, 1998, for the nine months
ended September 30, 1999 and for the period from December 6, 1996 (date of
inception) to September 30, 1999 included in this prospectus have been so
included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

CHANGE IN INDEPENDENT ACCOUNTANTS

On January 12, 2000, we engaged PricewaterhouseCoopers LLP as our independent
accountants to replace Ernst & Young LLP, who we dismissed as our independent
accountants effective January 10, 2000. The decision to change accountants was
approved by our board of directors upon the recommendation of the audit
committee.

The reports of Ernst & Young on our financial statements for the 1997, 1998 and
1999 fiscal years, which are not included herein and are not made part of the
registration statement, did not contain any adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles. In connection with the audits of our financial statements
for the fiscal years ended March 31, 1997, March 31, 1998 and March 31, 1999 and
in the subsequent interim period preceding the dismissal of Ernst & Young, there
were no disagreements with Ernst & Young on any matters of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure
which, if not resolved to the satisfaction of Ernst & Young would have caused
Ernst & Young to make a reference to the matter in their report. During the two
most recent fiscal years and subsequent interim period preceding the dismissal
of Ernst & Young, we have not been advised of any matters described in
Regulation S-K, Item 304(a)(1)(v) of the Securities Act. We requested that Ernst
& Young furnish us with a letter addressed to the SEC stating whether or not
they agree with the above statements. A copy of such letter is filed as an
exhibit to the registration statement which includes this prospectus.

Prior to engaging PricewaterhouseCoopers LLP as our new independent accountants:

- we did not request any advice from PricewaterhouseCoopers LLP regarding
any matter related to accounting practice or accounting principles; and

- we did not consult with PricewaterhouseCoopers LLP regarding the type of
audit opinion that might be rendered by them or items that were or
should have been subject to the AICPA's Statement on Auditing Standards
No. 50, "Reports on the Application of Accounting Principles."

We have requested that PricewaterhouseCoopers LLP review the above disclosures
regarding our change in accountants and have given them the opportunity to
furnish us with a letter addressed to the SEC in which PricewaterhouseCoopers
LLP may include new information, clarify our statements on the change in
accountants or disclose the respects in which they disagree with the statements
made by us in this prospectus regarding our change in accountants. If
PricewaterhouseCoopers LLP elects to submit such a letter to the SEC, we will
file the letter as an exhibit to the registration statement when received.

69
<PAGE> 73

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 with the SEC under the
Securities Act with respect to the shares offered in this offering. This
prospectus, which constitutes a part of the registration statement, does not
contain all the information set forth in the registration statement, parts of
which are omitted as permitted by the rules and regulations of the Commission.
For further information pertaining to us and our common stock, we refer you to
our registration statement and the exhibits and schedules thereto, copies of
which may be inspected without charge at the public reference section of the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain information on the operation of the public reference room
by calling the SEC at 1 800 SEC-0330. Copies of all or any portion of the
registration statement may be obtained from the SEC at prescribed rates. In
addition, the SEC maintains a web site that contains reports and other
information that is filed through the Commission's EDGAR System. The web site
can be accessed at http://www.sec.gov.

We intend to furnish our stockholders with annual reports containing audited
financial statements and an opinion thereon expressed by independent certified
public accountants. We also intend to furnish other reports as we may determine
or as required by law.

70
<PAGE> 74

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPEATER TECHNOLOGIES, INC.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements of Operations....................... F-4
Consolidated Statement of Stockholders' Equity (Deficit).... F-5
Consolidated Statements of Cash Flows....................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-24
Balance Sheets.............................................. F-25
Statements of Operations.................................... F-26
Statements of Members' Deficit.............................. F-27
Statements of Cash Flows.................................... F-28
Notes to Financial Statements............................... F-29
</TABLE>

PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Unaudited Pro Forma Combined Condensed Statements of
Operations................................................ F-32
Notes to the Unaudited Pro Forma Combined Condensed
Statements of Operations.................................. F-34
</TABLE>

F-1
<PAGE> 75

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Repeater Technologies, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity (deficit) and of
cash flows present fairly, in all material respects, the financial position of
Repeater Technologies, Inc. and its subsidiary at March 26, 1999 and March 31,
2000 and the results of their operations and their cash flows for each of the
three years in the period ended March 31, 2000 in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PricewaterhouseCoopers LLP

San Jose, California
May 16, 2000, except for Note 12 as to which the date is July 11, 2000

F-2
<PAGE> 76

REPEATER TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

ASSETS

<TABLE>
<CAPTION>
PRO FORMA
MARCH 26, MARCH 31, MARCH 31,
1999 2000 2000
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 10,358 $ 4,823 $ 12,104
Accounts receivable, net of allowance for doubtful
accounts of $820 and $255 at March 26, 1999 and March
31, 2000, respectively................................. 1,822 4,383 4,383
Inventories, net.......................................... 2,640 3,052 3,052
Other current assets...................................... 103 1,280 1,280
-------- -------- --------
Total current assets.............................. 14,923 13,538 20,819
Service parts, net.......................................... 295 330 330
Property and equipment, net................................. 1,848 2,168 2,168
Intangible assets, net...................................... -- 29 29
Other assets................................................ 136 152 152
-------- -------- --------
Total assets...................................... $ 17,202 $ 16,217 $ 23,498
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... 1,422 4,291 4,291
Accrued compensation...................................... 537 574 574
Other accrued liabilities................................. 934 1,019 1,019
Deferred revenue.......................................... -- 1,363 1,363
Current portion of notes payable.......................... 140 1,232 1,232
Current portion of capital lease obligations.............. 311 418 418
-------- -------- --------
Total current liabilities......................... 3,344 8,897 8,897
Deferred revenue, net of current portion.................... -- 339 339
Notes payable, net of current portion....................... -- 3,078 3,078
Capital lease obligations, net of current portion........... 501 507 507
Convertible subordinated debentures......................... 15,000 15,000 --
-------- -------- --------
Total liabilities................................. 18,845 27,821 12,821
-------- -------- --------
Commitments (note 3)
Stockholders' equity (deficit):
Convertible preferred stock, $0.001 par value; 14,210,077
shares authorized at March 26, 1999 and March 31, 2000;
9,874,691, issued and outstanding; none issued and
outstanding pro forma.................................. 10 10 --
Common Stock, $0.001 par value; 30,000,000 shares
authorized; 2,407,063 and 3,316,309 shares issued and
outstanding at March 26, 1999 and March 31, 2000,
respectively; and 17,866,740 pro forma................. 2 3 18
Additional paid in capital................................ 39,935 54,555 76,831
Unearned stock-based compensation......................... (755) (10,297) (10,297)
Accumulated deficit....................................... (40,835) (55,875) (55,875)
-------- -------- --------
Total stockholders' equity (deficit).............. (1,643) (11,604) 10,677
-------- -------- --------
Total liabilities and stockholders' equity
(deficit)....................................... $ 17,202 $ 16,217 $ 23,498
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 77

REPEATER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Net revenues............................................... $ 7,770 $ 9,612 $ 16,953
Cost of revenues........................................... 8,807 8,883 12,145
-------- -------- --------
Gross profit (loss)........................................ (1,037) 729 4,808
-------- -------- --------
Operating expenses:
Research and development................................. 6,214 4,258 7,349
Sales and marketing...................................... 3,936 4,514 7,075
General and administrative............................... 1,520 2,227 2,997
In-process research and development...................... -- -- 885
-------- -------- --------
Total operating expenses......................... 11,670 10,999 18,306
-------- -------- --------
Loss from operations....................................... (12,707) (10,270) (13,498)
Other income (expense), net................................ 79 (300) (1,542)
-------- -------- --------
Net loss................................................... $(12,628) $(10,570) $(15,040)
======== ======== ========
Net loss per common share -- basic and diluted............. $ (5.31) $ (4.47) $ (6.00)
======== ======== ========
Shares used in net loss per common share
calculation -- basic and diluted......................... 2,376 2,367 2,508
======== ======== ========
Pro forma net loss per common share -- basic and diluted
(unaudited)(note 10)..................................... $ (0.98)
========
Shares used in pro forma net loss per common share
calculation -- basic and diluted (unaudited)(note 10).... 15,352
========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 78

REPEATER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MARCH 27, 1998, MARCH 26, 1999 AND MARCH 31, 2000
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
CONVERTIBLE TOTAL
PREFERRED STOCK COMMON STOCK ADDITIONAL UNEARNED STOCKHOLDERS'
------------------ ------------------ PAID-IN STOCK-BASED ACCUMULATED EQUITY
SHARES AMOUNT SHARES AMOUNT CAPITAL COMPENSATION DEFICIT (DEFICIT)
--------- ------ --------- ------ ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at March 31, 1997.... 4,633,416 5 2,428,986 2 24,643 -- (17,637) 7,013
Issuance of Series BB
convertible preferred stock,
less issuance costs of
$17......................... 838,368 1 -- -- 2,195 -- -- 2,196
Issuance of Series CC
convertible preferred stock,
less issuance costs of
$37......................... 4,402,907 4 -- -- 12,067 -- -- 12,071
Repurchase of common stock
under stock option plan, net
of exercise of stock
options..................... -- -- (25,384) -- (13) -- -- (13)
Issuance of common stock from
exercise of warrants........ -- -- 456 -- -- -- -- --
Net loss...................... -- -- -- -- -- -- (12,628) (12,628)
--------- --- --------- --- ------- -------- -------- --------
Balances at March 27, 1998.... 9,874,691 10 2,404,058 2 38,892 -- (30,265) 8,639
Exercise of stock options..... -- -- 2,430 -- 1 -- -- 1
Issuance of common stock under
license agreement........... -- -- 575 -- 1 -- -- 1
Unearned stock-based
compensation................ -- -- -- -- 1,041 (1,041) -- --
Amortization of unearned
stock-based compensation.... -- -- -- -- -- 286 -- 286
Net loss...................... -- -- -- -- -- (10,570) (10,570)
--------- --- --------- --- ------- -------- -------- --------
Balances at March 26, 1999.... 9,874,691 10 2,407,063 2 39,935 (755) (40,835) (1,643)
Exercise of stock options, net
of repurchases.............. -- -- 334,102 -- 109 -- -- 109
Issuance of common stock for
acquisition................. -- -- 573,334 1 6,879 (6,880) -- --
Issuance of common stock under
license agreement........... -- -- 1,810 -- 7 -- -- 7
Issuance of warrants in
connection with line of
credit...................... -- -- -- -- 542 -- -- 542
Unearned stock-based
compensation................ -- -- -- -- 7,083 (7,083) -- --
Amortization of unearned
stock-based compensation.... -- -- -- -- -- 4,421 -- 4,421
Net loss...................... -- -- -- -- -- -- (15,040) (15,040)
--------- --- --------- --- ------- -------- -------- --------
Balances at March 31, 2000.... 9,874,691 $10 3,316,309 $ 3 $54,555 $(10,297) $(55,875) $(11,604)
========= === ========= === ======= ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 79

REPEATER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................... $(12,628) $(10,570) $(15,040)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization............................. 738 929 1,053
Provision for losses on accounts receivable............... 142 713 97
Provision for writedowns on inventories................... 1,100 565 339
Issuance of equity instruments under license agreement.... -- 1 7
Amortization of unearned stock-based compensation......... -- 286 4,421
Amortization of debt issuance costs....................... -- -- 16
Amortization of debt discount............................. -- -- 135
In process research and development....................... -- -- 885
Changes in operating assets and liabilities, net of
acquisitions:
Accounts receivable..................................... 1,568 (2,252) (2,659)
Inventories............................................. (1,273) 335 (850)
Other current assets.................................... 37 (21) (1,178)
Service parts........................................... (133) (347) (397)
Other assets............................................ (8) (76) (16)
Accounts payable........................................ 150 (701) 2,869
Accrued compensation.................................... 10 54 37
Other accrued liabilities............................... 445 220 84
Deferred revenue........................................ -- -- 1,702
-------- -------- --------
Net cash used in operating activities............... (9,852) (10,864) (8,495)
-------- -------- --------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment........................ (105) (554) (507)
Payment for acquired business............................. -- -- (754)
-------- -------- --------
Net cash used in investing activities............... (105) (554) (1,261)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank line of credit......................... 405 1,151 --
Principal payments on bank line of credit................. (1,171) (1,386) --
Proceeds from notes payable............................... -- -- 5,000
Principal payments on notes payable....................... (136) (564) (423)
Payments on capital lease obligations..................... (259) (528) (465)
Proceeds from convertible subordinated debentures......... -- 15,000 --
Proceeds from issuance of convertible preferred stock and
warrants, less issuance costs........................... 14,267 -- --
Net issuances (repurchase) of common stock................ (13) 1 109
-------- -------- --------
Net cash provided by financing activities........... 13,093 13,674 4,221
-------- -------- --------
Net increase/(decrease) in cash and cash equivalents........ 3,136 2,256 (5,535)
Cash and cash equivalents at beginning of the year.......... 4,966 8,102 10,358
-------- -------- --------
Cash and cash equivalents at end of the year................ $ 8,102 $ 10,358 $ 4,823
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.................................... $ 158 $ 579 $ 1,782
Taxes paid................................................ $ 2 $ 1 $ 2
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Equipment purchased under capital lease obligations....... $ 475 $ 465 $ 579
Conversion of accrued liabilities and accounts payable to
notes payable........................................... $ 995 $ -- $ --
Issuance of shares for acquired business.................. $ -- $ -- $ 6,880
Issuance of warrants with notes payable................... $ -- $ -- $ 542
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE> 80

REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

ORGANIZATION

Repeater Technologies, Inc. (the "Company"), formerly Peninsula Wireless
Communications, was formed in October 1983. The Company's name was changed to
Repeater Technologies, Inc. in January 1997. The Company's principal activity is
the development, marketing and selling of products primarily for CDMA-based
wireless communications networks.

FISCAL YEAR

The Company ends its fiscal year on the last Friday in March.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

The Company's cash and cash equivalents are maintained at a major US financial
institution. Deposits in this institution may exceed the amount of insurance
provided on such deposits.

The Company's customers are providers of wireless communications services. The
Company performs periodic credit evaluations of these customers and generally
does not require collateral for its domestic customers. For international
customers, the Company requires letters of credit prior to shipment or obtains
credit insurance for sales on open accounts. The Company maintains reserves for
potential credit losses and such losses have historically been within
management's expectations.

During the year ended March 27, 1998 two customers accounted for 18% and 15% of
net revenues, respectively. During the year ended March 26, 1999 one customer
accounted for 11% of net revenues. During the year ended March 31, 2000 three
customers each accounted for 14%, 12% and 10% of net revenues, respectively.

As of March 26, 1999 one customer accounted for 25% of total receivables. As of
March 31, 2000 three customers accounted for 18%, 16% and 15% of total
receivables, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121;
Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of; the Company regularly evaluates its long-lived assets for
indicators of possible impairment by comparison of the carrying amounts to
undiscounted estimated cash flows to be generated by such assets. Should an
impairment exist, the impairment loss would be measured based on the excess
carrying value of the asset over the asset's fair value or discounted estimates
of future cash flows. The Company has not identified any such impairment losses
to date.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments, including accounts receivable and
accounts payable, approximate their carrying value due to their relatively short
maturities. The fair values of equipment financing notes payable and convertible
subordinate debentures were estimated using discounted cash flow analysis, based
on the Company's current incremental borrowing rate for similar types of
borrowing arrangements and approximate their carrying values.

F-7
<PAGE> 81
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER COMPREHENSIVE INCOME

The Company has adopted the provisions of SFAS 130, "Reporting Comprehensive
Income". The Company has no items of other comprehensive income in the years
presented and therefore net loss equals total comprehensive income.

SEGMENTS

The Company follows SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information." The Company operates in one segment, using one measurement
of profitability to manage its business. All long-lived assets are maintained in
the United States.

Net revenues through March 31, 2000 have primarily been derived from the sale of
outdoor wireless service coverage products. Export sales as a percentage of net
revenues are as follows:

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Asia.................................................. 17% 16% 3%
South America......................................... 24% 5% 16%
Canada................................................ 18% 16% 15%
Other export sales.................................... 2% 5% 7%
-- -- --
Total export sales.......................... 61% 42% 41%
== == ==
</TABLE>

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock issued to Employees" ("APB 25") and Financial Accounting
Standards Board Interpretation No. 28, "Accounting for Stock Appreciation Rights
and Other Variable Stock Option or Award Plan" ("FIN 28") and complies with the
disclosure provisions of SFAS 123, "Accounting for Stock-Based Compensation".

Under APB 25, compensation expense for grants to employees is based on the
difference, if any, on the date of the grant, between the fair value of the
Company's stock and the exercise price. SFAS 123 defines a "fair value" based
method of accounting for an employee stock option or similar equity investment.
The pro forma disclosures of the difference between compensation expense
included in net loss and the related cost measured by the fair value method are
presented in Note 5.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of
three months or less at the time of purchase to be cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost or market, with cost determined
using the FIFO (first-in, first-out) method. Appropriate allowances are made to
reduce the value of inventories to net realizable value, where this is below
cost. This may occur where the Company determines that inventories may be slow
moving or obsolete.

F-8
<PAGE> 82
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SERVICE PARTS

Parts used for servicing installed equipment are stated at cost and depreciation
is computed over the estimated useful life of three years.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation and amortization is
computed using the straight-line method over the shorter of the estimated useful
lives of the assets, generally three to five years, or the lease term. Gains and
losses upon asset disposal are taken into income in the year of disposition.
Maintenance and repairs are charged to operations as incurred.

INTANGIBLE ASSETS

Intangible assets primarily consist of acquired workforce related to the
acquisition of the assets of The Gwydion Company LLC and are amortized on a
straight-line basis to operations over 3 years.

REVENUE RECOGNITION

The Company's revenue is derived primarily from the sale of Repeater hardware
products and accessories. Revenue is recognized upon shipment or delivery to the
customer, depending upon the terms of the sale, where there is a purchase order
or a sales agreement and collectibility of the resulting receivable is probable.
Where a purchase order or a sales agreement contains a customer acceptance
clause, the Company defers revenue until the acceptance criteria have been met.

Revenues from services, including network design, training and installation
support, are recognized when services are performed.

Revenues from Network Management Systems software are recognized in accordance
with Statement of Position No. 97-2, "Software Revenue Recognition" ("SOP
97-2"), as amended, upon completion of installation, provided that no
significant vendor obligations remain and collectibility is considered probable.

At the time of sale, the Company provides for the estimated cost of meeting
product warranty, hot-line technical support and any unspecified Network
Management System software upgrade obligations. When warranty and post contract
customer support obligations exist beyond one year, the related revenue is
deferred and recognized ratably over the term of the arrangement.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development costs are expensed as incurred.

INCOME TAXES

The Company accounts for income taxes under the asset and liability method.
Deferred tax assets and liabilities are recognized for the tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, and operating
loss carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in the tax rates is
recognized in income in the period that includes the enactment date. A valuation
allowance is recorded for loss carryforwards and other deferred tax assets where
it is more likely than not that such loss carryforwards and deferred tax assets
will not be realized.

F-9
<PAGE> 83
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PRINCIPLES OF CONSOLIDATION

In April 1999, the Company incorporated Repeater Technologies-America do Sul S/C
LTDA, a majority-owned subsidiary in Brazil. Repeater Technologies-America do
Sul's principal activity is sales and sales support for the Brazilian market.

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. All significant intercompany accounts and
transactions have been eliminated.

NET LOSS PER COMMON SHARE

Basic net loss per share is computed by dividing net loss available to common
stockholders by the weighted average number of vested common shares outstanding
for the period. Diluted net loss per share is computed giving effect to all
dilutive potential common shares, including options, warrants, convertible
subordinated debentures and convertible preferred stock. Options, warrants,
convertible subordinated debentures and convertible preferred stock were not
included in the computation of diluted net loss per share for the years ended
March 27, 1998, March 26, 1999 and March 31, 2000 because the effect would be
antidilutive. A reconciliation of the numerator and denominator used in the
calculation of historical basic and diluted net loss per share follows (in
thousands, except per share data):

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Numerator:
Net loss.................................................. $(12,628) $(10,570) $(15,040)
======== ======== ========
Denominator:
Weighted average common shares outstanding................ 2,413 2,405 2,776
Weighted average unvested common shares subject to
repurchase............................................. (37) (38) (268)
-------- -------- --------
Denominator for basic and diluted calculation............... 2,376 2,367 2,508
======== ======== ========
Net loss per common share-basic and diluted................. $ (5.31) $ (4.47) $ (6.00)
======== ======== ========
</TABLE>

ANTIDILUTIVE SECURITIES

The following securities have not been included in the computation of diluted
net loss per share as they are antidilutive:

<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
---------- ---------- ----------
<S> <C> <C> <C>
Convertible preferred stock (after effect of antidilutive
provision)............................................... 10,116,319 10,116,319 10,116,319
Options outstanding to purchase common stock............... 2,392,436 2,702,367 3,534,806
Warrants outstanding to purchase common stock.............. 252,937 252,937 252,937
Warrants outstanding to purchase Series BB convertible
preferred stock.......................................... 835,352 835,352 835,352
Warrants outstanding to purchase Series DD convertible
preferred stock.......................................... -- 3,955 103,955
</TABLE>

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1998, the Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position No. 98-1, or SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for

F-10
<PAGE> 84
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Internal Use" which provides guidance on accounting for the cost of computer
software developed or obtained for internal use. SOP 98-1 is effective for
financial statements for fiscal years beginning after December 15, 1998.
Adoption of SOP 98-1 did not have a material impact on the Company's results of
operations.

In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes new standards of accounting and reporting for derivative instruments
and hedging activities. SFAS 133 requires that all derivatives be recognized at
fair value in the statement of financial position, and that the corresponding
gains or losses be reported either in the statement of operations or as a
component of comprehensive income, depending on the type of hedging relationship
that exists. SFAS 133 will be effective for fiscal years beginning after June
15, 2000. The Company does not currently hold derivative instruments or engage
in hedging activities.

NOTE 2 -- BALANCE SHEET COMPONENTS (IN THOUSANDS):

Inventories consisted of the following:

<TABLE>
<CAPTION>
MARCH 26, MARCH 31,
1999 2000
--------- ---------
<S> <C> <C>
Raw materials............................................... $ 3,168 $ 2,166
Work in process............................................. 546 489
Finished goods.............................................. 784 1,976
------- -------
4,498 4,631
Less: allowance............................................. (1,858) (1,579)
------- -------
$ 2,640 $ 3,052
======= =======
</TABLE>

Service parts consisted of the following:

<TABLE>
<S> <C> <C>
Service parts............................................... $ 596 $ 551
Less: accumulated depreciation.............................. (301) (221)
------- -------
$ 295 $ 330
======= =======
</TABLE>

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
MARCH 26, MARCH 31,
1999 2000
--------- ---------
<S> <C> <C>
Computer equipment.......................................... $ 1,643 $ 2,008
Manufacturing equipment..................................... 3,279 3,960
Furniture and fixtures...................................... 440 514
Leasehold improvements...................................... 79 79
------- -------
5,441 6,561
Less: accumulated depreciation.............................. (3,593) (4,393)
------- -------
$ 1,848 $ 2,168
======= =======
</TABLE>

F-11
<PAGE> 85
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Depreciation expense was $636,000, $810,000, and $795,000 for the years ended
March 27, 1998, March 26, 1999 and March 31, 2000, respectively.

Included as part of the property and equipment balances above:

<TABLE>
<CAPTION>
MARCH 26, MARCH 31,
1999 2000
--------- ---------
<S> <C> <C>
Capital leased equipment.................................... $1,106 $1,106
Less: Accumulated depreciation.............................. (828) (950)
------ ------
$ 278 $ 156
====== ======
</TABLE>

Other current assets consisted of the following:

<TABLE>
<CAPTION>
MARCH 26, MARCH 31,
1999 2000
--------- ---------
<S> <C> <C>
Prepaid expenses............................................ 103 192
Deferred IPO costs.......................................... -- 1,088
---- ------
103 1,280
==== ======
</TABLE>

NOTE 3 -- COMMITMENTS:

The Company has entered into capital lease arrangements for computer and
manufacturing equipment and furniture. The Company also leases its
administrative and manufacturing facility under an operating lease which expires
in 2004, as well as certain equipment under non-cancellable operating leases
which expire in 2001. As of March 31, 2000 future minimum lease payments under
non-cancelled capital and operating leases for years ending March 31 are as
follows:

<TABLE>
<CAPTION>
NON-CANCELLABLE
CAPITAL LEASES OPERATING LEASES
-------------- ----------------
(IN THOUSANDS)
<S> <C> <C>
2001...................................................... 497 624
2002...................................................... 420 635
2003...................................................... 126 646
2004...................................................... -- 485
------ ------
Total minimum lease payments.................... 1,043 $2,390
======
Less: amount representing interest........................ 118
------
Present value of minimum lease payments................... 925
Less: current portion..................................... 418
------
Long-term portion......................................... $ 507
======
</TABLE>

Rent expense under operating leases for the years ended March 27, 1998, March
26, 1999 and March 31, 2000 was approximately $406,000, $476,000, and $717,000,
respectively.

NOTE 4 -- CONVERTIBLE SUBORDINATED DEBENTURES:

The Company issued $15,000,000 in five-year convertible subordinated debentures
in November 1998. The debentures accrue interest at 8.0% per year, payable
quarterly in arrears, and mature November 25, 2003. The debentures are
convertible into Series DD convertible preferred stock at any time prior to the
maturity date at the option of the holder. In addition, the Company has the
right to convert the debentures into fully paid and nonassessable shares of
Series DD convertible preferred stock in the event

F-12
<PAGE> 86
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

that it completes a qualified public offering at which time Series DD
convertible preferred stock will automatically convert into common stock. The
conversion price for the Series DD preferred stock in either case is $5.50 per
share.

NOTE 5 -- STOCKHOLDERS' EQUITY:

CONVERTIBLE PREFERRED STOCK

Convertible preferred stock is issuable in series. At March 31, 2000, preferred
stock was designated, issued and outstanding as follows:

<TABLE>
<CAPTION>
PROCEEDS,
SHARES NET OF
------------------------ ISSUANCE LIQUIDATION
AUTHORIZED OUTSTANDING COSTS PREFERENCE
---------- ----------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Series AA................................... 1,228,409 1,225,468 $ 6,200 $ 6,250
Series BB................................... 5,081,668 4,246,316 11,145 11,210
Series CC................................... 4,600,000 4,402,907 12,071 12,108
Series DD................................... 3,300,000 -- -- --
---------- --------- ------- -------
14,210,077 9,874,691 $29,416 $29,568
========== ========= ======= =======
</TABLE>

In August 1997, the Board of Directors authorized the issuance of approximately
838,368 additional shares of Series BB convertible preferred stock at a price of
$2.64 per share.

In November and December 1997, the Board of Directors authorized and issued
approximately 4,402,907 shares of a new series of convertible preferred stock
designated as "Series CC convertible preferred stock" at a price of $2.75 per
share. In connection with this Series CC convertible preferred stock issuance,
the Board of Directors approved an amendment to the Company's Articles of
Incorporation to increase the number of shares of convertible preferred and
common stock authorized for issuance to 10,910,077 and 18,000,000 shares,
respectively.

In connection with the designation of 3,300,000 shares of Series DD convertible
preferred stock, to be issued upon conversion of the convertible subordinated
debentures, in October 1998, the Board of Directors approved an amendment to the
Company's Articles of Incorporation to increase the number of preferred and
common stock authorized for issuance to 14,210,077 and 30,000,000 shares,
respectively.

CONVERSION

Each share of Series AA, BB, CC and DD convertible preferred stock is
convertible into shares of common stock, at the option of the holder, according
to a conversion ratio, subject to adjustments in accordance with antidilution
provisions contained in the Company's Articles of Incorporation.

As of March 31, 2000, the conversion ratio in effect is one share of common
stock for each share of Series BB, CC and DD convertible preferred stock, and
approximately 1.1972 shares of common stock for each share of Series AA
convertible preferred stock.

Each share of Series AA, BB and DD convertible preferred stock automatically
converts into the number of shares of common stock into which such shares are
convertible at the then effective conversion ratio upon the affirmative vote of
at least a majority of the shares of such preferred stockholders by series or
upon the closing of a public sale of common stock at a per share price of not
less than $10 and aggregate gross proceeds of not less than $10,000,000. Each
share of Series CC convertible preferred stock automatically converts into the
number of shares of common stock into which such shares are convertible

F-13
<PAGE> 87
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

at the then effective conversion ratio upon the affirmative vote of at least
2/3 of the shares of such preferred stockholders or upon the closing of a
public sale of common stock at a per share price of not less than $10 and
aggregate gross proceeds of not less than $10,000,000.

DIVIDENDS

The preferred stockholders are entitled to receive non-cumulative dividends,
prior and in preference to any payment of any dividend on common stock, when and
if declared by the Board of Directors, in the amount of $0.51, $0.26, $0.28, and
$0.55 per share for Series AA, Series BB, Series CC, and Series DD convertible
preferred stock, respectively. The holders of Series AA, BB, CC and DD
convertible preferred stock will also be entitled to participate in dividends on
common stock, when and if declared by the Board of Directors, based on the
number of shares of common stock held on an as-if converted basis. No dividends
have been declared to date.

LIQUIDATION

In the event of liquidation and to the extent assets are available, the Series
AA, Series BB, Series CC, and Series DD convertible preferred stockholders are
entitled to a liquidation preference distribution of $5.10, $2.64, $2.75, and
$5.50 per share, respectively, plus declared but unpaid dividends, before any
liquidation distributions are made to common stockholders. Additionally, the
Series CC and Series DD convertible preferred stock will share the remaining
proceeds pro rata, on an as-converted to common stock basis, with the holders of
common stock.

VOTING

Each share of Series AA, BB, CC and DD convertible preferred stock has voting
rights equal to an equivalent number of shares of common stock into which it is
convertible and votes together as one class with the common stock.

As long as at least 1,187,500 shares of Series AA and Series BB, 1,500,000
shares of Series CC, and 900,000 shares of Series DD convertible preferred stock
remain outstanding, the Company must obtain approval from a majority of the
convertible preferred stockholders by class in order to alter the Articles of
Incorporation as related to convertible preferred stock, change the authorized
number of shares of common or convertible preferred stock, redeem or repurchase
any shares of common Stock other than shares subject to the right of repurchase
by the Company, authorize a dividend for any class or series of stock, authorize
or issue any equity security having a preference over, or being in parity with,
the Series AA, BB, CC and DD convertible preferred stock, or effect a
liquidation, merger, consolidation or sale of assets of the Company that results
in a transfer of 50% or more of the voting control of the Company.

Holders of Series AA, BB, CC and DD convertible preferred stock shall be
entitled to elect, one member, two members, one member and two members of the
Board of Directors, respectively. Holders of Series AA, BB, CC and DD
convertible preferred stock, voting together as a single class with the holders
of common stock, shall be entitled to elect the balance of directors, if any.

WARRANTS

In connection with the issuance of Series E convertible preferred stock, in
November 1995 and March 1997, the Company issued warrants to purchase 255,710
and 613 shares of common stock respectively at $0.10 per share. The warrants
expire in November 2000 or upon the closing of a public offering by the Company
or merger of the Company with another entity, whichever is earlier. As of March
31, 2000, warrants for 3,386 shares have been exercised and warrants for 252,937
shares remained outstanding.

In connection with the issuance of Series BB convertible preferred stock, in
August 1997, the Company issued warrants to investors for the purchase of
816,412 shares of Series BB convertible preferred stock at
F-14
<PAGE> 88
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$2.64 per share. The warrants expire in 2002, or upon the closing of a public
offering by the Company or merger of the Company with another entity, whichever
is earlier. As of March 31, 2000, all of these warrants remained outstanding.

In July 1997, in connection with a capital lease, the Company issued warrants to
a leasing company for the purchase of 18,940 shares of Series BB convertible
preferred stock at $2.64 per share. The warrants expire in 2004. As of March 31,
2000, all of these warrants remained outstanding.

In connection with an equipment lease line of credit, the Company issued in
January 1999 warrants to purchase 3,955 shares of Series DD convertible
preferred stock at $5.50 per share. The warrants expire in 2009. As of March 31,
2000, all warrants remained outstanding.

Using the Black-Scholes method, the fair market values of the warrants issued in
conjunction with the lease were determined to be insignificant.

In July 1999, in connection with two promissory notes issued to a financial
institution, the Company issued warrants to purchase 100,000 shares of Series DD
convertible preferred stock at $5.50 per share. The warrants expire in 2006. As
of March 31, 2000, all warrants remained outstanding. These warrants were valued
using the Black-Scholes method using the same assumptions for SFAS 123
disclosures (Note 5) plus a volatility factor of 50% and were recorded as debt
discount. The debt discount ($542,000) is being amortized over the term of the
promissory notes.

COMMON STOCK

A portion of the shares issued are subject to a right of repurchase at original
price in favor of the Company, which lapses over service period. At March 31,
2000, shares subject to repurchase are as follows:

<TABLE>
<S> <C>
Stock option exercised but not yet vested................... 36,184
Shares issued in connection with acquisition (see Note
11)....................................................... 573,334
-------
609,518
=======
</TABLE>

FAIR VALUE OF COMMON STOCK

In the absence of a public trading market for the Company's common stock,
alternative means for determining the fair value were used by the Board of
Directors. Factors considered included the consideration received from the third
parties for the issuance of Series AA, BB, CC, and DD convertible preferred
stock of the Company, the significant liquidation, participation and other
preferences of the holders of these preferred stocks, the financial condition of
the Company, including milestones in the development of the Company's business
and the market conditions.

F-15
<PAGE> 89
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

RESERVED SHARES

The Company has reserved shares of common stock for future issuance as follows:

<TABLE>
<CAPTION>
MARCH 31,
2000
----------
<S> <C>
Conversion of preferred stock outstanding (after effect of
antidilution provisions).................................. 10,116,319
Conversion of Series DD convertible preferred stock issuable
upon conversion of convertible subordinated debentures.... 2,727,263
Shares available for stock option grants.................... 109,143
Stock options outstanding................................... 3,534,806
Warrants outstanding to purchase common stock............... 252,937
Conversion of Series BB convertible preferred stock issuable
upon exercise of outstanding warrants..................... 835,352
Conversion of Series DD convertible preferred stock issuable
upon exercise of outstanding warrants..................... 103,955
----------
17,679,775
==========
</TABLE>

STOCK PLANS

1990 INCENTIVE STOCK PLAN

In May 1990, the Company adopted the 1990 Incentive Stock Plan under which
shares of common stock are reserved for exercise of options to be granted to key
employees, members of the Board of Directors and consultants to the Company. As
of March 31, 2000, a total of 2,716,910 shares have been reserved for option
grants under this Plan.

In May 1993, the Company adopted the Key Executives Stock Option Plan under
which shares of common stock are reserved for exercise of options to be granted
to certain key executive employees of the Company. A total of 1,351,544 shares
have been reserved for option grants under this Plan.

The Plans permit the Company to (i) grant incentive options at 100% of fair
value at the date of grant; (ii) grant nonqualified options at 85% or greater of
fair value; and (iii) sell common stock at 85% of fair value subject to stock
purchase agreements giving the Company repurchase rights in the event of
termination. Options have a vesting period of four years from the date of grant
and are exercisable immediately. The Company has a right to repurchase all or
any of the unvested shares, at the original exercise price, in the event of
termination of employment. The options have a maximum term of ten years. Options
granted to 10% stockholders shall have a maximum term of five years.

2000 EQUITY INCENTIVE PLAN

On February 15, 2000, the Board of Directors approved the 2000 Equity Incentive
Plan under which 3,000,000 shares were reserved for grants to employees,
directors and consultants. The plan will be effective upon the closing of an
underwritten public offering of the Company's Common Stock.

2000 EMPLOYEE STOCK PURCHASE PLAN

On February 15, 2000, the Board of Directors approved the 2000 Employee Stock
Purchase Plan under which 500,000 shares were reserved. The plan will be
effective upon the closing of an underwritten public offering of the Company's
Common Stock.

F-16
<PAGE> 90
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PRO FORMA STOCK-BASED COMPENSATION

The Company has adopted the disclosure-only provisions of SFAS 123, "Accounting
for Stock-Based Compensation". Had compensation costs been determined based on
the fair value method prescribed by that statement, the Company's net loss would
have been as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Net loss attributed to common stockholders -- as reported... $(12,628) $(10,570) $(15,040)
Net loss attributed to common stockholders -- pro forma..... $(12,672) $(10,626) (15,660)
Net loss per common share -- basic and diluted as
reported.................................................. $ (5.31) $ (4.47) $ (6.00)
Net loss per common share -- basic and diluted pro forma.... $ (5.33) $ (4.49) $ (6.24)
</TABLE>

Such pro forma disclosures may not be representative of future compensation cost
because options vest over several years and additional grants are made each
year. The fair value of each option grant is estimated on the date of grant
using the minimum value method with the following assumptions used for grants:

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Weighted average risk-free interest rate.................... 5.50% 5.18% 5.50%
Expected life............................................... 5 years 5 years 5 years
Expected dividends.......................................... 0% 0% 0%
</TABLE>

Based on the above assumptions, the weighted average minimum values per share of
options granted were approximately $0.07, $3.77 and $5.74 for the years ended,
March 27, 1998, March 26, 1999 and March 31, 2000 respectively.

F-17
<PAGE> 91
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes stock option activity:

<TABLE>
<CAPTION>
WEIGHTED-
SHARES AVERAGE
AVAILABLE SHARES EXERCISE PRICE
FOR GRANT OUTSTANDING PER SHARE
---------- ----------- --------------
<S> <C> <C> <C>
Balance at March 31, 1997.......................... 527,137 1,187,993 $0.34
Additional shares reserved......................... 1,239,967 -- --
Shares repurchased................................. 30,039 -- $0.50
Granted............................................ (1,216,600) 1,216,600 $0.30
Exercised.......................................... -- (4,655) $0.34
Canceled........................................... 7,502 (7,502) $0.40
---------- --------- -----
Balance at March 27, 1998.......................... 588,045 2,392,436 $0.32
Additional shares reserved......................... -- -- --
Granted............................................ (489,320) 489,320 $2.18
Exercised.......................................... -- (2,430) $0.42
Canceled........................................... 176,959 (176,959) $0.57
---------- --------- -----
Balance at March 26, 1999.......................... 275,684 2,702,367 $0.64
Additional shares reserved......................... 1,000,000 -- --
Granted............................................ (1,795,150) 1,795,150 $6.68
Exercised.......................................... -- (334,102) $0.33
Canceled........................................... 628,609 (628,609) $1.31
---------- --------- -----
Balance at March 31, 2000.......................... 109,143 3,534,806 $3.62
========== ========= =====
</TABLE>

The following table summarizes information relating to stock options outstanding
at March 31, 2000:

<TABLE>
<CAPTION>
WEIGHTED-
AVERAGE
OPTIONS REMAINING
OUTSTANDING AND CONTRACTUAL
OPTION EXERCISE PRICE EXERCISABLE LIFE (IN YEARS)
--------------------- --------------- ---------------
<S> <C> <C>
$ 0.30.................................................... 1,349,650 7.34
$ 0.50.................................................... 215,876 4.57
$ 1.00.................................................... 67,500 8.45
$ 2.00.................................................... 100,000 8.45
$ 3.00.................................................... 1,067,530 9.44
$12.00.................................................... 734,250 9.84
------ ------------- ----------
$ 3.62 (weighted average)................................. 3,534,806 8.38
------ ------------- ----------
------ ------------- ----------
</TABLE>

As of March 31, 2000 approximately 1,067,110 options outstanding were vested,
and approximately 36,184 unvested options had been exercised and were subject to
the Company's repurchase rights.

STOCK-BASED COMPENSATION

During the years ended March 26, 1999 and March 31, 2000, the Company recorded
$1,041,000 and $7,083,000 of unearned stock-based compensation for the excess of
the deemed fair market value over the exercise price at the date of grant. The
compensation expense is being recognized over the option vesting period of four
years, using the method prescribed by FIN 28. Under the FIN 28 method, each
vested tranche of options is accounted for as a separate option grant awarded
for past services. Accordingly, the compensation expense is recognized over the
period during which the services have been provided. This

F-18
<PAGE> 92
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

method results in a front-loading of the compensation expense. For the years
ended March 26, 1999 and March 31, 2000, the Company recorded $286,000 and
$2,510,000 of stock-based compensation expense in connection with options
granted to employees and consultants.

Assuming all employees with outstanding options remain employed by the Company
through the vesting period, the total unearned stock-based compensation recorded
for all option grants through March 31, 2000 will be amortized as follows: $2.9
million for the year ending March 31, 2001; $1.5 million for the year ending
March 31, 2002, $0.7 million for the year ending March 31, 2003 and $0.2 million
thereafter.

NOTE 6 -- 401(k) PLAN:

The Company has a 401(k) plan under which matching and discretionary
contributions may be made. The Company did not make any contributions under this
plan for any of the periods presented.

NOTE 7 -- RESEARCH AND DEVELOPMENT CONTRACT:

In January 1997, the Company entered into an agreement with a corporation for
the joint development of a new product line. The agreement provided for funding
of the Company's development efforts for the product. Under this agreement,
approximately $900,000 and $225,000 was received by the Company in fiscal 1997
and 1998, respectively. Approximately half of these amounts were subject to
refund if final acceptance of the product was not obtained and as of March 31,
1997 $450,000 was deferred. The Company incurred costs of approximately $280,000
and $1,400,000 in fiscal 1997 and 1998, respectively, under this agreement.
Costs incurred by the Company under this agreement, offset by funding received
which is not subject to refund, have been included in research and development
expenses. This agreement was discontinued in fiscal 1998 and amounts previously
deferred have been subsequently repaid by the Company based on a note payable
entered into between the parties (see Note 8).

NOTE 8 -- NOTES PAYABLE:

In March 1998, in conjunction with a settlement of the research and development
contract described in Note 7, the Company entered into an unsecured promissory
note with the other party to this contract for the repayment of amounts advanced
to the Company. The $570,000 note bore interest at 9% per annum and has been
repaid as through October 1999.

In July 1999, the Company entered into a note agreement with a financial
institution. Borrowings made pursuant to this agreement will not exceed
$5,000,000 in the aggregate and will be secured by all assets of the Company,
subject to permitted liens. Pursuant to this agreement, the Company has issued,
in July 1999 and September 1999, two promissory notes for $3,000,000 and
$2,000,000, respectively, bearing interest at 13.47% and 13.68%, respectively.
The Company will make monthly interest-only payments through February 2000,
followed by 30 monthly installments of $118,335 and $79,090 for the $3,000,000
and the $2,000,000 promissory notes, respectively.

The promissory notes contain restrictions, including but not limited to, the
sale of assets, payment of dividends and acquisition of stock or assets of any
company. The acquisition of substantially all of the assets and assuming
substantially all of the liabilities of The Gwydion Company LLC (Note 11)
resulted in the Company violating certain covenants. As a result of the
violation, the financial institution had the right to declare the promissory
notes immediately due and payable. The Company asked for and received a waiver
from the financial institution of the existing violation of the covenants and
for prospective violations of the covenants related to the Company's
reincorporation in Delaware and the closing of the initial public offering.

F-19
<PAGE> 93
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- INCOME TAXES:

Net deferred tax assets are as follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
MARCH 27, MARCH 26, MARCH 31,
1998 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 9,027 $ 13,075 $ 16,780
Research and other credits................................ 751 985 1,144
Inventory reserve......................................... 1,613 860 629
Stock compensation........................................ -- -- 762
Intangible assets......................................... -- -- 343
Depreciation and amortization............................. 564 888 952
Other accruals and reserves not currently deductible for
tax purposes........................................... 328 657 641
-------- -------- --------
Total deferred tax assets......................... 12,283 16,465 21,251
Valuation allowance for deferred taxes.................... (12,283) (16,465) (21,251)
-------- -------- --------
Net deferred taxes................................ $ -- $ -- $ --
======== ======== ========
</TABLE>

Management believes that, based on a number of factors, it is more likely than
not that the deferred tax assets will not be utilized, such that a full
valuation allowance has been recorded.

At March 31, 2000, the Company had federal and state net operating loss
carryforwards of approximately $47 million and $16 million respectively,
available to offset future taxable income. The Company also had federal and
state research and development tax credits of approximately $0.8 million and
$0.5 million. The net operating loss and tax credit carryforwards will expire at
various dates from 2000 to 2019, if not utilized.

Utilization of the net operating losses and credits may be subject to a
substantial annual limitation due to the "change in ownership" provisions of the
Internal Revenue Code of 1986 and similar state provisions. The annual
limitation may result in the expiration of net operating losses and credits
before utilization.

NOTE 10 -- UNAUDITED PRO FORMA NET LOSS PER COMMON SHARE AND PRO FORMA
STOCKHOLDERS' EQUITY:

Upon the closing of the Company's initial public offering, all outstanding
Series AA, BB, CC, DD and EE (see note 12) convertible preferred stock will be
converted into common stock. The pro forma effect of this conversion has been
presented as a separate column in the Company's balance sheet.

Pro forma basic and diluted net loss per share have been computed to give effect
to common equivalent shares from convertible preferred stock that will
automatically convert upon the closing of the Company's initial public offering
(using the as-if-converted method) for the year ended March 31, 2000.

In addition, there are outstanding warrants to purchase 252,937 shares of common
stock and 816,412 shares of convertible preferred stock which will automatically
convert into common stock and will expire upon the closing of the offering, if
not exercised earlier. The Company has received notice from the warrant holders
that they intend to exercise their warrants. The Company has reflected the
exercise of warrants in the unaudited pro forma stockholder's equity.

F-20
<PAGE> 94
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation of the numerator and denominator used in the calculation of pro
forma basic and diluted net loss per common share follows (in thousands, except
per share data):

<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31,
2000
----------
<S> <C>
Numerator:
Net loss.................................................. $(15,040)
========
Denominator
Shares used in computing basic and diluted net loss per
share.................................................. 2,508
Adjusted to reflect the effect of the assumed conversion
of convertible preferred stock from the date of
issuance:
Series AA convertible preferred stock................ 1,467
Series BB convertible preferred stock................ 4,246
Series CC convertible preferred stock................ 4,403
Series DD convertible preferred stock (including
convertible subordinated debentures)................ 2,727
--------
Weighted average shares used in computing pro forma basic
and diluted net loss per share............................ 15,352
========
Pro forma basic and diluted net loss per share.............. $ (0.98)
========
</TABLE>

NOTE 11 -- ACQUISITION:

On November 4, 1999, the Company acquired substantially all of the assets of The
Gwydion Company LLC ("Gwydion"), a development stage company engaged in design
and development of radio frequency and microwave fiber-optic equipment for
cellular and PCS (personal communication services), satellite communications and
related markets. The purchase consideration consisted of $754,000 in cash.

In addition, the Company issued 573,334 shares of common stock to the members of
The Gwydion Company LLC. These shares will be held in an escrow account and will
be subject to the Company's right of repurchase for $1.00 in the aggregate until
certain performance criteria are met. These performance criteria include
continued employment of one member for a period of 18 months. The Company will
revalue these shares at the end of each reporting period until vested. The
compensation expense will be recognized over the 18 months, using the method
prescribed by FIN 28, as explained in Note 5. At March 31, 2000 and for the year
then ended, the Company recorded unearned compensation and research and
development expense of $4,969,000 and $1,911,000, respectively, under this
arrangement.

The transaction was recorded using the purchase method of accounting and the
results of Gwydion have been included in the Company's financial statements
subsequent to November 4, 1999. The allocation of the purchase price to the
tangible and identifiable intangible assets acquired in connection with this
acquisition was based on estimated fair values as determined by management as
follows (in thousands):

<TABLE>
<S> <C>
Computer equipment.......................................... $ 10
Assumed liabilities......................................... (175)
Acquired workforce.......................................... 34
Acquired in-process research and development................ 885
Deferred income taxes....................................... 354
Valuation allowance......................................... (354)
-----
Total purchase consideration................................ $ 754
=====
</TABLE>

The amortization of acquired workforce is being computed over three years on the
straight-line basis. In connection with the acquisition of Gwydion the Company
recorded an in process technology charge of

F-21
<PAGE> 95
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$0.9 million during the year ended March 31, 2000. An independent appraisal was
performed to determine the fair value of the identifiable assets, including the
portion of the purchase price attributed to the acquired in-process technology.
The income approach was used to value acquired in-process technology, which
includes an analysis of the completion costs, cash flows, other required assets
and risks associated with achieving such cash flows. Revenue is estimated to
grow during the first four years and this growth is expected to decline during
the last three years of the expected life of the product technology. Gross
margins and operating expense ratios are estimated to be stable with a slight
decline after the fourth year. The present value of these cash flows are then
calculated with a discount rate of 30%. At the date of acquisition, the Company
determined the technological feasibility of Gwydion's product was not
established, and accordingly, wrote off the corresponding amount to acquired
in-process technology. Gwydion is expected to introduce the final product by
August 2000. Approximately $1.6 million in research and development had been
spent up to the date of the acquisition in an effort to develop the technology
to produce a commercially viable product. The future research and development
expense associated with the acquired in-process product was estimated to be
approximately $0.9 million between November 1999 and August 2000. Currently the
Company knows of no developments which would lead it to change its original
assessment of the expected completion and commercial viability of this project.
At the date of acquisition, the only identifiable intangible assets acquired
were the technology under development and the acquired workforce.

The following unaudited pro forma summary presents the consolidated results of
operations of the Company for the year ended March 31, 2000, combined with the
statement of operations of Gwydion for the nine months ended September 30, 1999,
as if the acquisition of substantially all of the assets of Gwydion occurred on
April 1, 1999, giving effect to an acquisition adjustment for the elimination of
acquired in-process technology and compensation costs charged to operations in
connection with the acquisition.

<TABLE>
<CAPTION>
YEAR ENDED
MARCH 31, 2000
--------------
<S> <C>
Net Revenue................................ $ 16,953
Net loss................................... (14,870)
</TABLE>

The pro forma results are not necessarily indicative of what actually would have
occurred if the acquisition had been in effect for the entire period presented.
In addition, they are not intended to be a projection of future results.

NOTE 12 -- SUBSEQUENT EVENTS

REINCORPORATION

On May 19, 2000 the Company reincorporated in the State of Delaware.

Following the reincorporation, the Company is authorized to issue 70,000,000
shares of $0.001 par value common stock and 5,000,000 shares of $0.001 par value
preferred stock.

SERIES EE CONVERTIBLE SUBORDINATED DEBENTURES

On July 11, 2000 the Company issued $5,100,000 of Series EE convertible
subordinated debentures, convertible into shares of Series EE convertible
preferred stock at the lesser of $8.00 per share or the offering price of the
Company's initial public offering of the Company's common stock, and warrants to
purchase the number of shares of our Series EE convertible preferred stock equal
to $1,020,000 divided by the conversion price, at an exercise price of $8.00 per
share. The conversion price is the lesser of $8.00 or the offering price of the
initial public offering of the Company's common stock. The Series EE convertible
subordinated debentures will convert into Series EE convertible preferred stock
at any time

F-22
<PAGE> 96
REPEATER TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

prior to the maturity date at the option of the holder. In addition, the Company
has the right to convert the debentures into fully paid and nonassessable shares
of Series EE convertible preferred stock in the event that it completes a
qualified public offering at which time Series EE convertible preferred stock
will automatically convert into common stock. The Series EE convertible
subordinated debentures bear interest at an annual rate of 8.0%, payable
quarterly, and mature on November 25, 2003. The warrants expire on July 11,
2005. The warrants will be valued using the Black-Scholes valuation method,
assuming an exercise price of $8.00 and using the assumptions disclosed under
note 5. The calculated value (approximately $524,000) will be recorded as debt
discount and amortized over the term of the convertible subordinated debentures.

F-23
<PAGE> 97

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Members
of The Gwydion Company, LLC
(a development stage company)

In our opinion, the accompanying balance sheets and the related statements of
operations, of members' deficit and of cash flows present fairly, in all
material respects, the financial position of The Gwydion Company, LLC (a
development stage company) at December 31, 1998 and September 30, 1999, and the
results of its operations and its cash flows for the year ended December 31,
1998, the nine months ended September 30, 1999 and the period from December 6,
1996 (date of inception) to September 30, 1999 in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICEWATERHOUSECOOPERS LLP

San Jose, California
March 15, 2000

F-24
<PAGE> 98

THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 23,000 $ 9,000
----------- -----------
Total current assets.............................. 23,000 9,000
Property and equipment, net................................. 18,000 28,000
Other assets................................................ 2,000 2,000
----------- -----------
Total assets...................................... $ 43,000 $ 39,000
=========== ===========

LIABILITIES AND MEMBERS' DEFICIT
Current liabilities:
Notes payable, current.................................... $ 274,000 $ 574,000
Accounts payable.......................................... 42,000 42,000
Accrued liabilities....................................... 12,000 29,000
Loans due to members, current............................. 412,000 1,109,000
----------- -----------
Total current liabilities......................... 740,000 1,754,000
Notes payable, net of current portion....................... 36,000 30,000
Loans due to members, net of current portion................ 419,000 378,000
----------- -----------
Total liabilities................................. 1,195,000 2,162,000
=========== ===========
Commitments (Note 5)
Members' deficit accumulated during the development stage... (1,152,000) (2,123,000)
----------- -----------
Total liabilities and members' deficit............ $ 43,000 $ 39,000
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-25
<PAGE> 99

THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 6,
NINE MONTHS 1996 (DATE OF
YEAR ENDED ENDED INCEPTION) TO
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1998 1999 1999
------------ ------------- -------------
<S> <C> <C> <C>
Net revenues......................................... $ 46,000 $ -- $ 117,000
Operating expenses:
Research and development........................... 565,000 624,000 1,576,000
Sales and marketing................................ 45,000 123,000 219,000
General and administrative......................... 119,000 190,000 421,000
--------- --------- -----------
Total operating expenses................... 729,000 937,000 2,216,000
--------- --------- -----------
Loss from operations................................. (683,000) (937,000) (2,099,000)
Interest expense..................................... 51,000 33,000 84,000
Income tax........................................... 1,000 1,000 2,000
--------- --------- -----------
Net loss............................................. $(735,000) $(971,000) $(2,185,000)
========= ========= ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-26
<PAGE> 100

THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF MEMBERS' DEFICIT

<TABLE>
<S> <C>
Balance at December 31, 1997................................ $ (350,000)
Capital contributions from members.......................... 100,000
Return of capital to members................................ (18,000)
Liquidation of a members interest........................... (149,000)
Net loss for the year ended December 31, 1998............... (735,000)
-----------
Balance at December 31, 1998................................ (1,152,000)
Net loss for the nine months ended September 30, 1999....... (971,000)
-----------
Balance at September 30, 1999............................... $(2,123,000)
===========
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-27
<PAGE> 101

THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 6,
NINE MONTHS 1996 (DATE OF
YEAR ENDED ENDED INCEPTION) TO
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1998 1999 1999
------------ ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................... $(735,000) $(971,000) $(2,185,000)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation.................................... 5,000 7,000 14,000
Members' compensation converted to notes
payable....................................... -- -- 202,000
Changes in current assets and liabilities:
Other assets.................................. 13,000 -- 2,000
Accounts payable.............................. 21,000 -- 42,000
Accrued liabilities........................... 10,000 17,000 29,000
--------- --------- -----------
Net cash used in operating activities...... (686,000) (947,000) (1,896,000)
--------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment................. (16,000) (17,000) (42,000)
--------- --------- -----------
Net cash used in investing activities...... (16,000) (17,000) (42,000)
--------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable........................ 30,000 300,000 360,000
Proceeds from loans due to members................. 390,000 697,000 1,487,000
Repayment of notes payable......................... -- (6,000) (6,000)
Repayment of loans due to members.................. (60,000) (41,000) (101,000)
Capital contributions from members................. 100,000 -- 255,000
Return of capital to members....................... (18,000) -- (48,000)
--------- --------- -----------
Net cash provided by financing
activities............................... 442,000 950,000 1,947,000
--------- --------- -----------
Net increase (decrease) in cash and cash
equivalents........................................ (260,000) (14,000) 9,000
Cash and cash equivalents at beginning of year....... 283,000 23,000 --
--------- --------- -----------
Cash and cash equivalents at end of year............. $ 23,000 $ 9,000 $ 9,000
========= ========= ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes......................... $ 2,000 $ -- $ 2,000
Cash paid for interest............................. $ 39,000 $ 16,000 $ 55,000
NON CASH FINANCING AND INVESTING ACTIVITIES:
Members' compensation converted to loans due to
members......................................... $ -- $ -- $ 101,000
Members' compensation converted to notes payable... $ -- $ -- $ 101,000
Return of capital converted to notes payable....... $ 149,000 $ -- $ 149,000
</TABLE>

The accompanying notes are an integral part of these financial statements.
F-28
<PAGE> 102

THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The Gwydion Company, LLC, (the "Company"), was incorporated in California on
December 6, 1996.

The Company is engaged in the business of designing, developing and
manufacturing radio frequency and microwave fiberoptic equipment for the
cellular, personal communication services, satellite communications and related
markets.

The Company is considered to be in the development stage at December 31, 1998
and September 30, 1999, as defined in the Statement of Financial Accounting
Standards No. 7, "Accounting and Reporting by Development Stage Enterprises"
("SFAS 7") and since inception has devoted substantially all of its efforts to
developing its products, and recruiting personnel.

USE OF ESTIMATES

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

REVENUE RECOGNITION

To date, revenue has been derived primarily from the sale of evaluation units.
Revenue is recognized at the time of shipment, provided no significant
obligations are remaining, and collection is probable.

CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. The Company deposits
cash and cash equivalents with high credit quality financial institutions.

CAPITALIZED SOFTWARE DEVELOPMENT COSTS

Software development costs are included in research and development and are
expensed as incurred. After technological feasibility is established, material
software development costs are capitalized. The capitalized cost is then
amortized on a straight-line basis over the estimated product life, or on the
ratio of current revenues to total projected product revenues, whichever is
greater. To date, technological feasibility has not been achieved on any of the
Company's products and therefore no cost has been capitalized.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally
five to seven years.

LONG-LIVED ASSETS

The Company evaluates the recoverability of its long-lived assets in accordance
with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." SFAS No. 121 requires recognition of
impairment of long-lived assets in the event the net book value of such assets
exceeds the future undiscounted cash flows attributable to such assets.

START-UP COSTS

The Company has adopted the provisions of SOP 98-5, "Reporting on the Costs of
Start-Up Activities" ("SOP 98-5"), which provides guidance on the financial
reporting of start-up costs and organization costs.

F-29
<PAGE> 103
THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

It requires the costs of start-up activities and organization costs to be
expensed as incurred. As the Company has historically expensed these costs since
inception, the adoption of SOP 98-5 did not have a material impact on its
financial statements.

INCOME TAXES

The Company is a limited liability company whereby earnings and losses are
included in the members' personal income tax returns.

The provision of income tax corresponds to the minimum franchise tax and any
gross receipts tax payable to the State of California.

NOTE 2 -- BALANCE SHEET COMPONENTS:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
<S> <C> <C>
Property and equipment:
Computer equipment................................. $12,000 $ 23,000
Furniture and fixtures............................. 13,000 19,000
------- --------
25,000 42,000
Less: Accumulated depreciation..................... (7,000) (14,000)
------- --------
$18,000 $ 28,000
======= ========
</TABLE>

NOTE 3 -- RELATED PARTY TRANSACTIONS:

MEMBERS' COMPENSATION

The Company recorded compensation expense for management and engineering
services provided by members for amounts of $149,000, $96,000, and $518,000, for
the year ended December 31, 1998, the nine months ended September 30, 1999, and
the period from December 6, 1996 to September 30, 1999. As of December 31, 1998
and September 30, 1999, accrued compensation due to a member amounted to
$101,000. This amount is included in loans due to members, current.

LOANS DUE TO MEMBERS

In December 1997, the Company issued a promissory note to a member for $400,000,
payable over five years with principal payments of $7,000 per month plus
interest at 2% over prime rate. At December 31, 1998 and September 30, 1999 the
balances were $340,000 and $298,000, respectively.

In June 1998, the Company issued a promissory note for $160,000 to a member with
an interest rate of 12%, payable monthly, beginning in December 1998. Principal
is due in full in June 2000. At December 31, 1998 and September 30, 1999, the
balance was $160,000. Accrued interest was $11,000 and $27,000, respectively.

From September 1998 to September 1999, the Company received cash advances from a
member. These cash advances are repayable on demand and are non interest
bearing. As of December 31, 1998 and September 30, 1999, the balances were
$230,000 and $927,000, respectively.

PROMISSORY NOTES

On December 13, 1998, the Company issued two promissory notes to two related
parties of a retiring member, for an amount of $30,000 each, in replacement for
loans made previously. The notes carry no interest and are repayable in monthly
installments of $1,000, each, over a 30 month period starting in

F-30
<PAGE> 104
THE GWYDION COMPANY, LLC
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

January 1999. As of December 31, 1998 and September 30, 1999, the remaining
balances were $30,000, each and $27,000, each, respectively. The balance
outstanding as of September 30, 1999 includes payments in arrears for $3,000,
each.

NOTE 4 -- NOTES PAYABLE:

On December 13, 1998, the Company entered into an agreement with a retiring
member, pursuant to which the Company shall pay an amount of $250,000,
representing payment of accrued compensation for $101,000, and full liquidation
of membership interest for $149,000. The liquidation of membership interest has
been accounted for as an equity transaction, with no revaluation of assets and
liabilities. As of December 31, 1998 and September 30, 1999, the $250,000
payment due to the former member is included in notes payable, current.

In connection with a letter of intent for the acquisition of substantially all
of the Company's assets, on September 21, 1999, the Company issued a promissory
note to Repeater Technologies, Inc. for an amount of $300,000. This note is
non-interest bearing, is secured by assignment of ownership rights in certain
product designs, and shall be deemed to be part of the consideration to be paid
to the Company for the purchase of substantially all of its assets (see Note 6).

NOTE 5 -- COMMITMENTS:

LEASES

The Company leases office space under a noncancelable operating lease which
expires in January 2004. Rent expense for the year ended December 31, 1998, the
nine months ended September 30, 1999 and the period from inception to September
30, 1999 was $23,000, $47,000 and $70,000, respectively.

Future minimum lease payments under this noncancelable operating lease are as
follows:

<TABLE>
<CAPTION>
YEARS ENDED OPERATING
DECEMBER 31, LEASES
------------ ---------
<S> <C>
1999 (3 months)................................... $ 16,000
2000.............................................. 64,000
2001.............................................. 64,000
2002.............................................. 64,000
2003.............................................. 80,000
--------
Total minimum lease payments............ $288,000
========
</TABLE>

NOTE 6 -- SUBSEQUENT EVENTS:

On November 4, 1999, substantially all of the Company's assets were acquired by
Repeater Technologies Inc., a company engaged in the development and marketing
of products primarily for CDMA based wireless communication networks. The
purchase consideration consisted of $454,000 cash, forgiveness of the $300,000
promissory note (see Note 4) and 573,334 shares of Repeater Technologies' common
stock. The 573,334 shares will be held in escrow for 18 months to secure the
Company's indemnification obligation and to guarantee the successful completion
of development of the technology being acquired from the Company and the
continued employment of a key employee of Gwydion. In the event of failure to
develop the specified product designs, Repeater Technologies Inc. has a right to
repurchase the shares for $1.00 in the aggregate.

F-31
<PAGE> 105

REPEATER TECHNOLOGIES, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF OPERATIONS

On November 4, 1999, the Company acquired substantially all of the assets of The
Gwydion Company, LLC ("Gwydion"). The acquisition was recorded using the
purchase method of accounting and accordingly the purchase price was allocated
to the tangible and intangible assets acquired and liabilities assumed on the
basis of their fair values on the acquisition date, as determined by management.

The purchase consideration consisted of $754,000 in cash. Of the total purchase
price, $885,000 has been allocated to in-process technology, $34,000 has been
allocated to acquired workforce, and the remainder of the purchase price was
allocated to tangible assets acquired and liabilities assumed. Because the
in-process technology had not reached the stage of technological feasibility at
the acquisition date, and had no alternative future use, the amount was
immediately charged to operations. The amount allocated to acquired workforce is
being amortized over its estimated useful life of 3 years.

In connection with the acquisition the Company issued to Gwydion 573,334 shares
of the Company's common stock. These shares will be held in escrow for 18 months
to secure the seller's guarantee of successful completion of certain product
designs, and the continued employment of a key former employee of Gwydion. For
accounting purpose, this contingent consideration has been treated as a
compensation arrangement. An amount of $1,911,000 has been charged as research
and development expense during the year ended March 31, 2000 and an amount of
$4,969,000 is included in unearned compensation as of March 31, 2000.

The following unaudited pro forma combined condensed statement of operations are
derived from the historical consolidated financial statements of the Company and
Gwydion. The unaudited pro forma combined condensed statement of operations
presents the results of operations of Repeater Technologies for the year ended
March 31, 2000, combined with the statement of operations of Gwydion for the 7
months ended October 31, 1999. The unaudited pro forma combined condensed
statement of operations gives effect to the acquisition of substantially all of
the assets of Gwydion as if it had occurred as of April 1, 1999.

The following unaudited pro forma combined condensed statement of operations is
presented for illustrative purposes only and is not necessarily indicative of
the operating results that would have occurred if the transaction had been
consummated at the date indicated, nor is it necessarily indicative of future
operating results of the combined businesses. The unaudited pro forma combined
condensed statement of operations should be read in conjunction with the
historical consolidated financial statements and related notes of Repeater
Technologies, Inc. and The Gwydion Company, LLC included elsewhere herein.

F-32
<PAGE> 106

REPEATER TECHNOLOGIES, INC.

UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
REPEATER GWYDION
TECHNOLOGIES SEVEN MONTHS ENDED
MARCH 31, OCTOBER 31, PRO FORMA PRO FORMA
2000 1999 ADJUSTMENTS COMBINED
------------ ------------------ ----------- ---------
<S> <C> <C> <C> <C>
Net revenues.............................. $ 16,953 $ -- $ 16,953
Cost of revenues.......................... 12,145 -- 12,145
-------- ----- --------
Gross profit.............................. 4,808 -- 4,808
-------- ----- --------
Operating Expenses:
Research and development................ 7,349 417 7,766
Sales and marketing..................... 7,075 90 7,165
General and administrative.............. 2,997 100 7(A) 3,104
In-process research and development..... 885 -- (885)(B) --
-------- ----- ----- --------
Total operating expenses........ 18,306 607 (878) 18,035
-------- ----- ----- --------
Loss from operations...................... (13,498) (607) 878 (13,227)
Other income (expenses), net.............. (1,542) (11) (90)(C) (1,643)
-------- ----- ----- --------
Net loss.................................. $(15,040) $(618) $ 788 $(14,870)
======== ===== ===== ========
Net loss per common share -- basic and
diluted................................. $ (6.00) $ (5.93)
======== ========
Shares used in net loss per shares
calculation -- basic and diluted........ 2,508 2,508
======== ========
Pro forma net loss per common
share -- basic and diluted
(unaudited)............................. $ (0.98) $ (0.97)
======== ========
Shares used in pro forma net loss per
common share calculation -- basic and
diluted................................. 15,352 15,352
======== ========
</TABLE>

F-33
<PAGE> 107

REPEATER TECHNOLOGIES, INC.

NOTES TO THE UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF OPERATIONS

The following adjustments were applied to the Company's historical financial
statements and those of Gwydion to arrive at the pro forma combined financial
information.

A. To record the amortization of workforce in place as if the transaction
occurred on April 1, 1998. The acquired workforce amounted to $34,000 and is
amortized on a straight-line basis over three years.

B. To eliminate the write-off of the value assigned to in-process technology. An
independent appraisal was performed to determine the fair value of the
identifiable assets, including the portion of the purchase price attributed
to the in-process technology. The income approach was used to value acquired
in-process technology, which includes an analysis of the completion costs,
cash flows, other required assets and risks associated with achieving such
cash flows. The present value of this cash flows are then calculated with a
discount rate of 30%. At the time of acquisition, the Company determined the
technological feasibility of Gwydion's product had not been established, and
accordingly, wrote-off the amount to acquired in-process technology.

C. To record the interest expense related to the $754,000 cash consideration,
using a 12% interest rate (which represents Repeater's incremental borrowing
rate).

F-34
<PAGE> 108

4,750,000 SHARES

REPEATER TECHNOLOGIES, INC.

COMMON STOCK

[REPEATER TECHNOLOGIES LOGO]

---------------------------
PROSPECTUS
---------------------------

Until September 2, 2000, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.

U.S. BANCORP PIPER JAFFRAY

BANC OF AMERICA SECURITIES LLC

August 8, 2000