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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended September 30, 2004

Or

For the transition period from              to             

Commission file number 0-28450

Netopia, Inc.

(Exact name of registrant as specified in its charter)

6001 Shellmound Street, 4^th Floor

Emeryville, California 94608

(Address of principal executive offices, including Zip Code)

(510) 420-7400

(Registrant’s telephone number, including area code)

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

Indicate by check ü if disclosure of delinquent filers pursuant to Item 405 of regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check ü whether the registrant is an accelerated filer.    Yes  þ    No  ¨

As of the last business day of the registrant’s most recently completed second fiscal quarter, March 31, 2004, the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold was $282,201,021.

As of January 28, 2005, there were 24,899,119 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

No documents are incorporated by reference herein.

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NETOPIA, INC.

FORM 10-K

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PART I

ITEM 1. BUSINESS

Some of the information in this Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “may,” “will,” “should,” “expect,” “anticipate,” “potential,” “believe,” “estimate,” “intends” and “continue” or similar words. You should read statements that contain these words carefully because they: (i) discuss our expectations about our future performance; (ii) contain projections of our future operating results or of our future financial condition; or (iii) state other “forward-looking” information. There will be events in the future that we are not able to predict or over which we have no control, which may adversely affect our future results of operations, financial condition or stock price. The risk factors described in this Form 10-K, as well as any cautionary language in this Form 10-K, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we described in our forward-looking statements. You should be aware that the occurrence of any of the risks, uncertainties, or events described in this Form 10-K could seriously harm our business and that, upon the occurrence of any of these events, the price of our common stock could decline. All forward-looking statements included in this Form 10-K are based on information available to us on the date hereof. We assume no obligation to update any such forward-looking statements.

Company Background

We develop, market and support broadband and wireless (Wi-Fi) products and services that enable our carrier and service provider customers to simplify and enhance the delivery of broadband services to their residential and business-class customers. Our product and service offerings enable carriers and broadband service providers to (i) deliver to their customers feature-rich broadband modems, routers and gateways, (ii) utilize software that allows remote management of equipment located at their customers’ premises, and (iii) provide value added services to enhance revenue generation and reduce support costs for their customers. Our broadband modems, routers and gateways are installed by the customers of carrier and broadband service providers to obtain high-speed, always-on access to the Internet. Our digital subscriber line (DSL) and other broadband gateways are often bundled with virtual private networking (VPN) capabilities that allow more secure communications over the Internet, firewall protection, parental controls, hot spot access, Web content filtering, combined voice and data services, hosting of web sites that we call eSites, and hosting of web stores that we call eStores. Our Netopia Broadband Server (NBBS) software platform products enable remote support and management of installed broadband gateways and centralized service provisioning for value-added broadband services such as parental controls or hot spot access. This architecture allows carriers and broadband service providers to provide support to their customers on a remote basis and potentially reduce the cost of installation and broadband service provisioning over the lifetime of the customer. We also offer Timbuktu and eCare software products for enterprise help desk customers and IT organizations. These products allow help desks to provide support on a remote basis when computer users experience problems or require additional software upgrades for their desktop or laptop computers.

We were incorporated in California in 1986 as Farallon Computing, Inc. In 1996 we were reincorporated in Delaware as Farallon Communications, Inc. In November 1997, we changed our name to Netopia, Inc. We initially focused on the development of networking products for AppleTalk local area networks (LANs). In 1993, we revised our business strategy to concentrate on the Internet and Intranet markets by using our transmission control protocol/Internet protocol (TCP/IP) and routing expertise. In 1998, we introduced our family of DSL broadband equipment. In 2002, we expanded and enhanced our broadband product and service offerings, primarily as a result of the technology acquired in connection with our acquisitions of Cayman Systems, Inc. (Cayman) and DoBox, Inc. (DoBox). In October 2003, we acquired JadeSail Systems, Inc. (JadeSail), a provider of Internet Protocol (IP) services management and network equipment provisioning software. We have integrated JadeSail’s technology into our NBBS platform, adding policy-based IP Services definition and provisioning for firewall and VPN services. In 2003, we introduced our Wi-Fi modems and gateways. In 2004, we introduced new broadband value-added service offerings, which include turnkey hot spot venue access and parental controls. We additionally enhanced our product line of broadband modems, routers and gateways to support triple play

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services (voice, video and data) and to support the data requirements of carriers focused on deploying high-speed triple play networks over fiber, commonly known as fiber to the home (FTTH) or fiber to the premises (FTTP). Our principal offices are located at 6001 Shellmound Street, 4^th Floor, Emeryville, California 94608, and our telephone number is (510) 420-7400.

Unless the context otherwise required, in this Annual Report on Form 10-K, the terms “Netopia,” “the Company,” “we,” “us,” and “our” refers to Netopia, Inc. and its subsidiaries. Our fiscal year ends on September 30 and fiscal years are referred to by the calendar years in which they end. For example, “fiscal year 2004” and “fiscal 2004” refer to the fiscal year ended September 30, 2004.

Products and Services

Broadband Equipment. We have developed a comprehensive family of broadband Internet modems, routers and gateways, which allow the transport of high-speed data over carrier networks including the local copper loop and new deployments of fiber-optic networks. This family of products serves many of wide area network (WAN) interfaces including DSL, Ethernet and T1, and LAN interfaces including Wi-Fi and Ethernet. Our broadband Internet products are designed to deliver high performance, excellent reliability, scalability, and affordability, and to be a platform from which our carrier and service provider customers can offer their customers additional services and applications. We believe key components to our success are comprehensive interoperability with leading central office DSL equipment, a common firmware platform across all versions of our broadband Internet products, and technology such as our 3-D Reach^™ technology which we believe gives our Wi-Fi products greater and more reliable wireless coverage than that of many of our competitors. The substantial majority of our revenues are derived from sales of our broadband Internet products, in particular our DSL modems, routers and gateways. During fiscal years 2004, 2003 and 2002, revenues from the sale of our broadband Internet products accounted for 84.6%, 79.4% and 70.9%, respectively, of our total revenues.

The following table summarizes our broadband equipment product family and their applications:

Broadband Software and Services. Our service delivery platform includes the Netopia Broadband Server software (NBBS), which enables carrier and service providers to manage remotely Netopia and other third party devices and to deliver value-added broadband services. The NBBS platform includes modules that perform different functions: “Zero Touch” provisioning for the initial installation of broadband equipment at the customer

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premises and ongoing remote administration and support; Hot Spot Manager for the provisioning, authentication and management of hot spot venue access; Parental Controls for Web content filtering and email and chat management; VPN Policy Manager for the setup and administration of secure VPN enabled WAN networks. Our eCommerce solution provides “no assembly required” Web sites and online stores that we call eSites and eStores, with a wide variety of vertical market content packages to suit many needs, from franchisees to sole proprietors. Our systems management software includes Timbuktu, a systems management tool providing remote computer control, configuration, support and file transfer. We hold one United States patent relating to Timbuktu systems management software. The term of this patent is through August 2010. During fiscal years 2004, 2003 and 2002, revenues from the sale of our broadband software and services have accounted for 15.4%, 20.6% and 29.1%, respectively, of our total revenues.

The following table summarizes our broadband software and services product family:

Broadband Technology

DSL

The substantial majority of our business is based and dependent upon products that utilize DSL technology. This technology uses complex modulation methods to enable high-speed data services over copper phone lines. DSL technology allows the simultaneous transmission of data at speeds from 1 Megabit per second (Mbps) to

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24Mbps, or many times faster than standard 56 Kilobits per second (Kbps) modem service, while also providing standard analog telephone service over a single pair of copper wires at distances of up to 20,000 feet. With DSL technology, a user can talk and have high-speed data transmissions at the same time over a regular phone line. DSL products enable telecommunication carriers to provide interactive multimedia services over copper wire while simultaneously carrying traditional telephone services, thus mitigating the need for the telecommunication carriers to install second lines to support these services. Our products support many DSL WAN interfaces such as: asynchronous DSL (ADSL, ADSL2, ADSL2+ and VDSL) which refers to DSL technology that provides bi-directional transmission capacity at varying speeds; and symmetric DSL (SDSL), symmetric high bit-rate SDL (SHDSL) and integrated services digital network DSL (IDSL), each of which refers to DSL technology that provides bi-direction transmission capacity at the same speeds.

The DSL connection, or link, is comprised of a DSL Access Multiplexer (DSLAM), which we do not build or sell, and a DSL modem, gateway or router, which we do build and sell. The DSLAM is a piece of equipment that typically resides in the telephone carrier’s central offices and aggregates, or multiplexes, multiple DSL access lines into the carrier’s high-speed line back to its core or central network. The DSL modem, gateway, or router resides at the user’s location, and is a small device enabling DSL services at the user’s premises.

Fiber-to-the-Premises (FTTP)

Carriers and services providers are seeking to deliver triple play services including voice, video and data for increased market penetration and incremental revenue. These services demand higher bandwidth and quality of service (QoS) capabilities. As a result, new investments are being made in high-speed fiber-optic networks and VDSL technology, which enables improved data transmission rates to the home or business subscriber.

The fiber-optic network is comprised of an Optical Line Terminal located in the carrier’s central office, which aggregates fiber-optic connections. The premise connection consists of either a remote VDSL DSLAM, which then connects via copper to the home, or office or the fiber-optic cable is connected directly to an Optical Network Terminator (ONT), which delivers up to 100Mbps via Ethernet into the home or office. Netopia does not develop, sell or market these devices however we do provide the gateway, which resides in the home or office and connects directly to the VDSL DSLAM or ONT.

Customers

We sell our products in the United States, and internationally, primarily in Europe, to:

We expect that the success of our operations will remain substantially dependent upon our ability to develop and enhance products that meet the needs of both the residential and business market for DSL and Wi-Fi services and requirements of our ILEC customers. Our major customers are significantly larger than we are, and are able to exert a high degree of influence over our business. For example, our larger customers may be able to reschedule or cancel orders without significant penalty and may force lengthy approval and purchase processes before purchasing our products.

Distribution, Sales and Marketing

We sell our products through a domestic and international field sales organization and through selected distributors. We market our products in the United States and Europe both directly and through distributors, and

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in Canada and the Asia Pacific region through distributors. Our broadband equipment products are generally sold directly to our carrier and service provider customers or in some cases to distributors who then resell our products. Our broadband software and services are generally sold directly to our customers.

The sales process for both our broadband equipment and broadband services can be lengthy. At the first stage of the process, our telecommunication carrier customers invite us, and many competitors, to respond to detailed requests for information or proposal. Even if our products are selected for further consideration after receiving our response to such a request, prior to selling our broadband equipment to telecommunication carriers, the products and services generally undergo lengthy approval and purchase processes. Although the telecommunication carrier approval processes vary to some extent depending on the customer and the product being evaluated, they generally are conducted as follows:

Although our business historically was not materially affected by seasonal trends, to the extent that our customers market our products to residential customers more widely, we believe that we may experience increased seasonality. The effect of this seasonality is that our first fiscal quarter may benefit, and that our second fiscal quarter may be weaker than the preceding first fiscal quarter, which we experienced in fiscal year 2004.

Research and Development

We believe that our future business and operating results depend in part on our ability to continue to develop new products and enhance existing products in a timely manner, and to develop strategic product development relationships. We continuously evaluate changing market needs to provide customers with new broadband equipment and services incorporating new technologies, standards and functionality. We continue to make a significant investment in product engineering, research and development. Research and development (“R&D”) expenses were $15.8 million, $15.6 million and $17.4 million for fiscal years 2004, 2003 and 2002, respectively. We expect to continue to devote substantial resources to product and technological development.

Our R&D personnel are organized into development teams focused either on the development of our broadband equipment, our NBBS software platform or our systems management software. Each product development team is generally responsible for conceiving new products for its target markets, adapting standard products or technology to meet new customer needs, and sustaining engineering activities related to our existing products. In particular, our hardware development team endeavors to achieve enhanced product performance and reduced product costs for each succeeding generation of broadband equipment product. We believe the key to this strategy is developing an initial architecture for each product that enables engineering innovations to result in performance enhancements and future cost reductions.

We compete in markets characterized by continuing technological advancement, changes in customer requirements and evolving industry standards. To compete successfully, we must design, develop, manufacture and sell new or enhanced products and services that provide increasingly higher levels of performance, reliability, compatibility, and cost savings for our customers. We may not be able to successfully develop, introduce, enhance or market these or other products and services necessary to our future success. In addition, any delay in developing, introducing or marketing these or other products would seriously harm our business.

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Product and Customer Support

We believe that effective product and customer support are important criteria used by our customers in selecting our broadband equipment and service offerings. Telecommunication carriers, ISPs, independent distributors and dealers, value-added resellers (VARs), end users, network managers and administrators, consultants and other experienced technical experts utilize our telephone support lines, fax and online support services to access our support personnel and internal technical databases. Additionally, support personnel are trained to satisfy the needs of our customers and end users, as well as the needs of our customers’ end users who are not technical experts and do not have access to sophisticated technical support. We believe that our support programs have been successful in creating brand loyalty through our focused support of the specialized needs of these customers and end users, and through the easy-to-use, plug-and-play design of our broadband equipment and services.

With different service programs, including VPN set-up services enabled by VPN Policy Manager, we can remotely configure our Internet gateways and assist users in setting up Internet service with the user’s telecommunication carrier and ISP. Our expertise in solving technical problems enables us to commit our resources to analyze any problem a customer or end user may have, even if it involves a product from another company. We believe that the effect of these activities is to build customer loyalty to us as the single source for broadband equipment and services.

Manufacturing

We primarily utilize third-party contract manufacturers, and have a limited internal configuration capability, to meet our customer requirements and product demand. Our third-party contract manufacturers produce our hardware products in factories primarily located in Thailand, China and Mexico. They produce substantially all of the circuit boards for our broadband equipment and in certain circumstances assemble, package and ship our products directly to our customers. Reliance on third-party subcontractors involves several risks, including the potential absence of adequate capacity and reduced control over product quality, delivery schedules, manufacturing yields and costs.

Competition

The markets for our broadband equipment and broadband services are intensely competitive, highly fragmented and characterized by rapidly changing technology, evolving industry standards, price competition and frequent new product introductions. A large number of companies offer competitive products. We expect competition to intensify as current competitors expand their product and service offerings and new competitors enter the market. Increased competition is likely to result in price reductions, reduced gross margins and loss of market share, any one of which could seriously harm our business.

Competitors vary in size, scope and breadth of the products and services offered. Our current and prospective competitors include original equipment manufacturers (OEMs), product manufacturers of broadband equipment, developers of Web site and e-commerce software, developers of remote control and collaboration software, and developers of Web based help desk applications. In the market for broadband equipment and services, we primarily compete with 2Wire, Inc., Siemens AG (through its Siemens Subscriber Networks, Inc. subsidiary, formerly known as Efficient Networks), Thomson Corporation, Westell Technologies, Inc. and ZyXEL Communications Co. In the market for our broadband software and services products, we primarily compete with Altiris, Inc., Computer Associates International, Inc., CrossTec Corporation, Expertcity, Inc., LANDesk Software, Inc., Microsoft Corporation and Symantec Corporation.

Many of our current and potential competitors in each product area have longer operating histories, significantly greater financial, technical, marketing and other resources, significantly greater name recognition and a larger base of customers than we do. In addition, many of our competitors have well-established relationships with our current and potential customers and have extensive knowledge of these industries. In the

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past, we have lost potential customers to competitors in each product area for various reasons, including lower prices and other incentives that we did not match. Furthermore, new competitors or alliances among competitors may emerge and rapidly acquire significant market share. We also expect that competition will increase as a result of industry consolidation.

We believe that the principal competitive factors in our markets are:

We cannot provide assurance that we will be able to compete successfully in the future. Our inability to successfully compete would seriously harm our business.

Intellectual Property and Other Proprietary Rights

Our ability to compete is dependent in part on our proprietary rights and technology. We rely primarily on a combination of patent, copyright, trademark and trade secret laws, confidentiality procedures and contractual provisions to protect our proprietary rights. We presently have one United States patent issued that relates to eCare and Timbuktu and remote control software. The term of this patent is through August 2010. We also have filed a patent application relating to the design of our Wi-Fi DSL gateways. We generally enter into confidentiality or license agreements with our employees, consultants, resellers, distributors, customers and potential customers and limit access to the distribution of our software, hardware designs, documentation and other proprietary information. However, in some instances, we may find it necessary to release our source code to certain parties.

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary. Policing unauthorized use of our products is difficult, and there is no guarantee the safeguards we employ will protect our intellectual property and other valuable competitive information. In addition, the laws of some foreign countries where our products are or may be manufactured or sold, particularly developing countries including various countries in Asia, do not protect our proprietary rights as fully as do the laws of the United States. We rely upon certain software, firmware and hardware designs that we license from third parties, including firmware that is integrated with our internally developed firmware and used in our products to perform key functions. We cannot be certain that these third-party licenses will continue to be available to us on commercially reasonable terms. The loss of, or inability to maintain, such licenses could result in shipment delays or reductions until equivalent firmware is developed or licensed, and integrated into our products, which would seriously harm our business.

There has been a substantial amount of litigation in the software and Internet industries regarding intellectual property rights. Although we have not been party to any such litigation, in the future, third parties may claim that our current or potential future products or we infringe their intellectual property. The evaluation

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and defense of any such claims, with or without merit, could be time-consuming and expensive. Furthermore, such claims could cause product shipment delays or require us to enter into royalty or licensing agreements on financially unattractive terms, which could seriously harm our business.

Employees

As of January 28, 2005, we employed 261 persons, including 84 in research and development, 65 in sales and marketing, 28 in professional services, 29 in customer service and support, 26 in manufacturing operations, and 29 in general and administrative functions. We also contract with consultants who provide us short and long-term services in various areas of our business. During the past two years, we have reduced our workforce to align expenses better with revenue levels. None of our employees is represented by a collective bargaining agreement, nor have we experienced any work stoppage. We consider our relations with our employees to be good.

Our future performance depends on the continued service of our senior management, product development and sales personnel, particularly Alan Lefkof, our President and Chief Executive Officer. With the exception of our Interim Senior Vice President and Chief Financial Officer, who entered into a six month employment agreement commencing in October 2004, none of our employees is bound by an employment agreement, and we do not carry key person life insurance. The loss of the services of one or more of our key personnel could seriously harm our business. Competition for qualified personnel in our industry and geographic location is intense. Although we believe that our personnel turnover rate is consistent with industry norms, our future success depends on our continuing ability to attract, hire, train and retain a substantial number of highly skilled managerial, technical, sales, marketing and customer support personnel as well as provide extensive training to new hires so they achieve desired levels of productivity.

Segment Financial Information

You can find certain financial information with respect to our reportable segments and geographic areas in which we operate in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 8, Financial Statements and Supplementary Data, particularly Note 10 of Notes to Consolidated Financial Statements.

Available Information

The Company’s Internet website address is http://www.netopia.com. At this website we make available, free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish them to, the SEC. Our SEC reports can be accessed through the investor relations section of our website. The information found on our website is not part of this report or any report we file with, or furnish to, the SEC.

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ITEM 2. PROPERTIES

Each of the facilities we occupy is leased for a term of one to five years. We believe that our existing facilities are adequate for our current needs and that additional space sufficient to meet our needs for the foreseeable future will be available on reasonable terms. Since our California facilities are located near major earthquake fault lines in the San Francisco Bay area, our business could be seriously harmed in the event of a major earthquake. The following table sets forth our facilities and their related lease terms as of September 30, 2004:

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ITEM 3. LEGAL PROCEEDINGS

We are named as a defendant in an action pending in the United States Bankruptcy Court for the Northern District of California entitled E. Lynn Schoenmann, trustee of NorthPoint Communications, Inc. v. Netopia. In this action commenced on January 11, 2003, the trustee of the bankruptcy estate of NorthPoint Communications, Inc. (“NorthPoint”) is seeking to recover approximately $1.2 million that NorthPoint paid to us within the 90 day preference period before NorthPoint filed for bankruptcy in January 2001. NorthPoint’s trustee is claiming that NorthPoint was insolvent at the time it made these payments, and that therefore the payments are recoverable preferences within the meaning of the Bankruptcy Code. We believe that we have defenses to the claims asserted by NorthPoint’s trustee, and we intend to continue to defend ourselves vigorously. We do not believe that the outcome of this lawsuit is likely to harm our business seriously.

In August 2004, the first of four purported class action complaints, Valentin Serafimov, on behalf of himself and all others similarly situated, v. Netopia, Inc., Alan B. Lefkof and William D. Baker, was filed in the United States District Court for the Northern District of California. The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The complaint alleged that during the purported class period, November 6, 2003 and July 6, 2004, we made materially false, misleading and incomplete statements and issued false and misleading reports regarding our earnings, product costs, and sales to foreign customers. The other three complaints that subsequently were filed made additional related claims based on the same announcements and allegations of misstatements. As provided in the Private Securities Litigation Reform Act of 1995, the plaintiffs in these actions filed motions to consolidate and to appoint lead plaintiff and lead plaintiff counsel. On December 3, 2004, the court issued an order consolidating the cases under the name In re Netopia, Inc. Securities Litigation, and appointing a lead plaintiff and plaintiff’s counsel. The lead plaintiff has not filed its consolidated amended complaint. We believe that we have strong defenses to the claims asserted in the complaints as initially filed. We intend to defend the case vigorously.

In August 2004, the first of four purported derivative actions, Freeport Partners, LLC, Derivatively on Behalf of Nominal Defendant Netopia, Inc., v. Alan B. Lefkof, William D. Baker, Reese M. Jones, Harold S. Wills, Robert Lee and Netopia, Inc., was filed in the United States District Court for the Northern District of California. Two purported derivative actions are pending in the United States District Court for the Northern District of California, and two related purported derivative actions are pending in the Superior Court of California for the County of Alameda. These actions make claims against our officers and directors arising out of the same announcements and alleged misstatements described above in connection with the purported class actions. In November 2004, the derivative plaintiffs agreed to coordinate the four derivative actions. The parties have agreed to a stay of the federal derivative actions, which was ordered by the court in January 2005. The state actions have been consolidated under the name In re Netopia, Inc. Derivative Litigation. The plaintiffs have not filed their consolidated amended complaint. We believe that we have strong defenses to the claims asserted in the complaints as initially filed. We intend to defend the cases vigorously.

On October 29, 2004, we were advised by the Securities and Exchange Commission that an informal inquiry previously commenced by the Securities and Exchange Commission had become the subject of a formal order of investigation. This investigation is to determine whether the federal securities laws have been violated. We cooperated fully with the informal inquiry, and we are cooperating fully with the formal investigation. Responding to the formal investigation will likely continue to require significant attention and resources of management. If the Securities and Exchange Commission elects to pursue an enforcement action, the defense against this type of action could be costly and require additional management resources. If we were unsuccessful in defending against this or other investigations or proceedings, we could face civil or criminal penalties that would seriously harm our business and results of operations.

In January 2005, we were notified by the Occupational Health and Safety Administration (OSHA) that Netopia was named in an administrative complaint filed by two former employees alleging violations of Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1514A, also known as the Sarbanes-Oxley Act. The former employees allege the Company terminated them in retaliation for their

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participation in the Internal Accounting Review conducted by the audit committee. We filed a response to the complaint on January 21, 2005 with OSHA. (The Internal Accounting Review is described below in greater detail in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation.) The agency has not determined whether it will conduct an investigation into this matter. We believe that we have strong defenses and intend to defend the complaint vigorously.

Defending against the securities class action and derivative actions will likely require significant attention and resources of management and, regardless of the outcome, result in significant legal expense. If our defenses ultimately are unsuccessful, or if we are unable to achieve a favorable settlement, we could be liable for large damage awards that could seriously harm our business and results of operation. While we have provided notice of the securities class action and derivative actions to our directors and officers liability insurance carriers, the insurance carriers have not agreed to pay for our legal expenses incurred in defending against these actions or agreed that they are responsible to pay any damages that ultimately could be awarded to the plaintiffs. Furthermore, we have only a limited amount of insurance, and even if our insurers agree to make payments under the policies, the damage awards or settlements may be greater than the amount of insurance, and we would in all cases be liable for any amounts in excess of our insurance policy limits.

In addition to the lawsuits described above, from time to time we are involved in other litigation or disputes that are incidental to the conduct of our business. We are not party to any such other incidental litigation or dispute that in our opinion is likely to seriously harm our business.

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

There were no matters submitted to a vote of our security holders during the fiscal fourth quarter ended September 30, 2004.

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers, and their ages as of January 28, 2005, are as follows:

Alan B. Lefkof. Mr. Lefkof, President, Chief Executive Officer and Director, joined Netopia as President and a member of the Board of Directors in August 1991 and has been Chief Executive Officer since November 1994. Mr. Lefkof received a B.S. in computer science from the Massachusetts Institute of Technology in 1975 and a M.B.A. from Harvard Business School in 1977.

Mark H. Perry. Mr. Perry joined Netopia in October 2004 as Interim Senior Vice President and Chief Financial Officer. Prior to joining Netopia, Mr. Perry served as Senior Vice President and Controller for URS Corporation from 2001 to 2004. Previously, Mr. Perry served as Executive Vice President and Chief Financial Officer at Covad Communications Group Inc. from 2000 to 2001, and as Vice President of Finance and Administration for U.S. West, Inc., where he worked for 11 years. Mr. Perry received a B.S. in Accounting from Fairleigh Dickinson University in 1972 and is a Certified Public Accountant.

Brooke A. Hauch. Ms. Hauch, Senior Vice President, Professional Services, joined Netopia in October 1991 as Director, MIS. Ms. Hauch was appointed Vice President and Chief Information Officer in May 1997, and became Senior Vice President in October 2000. Ms. Hauch received a bachelor’s degree in business from Arizona State University.

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David A. Kadish. Mr. Kadish, Senior Vice President, General Counsel and Secretary, joined Netopia in June 1999. Mr. Kadish provided legal services to Netopia as a consultant from September 1996 to June 1999. Mr. Kadish received a B.A. in American history from University of California at Santa Cruz in 1973, a M.A. in American history from Brandeis University in 1974 and a J.D. from Yale University in 1979.

Bao Nguyen. Mr. Nguyen joined Netopia in June 2004 as Vice President of Software Engineering. Prior to joining Netopia, Mr. Nguyen served as Vice President of Software Engineering at 2Wire, Inc. from 2002 to 2004, Vice President of Software Engineering at TCSI, Inc. in 2001, and Vice President of Research & Development at GVN Technologies, Inc. in 2000. Mr. Nguyen received a BSEE degree (Bachelor of Science in Electrical Engineering) from the University of Minnesota in 1987, and a M.B.A. from the University of St. Thomas in 1990.

Jeffrey G. Porter. Mr. Porter, Vice President, Marketing, joined Netopia in July 1991 as a Sales Representative. Mr. Porter was appointed Vice President, Software Product Marketing in November 1999. He was appointed to his current position in October 2001. Mr. Porter received a B.A. in Management Science from University of California at San Diego in 1986.

Dano Ybarra. Mr. Ybarra, Senior Vice President, Sales and Marketing, joined Netopia in July 2003 as Vice President of Business Development, was named Vice President of Marketing in January 2004, and took on his current role in September 2004. Prior to joining Netopia, he served as a Vice President and General Manager, Business Solutions Division of the Siemens Subscriber Networks, Inc. subsidiary of Siemens AG, formerly Efficient Networks, from 1997 to 2003. Mr. Ybarra received a B.S. in Computer Science from Portland State University in 1984.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Following our initial public offering in June 1996, our common stock traded on the NASDAQ Stock Market. Effective October 20, 2004, our stock was delisted because we had failed as of that date to file our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004, due to an internal accounting review. For additional information on the internal accounting review and related restatements, see Note 2 of Notes to Consolidated Financial Statements.

Effective October 20, 2004, our common stock has been trading on the National Daily Quotations Journal, often referred to as the “pink sheets,” where subscribing dealers can submit bid and ask prices on a daily basis. Our common stock symbol on the “pink sheets” is NTPA.PK.

The following table sets forth the range of quarterly high and low sale prices of our common stock on the Nasdaq Stock Market for the last two fiscal years ended September 30, 2004 and 2003.

On January 28, 2005, we had 152 stockholders of record and 24,899,119 shares of common stock outstanding. The closing price of our common stock as reported on the National Daily Quotations Journal was $4.05 per share. Historically, we have neither declared nor paid cash dividends on our common stock, and we expect this trend to continue. We maintain stock option plans under which we grant options to purchase our common stock and an Employee Stock Purchase Plan under which our common stock is sold to employees participating in such plans. Additional information with respect to these plans can be found in Note 10 of Notes to Consolidated Financial Statements. We did not repurchase any of our shares of common stock in the fiscal quarter ended September 30, 2004.

The market price of our common stock may fluctuate significantly in response to a number of factors, including the following, some of which are beyond our control:

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In recent years the stock market in general, and the market for shares of high technology stocks in particular, have experienced extreme price fluctuations, which often have been unrelated to the operating performance of affected companies. There can be no assurance that the market price of our common stock will not experience significant fluctuations in the future, including fluctuations that are unrelated to our performance.

Sales of Unregistered Securities

In October 2003, we issued 160,000 shares of our common stock to the shareholders of JadeSail as consideration for our acquisition of JadeSail. We filed on December 30, 2003 a registration statement on Form S-3 registering possible resale of the common stock issued in the transaction, and this registration statement became effective on January 17, 2004.

In August 2003, we sold 1,413,914 shares of our common stock in a private placement to a limited number of qualified institutional investors. The aggregate offering price totaled $6.5 million. We paid a fee in the amount of approximately $0.4 million to CDC Securities for services related to introducing certain of the investors to us. Net of fees and expenses, we received $6.1 million, which was used to increase our working capital. We filed on August 18, 2003 a registration statement on Form S-3 registering possible resale of the common stock issued in the transaction, and this registration became effective on September 2, 2003.

In March 2002, we issued 300,000 shares of our common stock to the shareholders of DoBox as consideration for our acquisition of DoBox. We filed on May 7, 2003 a registration statement on Form S-3 registering possible resale of the common stock issued in the transaction, and this registration became effective on July 17, 2003.

The sale and issuance of the securities of the securities described above were effected without general solicitation or advertising and were deemed to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) of the Securities Act, in light of, among other facts, the small number and sophistication of the persons receiving the shares and the investment representations made by those persons.

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ITEM 6. SELECTED FINANCIAL DATA

In the tables below, we provide our selected consolidated financial data. We have prepared this information using our audited consolidated financial statements for the five fiscal years ended September 30, 2004, including the restated financial statements for the fiscal years ended September 30, 2003 and 2002. It is important that when reading this information you also read Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, the annual audited consolidated financial statements and related notes thereto included elsewhere in this Form 10-K.

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The following table sets forth certain unaudited quarterly results of operations data for the twelve quarters ended September 30, 2004. This data has been derived from our unaudited interim consolidated financial statements, as restated, that, in our opinion, include all adjustments necessary for a fair presentation of such information. The restated financial statements include all quarters in the fiscal years ended September 30, 2003 and 2002, and the quarters ended December 31, 2003 and March 31, 2004. When reading this information, you also should read Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and related notes thereto included elsewhere in this Form 10-K.