AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 2001

REGISTRATION NO. 333-58362

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
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COM21, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 7370 94-3201698
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE) IDENTIFICATION NUMBER)

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750 TASMAN DRIVE
MILPITAS, CALIFORNIA 95053
(408) 953-9100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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CRAIG SODERQUIST
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COM21, INC.
750 TASMAN DRIVE
MILPITAS, CALIFORNIA 95053
(408) 953-9100
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

COPIES TO:
JOHN M. MONTGOMERY, ESQ.
BROBECK, PHLEGER & HARRISON LLP
TWO EMBARCADERO PLACE
2200 GENG ROAD
PALO ALTO, CALIFORNIA 94303
(650) 424-0160
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable on or after this Registration Statement is declared
effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the
following box and list the Securities Act of 1933, as amended, registration
statement number of the earlier effective registration statement for the same
offering. [ ] _____

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, as amended, check the following box and list
the Securities Act of 1933, as amended, registration statement number of the
earlier effective registration statement for the same offering. [ ] _____

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.

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The information contained in this prospectus is not complete and may be
changed. The selling stockholders may not sell these securities until
the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

(SUBJECT TO COMPLETION, DATED MAY 23, 2001)

4,900,000 Shares

COM21, INC.

Common Stock

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

This prospectus relates to the sale of up to 4,900,000 shares of our common
stock by the selling stockholder identified in this prospectus on page 12. This
amount includes 2,450,000 shares of common stock acquired by the selling
stockholder on March 6, 2001 pursuant to a subscription agreement and an
additional 2,450,000 shares of common stock potentially issuable upon exercise
of a currently outstanding warrant to purchase common stock held by the selling
stockholder. The prices at which the selling stockholder may sell the shares
will be determined by the prevailing market for the shares or in negotiated
transactions. We will not receive any proceeds from the sale of shares offered
under this prospectus. We will receive proceeds from the exercise of the
outstanding warrant by the selling stockholder and those proceeds will be used
for our general corporate purposes.

Our common stock is traded on the Nasdaq National Market under the symbol
"CMTO." The closing price on April 4, 2001 was $1.3125 per share.

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

THE SHARES OF OUR COMMON STOCK OFFERED OR SOLD UNDER THIS PROSPECTUS
INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THIS
PROSPECTUS TO READ ABOUT IMPORTANT FACTORS YOU SHOULD CONSIDER BEFORE BUYING THE
COMMON STOCK.

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

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

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

The date of this prospectus is May 23, 2001.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS.

THE COMPANY

Com21's principal executive offices are located at 750 Tasman Drive,
Milpitas, California 95053. Com21's telephone number is (408) 953-9100.

RISK FACTORS

You should carefully consider the following risks, as well as the other
information included or incorporated by reference in this prospectus, before
deciding whether you wish to purchase any of the shares offered hereby.

COM21 MAY BE CHARGED FOR EXCESS INVENTORY HELD OR ON ORDER WITH ITS CONTRACT
MANUFACTURERS WHICH WOULD REDUCE ITS REVENUES.

Our contract manufacturers have procured or have on order substantial
amounts of inventory to meet our revenues forecasts. If our future shipments do
not consume this inventory, these contract manufacturers have the right to
charge us for inventory carrying costs and to bill us for any excess component
and finished goods inventory. Through April 2001, we have been billed for
inventory carrying charges of approximately $600,000. As of the end of April
2001, our two largest contract manufacturers had approximately $69.0 million of
on hand inventory and purchase commitments for materials and components which
are used to manufacture our products. We must fulfill these obligations even if
demand for our products is lower than we anticipate which could reduce our
working capital and have a negative impact on our financial position.

COM21 MUST REDUCE THE COST OF ITS CABLE MODEMS TO REMAIN COMPETITIVE.

Some of our competitors have assets and annual revenues that far exceed
ours and because of their financial status are able to offer cable modem
products at lower prices than we can offer cable modems. As headend equipment
becomes more widely distributed, the price of cable modems and related equipment
will continue to decrease. In particular, the adoption of industry standards,
such as the Data-Over-Cable Service Interface Specification, or DOCSIS, standard
in North America, has caused increased price competition for cable modems. To
remain competitive, we may have to lower the price of our modems in anticipation
of planned product cost reductions of our DOCSIS modems. We may not be able to
continually reduce the costs of manufacturing our cable modems or to secure
component parts at a low enough cost to enable us to lower our modem prices and
to compete effectively. As we perform on our cost reduction program, we may not
be able to continue to certify our DOCSIS modems in a timely manner by various
standards bodies including CableLabs. If we are unable to continue to reduce the
manufacturing costs of our cable modems, our gross margin and operating results
could be harmed.

COM21'S MARKET IS HIGHLY COMPETITIVE AND HAS MANY ESTABLISHED COMPETITORS.

The market for our products is intensely competitive, rapidly evolving and
subject to rapid technological change. Our competitors include Motorola, Inc.,
Toshiba America, Inc., 3Com Corporation, RCA/Thomson, Terayon Communication
Systems, Cisco Systems, Inc., and Nortel Network, Inc. Many of our current and
potential competitors have been operating longer, have better name recognition,
more established business relationships and significantly greater financial,
technical, marketing and distribution resources than we do. These competitors
may undertake more extensive marketing campaigns, adopt more aggressive pricing
policies, undertake more vendor financing programs or longer customer payment
cycles

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and devote substantially more resources to developing new or enhanced products
than we do. Some competitors may sell their modems at below cost to reduce
excess inventories causing severe price competition.

COM21 MAY BE UNABLE TO OBTAIN ADDITIONAL CAPITAL NEEDED TO OPERATE AND GROW ITS
BUSINESS, WHICH COULD WEAKEN ITS FINANCIAL CONDITION AND MAKE IT UNABLE TO
DEVELOP ITS TECHNOLOGIES AND PRODUCTS.

If our financial resources are insufficient to fund our activities and
repay our debt, additional funds will be required. We cannot assure you that any
additional financing will be available on terms acceptable to us, or at all,
when required by us. If additional funds are raised by issuing equity
securities, significant dilution to existing stockholders may result given the
current price of our common stock. If additional funds are not available, we may
be required to delay, scale back, or eliminate one or more of our research and
development or manufacturing programs.

During 2000, we generated a net loss of approximately $56.1 million and for
the three months ended March 31, 2001, the net loss was $22.1 million. If we do
not increase revenues, improve gross margins and reduce operating expenses, we
may also incur net losses during future quarters. Because of a decline in our
revenues in the fourth quarter of 2000, we introduced measures to reduce
operating expenses that included reductions in our workforce in December 2000
and February 2001, the shutting down of our Maryland Development Center and the
Wireless Business Unit both in April 2001, and the announced sale of our Voice
Product Division (formerly GADline). Management continues to monitor market
conditions to assess the need to take further action, if necessary. Any
subsequent actions may result in additional workforce reductions, restructuring
charges, discontinuation of product lines and provisions for impairment of
long-lived assets which could materially adversely affect our results of
operations and stock price.

SUPPLY OF OUR PRODUCTS MAY BE LIMITED BY OUR ABILITY TO FORECAST DEMAND
ACCURATELY.

Our customers have increasingly been requiring us to ship product upon
ordering instead of submitting purchase orders far in advance of expected
shipment dates. This practice requires us to keep inventory on hand for
immediate shipment. Any significant cancellations or deferrals could adversely
affect our business by slowing our growth and decreasing our revenues. In
addition, cancellations or deferrals could cause us to hold excess inventory,
which could reduce our profit margins and restrict our ability to fund our
operations. In particular, increases in inventory could cause a material adverse
effect on operations if such inventory is not used or becomes obsolete. This
risk could be realized in inventory write-downs in any given period.

COM21 MAY BE SUBJECT TO PRODUCT RETURNS AND PRODUCT LIABILITY CLAIMS DUE TO
DEFECTS IN ITS PRODUCTS.

Our products are complex and may contain undetected defects, errors, design
deficiencies, or may have been manufactured incorrectly. Our products have
contained errors in the past and may contain errors in the future. As part of
our focus on customer support, we are currently evaluating a manufacturing error
in one of our cable modem products. We plan to test this product to determine
the rate of failure and, if necessary, we may repair a number of units. We have
not yet determined the potential costs of repairing these products. We believe
this is an issue with the manufacturing process of one of our contract
manufacturers. However, if we are not successful in negotiating with our
contract manufacturer to cover these costs, we may be subject to additional
costs to repair or replace these products in future periods. Defects, errors, or
failures in our other products could result in delayed shipments, returned
products, and loss or delay of market acceptance of Com21's products. We could
incur costs or losses in excess of amounts that we have reserved for these
events. Although Com21 has not experienced any product liability claims, due to
the highly technical nature of its products, such a risk exists. A successful
product liability claim brought against Com21 could have a material adverse
effect on our business, operating results and financial condition by forcing us
to use cash and personnel resources. This would limit our ability to grow the
company and would decrease our revenues.

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COM21'S STOCK PRICE IS HIGHLY VOLATILE AND BROAD MARKET FLUCTUATIONS MAY
ADVERSELY AFFECT THE MARKET PRICE OF ITS COMMON STOCK.

The trading price of our common stock has fluctuated significantly since
our initial public offering in May 1998. The common stock price has fluctuated
between $47 per share and $2 per share in the last twelve month period. The
price of our common stock could continue to be subject to wide fluctuations in
response to a variety of factors including quarterly variations in operating
results, announcements of technological innovations or new products by Com21 or
its competitors, announcements by certification and standards bodies, the state
of Com21's patents or proprietary rights, and changes in financial estimates by
securities analysts. Additionally, the stock market has experienced volatility
that has particularly affected the market prices of equity securities of many
high technology companies and that often has been unrelated or disproportionate
to the operating performance of these companies. Our stock price has declined
significantly and our stock price may continue to decline because of these broad
market and industry factors, regardless of our actual operating performance.
These broad market fluctuations may adversely affect the market price of Com21
common stock. Additionally, Com21 may choose to structure acquisitions or other
transactions by issuing additional Com21 common stock, or warrants or options to
purchase Com21 common stock that would have a dilutive affect on the common
stock currently outstanding. Although Com21 management believes these types of
transactions will increase the overall value of Com21, Inc., they may decrease
the market price of its common stock in the short term.

COM21'S REVENUES IN ONE OR MORE FUTURE PERIODS ARE LIKELY TO FLUCTUATE
SIGNIFICANTLY AND MAY FAIL TO MEET OR EXCEED THE EXPECTATIONS OF SECURITIES
ANALYSTS OR INVESTORS.

Com21's operating results are likely to fluctuate significantly in the
future on a quarterly and an annual basis due to a number of factors, many of
which are outside Com21's control. Supply of components, delays in getting new
products into high volume manufacturing, and manufacturing or testing
constraints could result in delays in the delivery of products and impact
revenues and gross margins.

Total revenues for any future quarter are difficult to predict. Delays in
the product distribution schedule of one or more of Com21's cable operator
customers would likely reduce Com21's operating results for a particular period.

Factors that could cause Com21's revenues to fluctuate include the
following:

- pressure to reduce prices;

- variations in the timing of orders and shipments of Com21's products;

- variations in the size of orders by Com21's customers;

- new product introductions by Com21 or by competitors;

- delays in certifying standards-based products;

- general economic conditions and economic conditions specific to the cable
and electronic data transmission industries;

- cable operators financial ability to purchase our products; and

- delays in obtaining CableLabs and regulatory approvals necessary to sell
our products.

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COM21'S GROSS MARGIN IN ONE OR MORE FUTURE PERIODS IS LIKELY TO FLUCTUATE
SIGNIFICANTLY AND MAY CAUSE OPERATING RESULTS TO FALL BELOW THE EXPECTATIONS OF
ANALYSTS AND INVESTORS.

Our operating results are impacted significantly by our ability to improve
and sustain gross margins. The factors which impact gross margins and cause them
to fluctuate from quarter to quarter include the following:

- pressures to reduce prices;

- changes in the cost of inventory;

- the sales mix within a product group, especially between proprietary and
DOCSIS modems;

- component prices we secure from our vendors;

- the average selling prices of our products;

- the effectiveness of our cost reduction efforts;

- the sales mix between our headend equipment and cable modems; and

- the volume of products manufactured.

Additionally, our inability to reduce inventory levels may result in
substantial inventory-related charges including marking component inventory to
current market prices because of falling component prices, and increasing excess
and obsolescence reserves because of slow moving inventory.

A reduction in gross margins would harm our operating results and reduce
the amount of cash flow generated from operations. In addition, if operating
results did not satisfy the expectations of analysts or investors, the trading
price of Com21's common stock would likely decline.

COM21 MAY BE SUBJECT TO ADDITIONAL CREDIT RISK IN THE FORM OF TRADE ACCOUNTS
RECEIVABLE.

Our standard credit terms are net 30 days from the date of shipment, and we
do not require collateral or other security to support customer receivables. We
may require letters of credit from a customer before shipping an order if we
determine that the customer has not proven itself to be creditworthy. Due to the
overall market decline during the second half of 2000, we have had difficulties
in receiving payment within our net 30 day payment terms resulting in an
increase in the number of days of sales outstanding as compared to the first
half of 2000. Our days sales outstanding increased from 57 days at June 30, 2000
to 83 days at March 31, 2001.

COM21 IS DEPENDENT ON KEY PERSONNEL AND THE SUCCESSFUL TRANSITION OF PRODUCT
MARKETING AND DEVELOPMENT ACTIVITIES TO ITS CORK IRELAND FACILITY.

Our future operating results depend greatly upon the continued contribution
of key technical and senior management personnel. Future operating results also
depend on the ability to attract and retain these specially qualified
management, manufacturing, quality assurance, engineering, marketing, sales, and
support personnel. Competition for these personnel is intense and Com21 may not
be successful in attracting or retaining these personnel. Only a limited number
of persons with the requisite skills to serve in these positions may exist and
it may be increasingly difficult for us to hire these personnel. In February
2001, Com21 began, and as of the end of April 2001 has almost completed the
transfer of the research and development, product management and marketing
functions for Com21's proprietary ComUNITY Access product line to its facility
in Cork, Ireland. We are making this transition to take advantage of the greater
availability of qualified personnel in Cork to support this product line.
However, the loss of any key Cork employee with technical, marketing or support
knowledge to Cork personnel may affect our ability to provide timely development
and support activities for the ComUNITY Access product line. Loss of personnel
or the inability to transfer knowledge could delay our product development
programs and our research and development efforts.

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COM21 MAY NOT BE ABLE TO PRODUCE SUFFICIENT QUANTITIES OF ITS PRODUCTS BECAUSE
IT DEPENDS ON THIRD-PARTY MANUFACTURERS, THEIR SUPPLIERS AND ORIGINAL EQUIPMENT
MANUFACTURERS AND HAS LIMITED MANUFACTURING EXPERIENCE.

Com21 contracts for the manufacture of cable modems and integrated circuit
boards on a turnkey basis. Our future success will depend, in significant part,
on our ability to have others manufacture our products cost-effectively, in
sufficient volumes and to meet production and delivery schedules. Dependence on
third-party manufacturers presents a number of risks including:

- not taking sufficient credit exposure on new product bids;

- lowering available credit limits;

- not providing sufficient payment terms;

- failure to meet delivery schedules;

- not building product in accordance with our quality standards;

- less than satisfactory manufacturing yields and costs;

- building product to meet our demand;

- difficulty in planning mix of units to be produced; and

- the potential misappropriation of our intellectual property if the
manufacturer were to market our products as its own.

Any manufacturing disruption could impair our ability to fulfill orders. We
have no long-term contracts or arrangements with any of our vendors that
guarantee product availability, the continuation of particular payment terms, or
the extension of credit limits. In the first half of 2000, we experienced supply
problems for certain components including flash memory which limited our ability
to fulfill customer orders and had the effect of decreasing our revenues for
that period. We may also experience manufacturing or supply problems in the
future. Com21 is dependent on its manufacturers to secure components at
favorable prices and in sufficient volume. If our contract manufacturers fail to
perform in any of these areas, it could harm our relationships with customers.
Failure to obtain these components and supply our customers with product could
decrease our revenues.

COM21'S FUTURE SUCCESS WILL DEPEND IN PART UPON ITS ABILITY TO ENHANCE ITS
EXISTING PRODUCTS AND TO DEVELOP AND INTRODUCE, ON A TIMELY BASIS, NEW PRODUCTS
AND FEATURES THAT MEET CHANGING CUSTOMER REQUIREMENTS AND EMERGING INDUSTRY
STANDARDS.

The market for cable modem systems and products is characterized by rapidly
changing technologies and short product life cycles. Our future success will
depend in large part upon our ability to:

- identify and respond to emerging technological trends in the market;

- develop and maintain competitive products;

- enhance our products by adding innovative features that differentiate our
products from those of competitors;

- bring products to market on a timely basis at competitive prices; and

- respond effectively to new technological changes or new product
announcements by others.

The technical innovations required for us to remain competitive are
inherently complex, require long development cycles, are dependent in some cases
on sole source suppliers and require us, in some cases, to license technology
from others. If our product development and enhancements take longer than
planned, the availability of products would be delayed. We must continue to
invest in research and development to attempt to maintain and enhance our
existing technologies and products, but we may not have the funds available to
do so. Even if we have sufficient funds, these investments may not serve the
needs of our

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customers or be compatible with changing technological requirements or
standards. Most costs must be incurred before we can determine the technological
feasibility or commercial viability. In addition, revenues from future products
or product enhancements may not be sufficient to recover the development costs
incurred by these products or enhancements.

Additionally, we may not be successful in managing the transition from our
current products to our new and enhanced products. Product transitions contain a
number of inherent risks including obsolescence of product inventory,
unavailability of product as inventory of existing product is exhausted prior to
availability of new product, market acceptance of new products, undetected
defects in new products, and availability of components and parts in new
products. If we are unable to successfully manage the risks associated with the
release and transition of new and enhanced products, our revenues would be
reduced.

COM21 MAY NOT BE SUCCESSFUL IN ATTRACTING AND RETAINING KEY PERSONNEL AND
MANAGEMENT.

Our future success depends, to a significant extent, on the ability of our
management to operate effectively, both individually and as a group. We must
retain and attract high caliber personnel. Competitors and others have in the
past and may in the future attempt to recruit Com21's employees. We do not have
employment contracts with any of our key personnel. We have experienced higher
turnover recently than in prior years and over the past five months have had to
lay off a number of employees, which may impact employee morale. We do not
maintain key person life insurance on our key personnel. The loss of the
services of any of our key management or personnel, the inability to attract or
retain qualified personnel in the future or delays in hiring required personnel,
particularly engineers, could negatively affect our business by slowing research
and development efforts and delaying product development programs.

THE DIVESTITURE AND CLOSING OF COM21'S MARYLAND AND ISRAELI OPERATING UNITS MAY
CREATE UNFORESEEN RISKS.

In April 2001, we announced the closing of the BitCom operation, also
called the Maryland Development Center, and the sale of our majority interest in
GADline, also known as the Voice Products Division in Israel, in a management
buyout. The process of closing down and selling off these operations is risky
and may create unforeseen operating difficulties and expenditures.

COM21 HAS A SHORT OPERATING HISTORY, HAS NOT YET MADE A PROFIT AND EXPECTS TO
INCUR LOSSES IN THE FUTURE.

We have not yet made a profit and we expect to continue to operate at a
loss through fiscal year 2001. To achieve and subsequently maintain profitable
operations, we must successfully design, develop, test, manufacture, introduce,
market and distribute our products on a broad commercial basis and secure higher
revenues and gross profits and contain our operating expenses. Our future
revenues will depend on a number of factors, many of which are beyond our
control. These factors include our ability to:

- reduce prices;

- manufacture products at acceptable quality standards;

- have product available when our customers need it;

- meet industry standards;

- respond to technology change; and

- have a strong competitive advantage.

Due to these factors, we cannot forecast with a degree of accuracy what our
revenues will be or how quickly cable operators will adopt our systems and buy
our cable modems. If we do not generate sufficient revenues and gross margins,
we may not achieve, or be able to sustain, profitability.

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BOTH COM21'S STANDARDS-BASED PRODUCTS ARE SUBJECT TO EVOLVING INDUSTRY
STANDARDS. IF ITS PRODUCTS DO NOT COMPLY WITH ANY STANDARD THAT ACHIEVES MARKET
ACCEPTANCE, CUSTOMERS MAY REFUSE TO PURCHASE ITS PRODUCTS.

Early cable modem technology was not interoperable, meaning cable modem
products from different cable modem developers would not work together. For
different companies' products to work together, each company must meet an
established standard. For each standard, a certification body is established to
certify that a product does meet the standard. Cable operators are demanding
certified standards-based cable modem products for two primary reasons. First, a
certified product has proven to have the functionality they want. Second,
certified interoperable products give cable operators the freedom to buy
products from a variety of cable modem manufacturers, creating increased
competition and driving down prices.

In North America, the DOCSIS standard has achieved substantial market
acceptance. Cable Television Laboratories performs certification for this DOCSIS
standard. As we continue to enhance and develop our DOCSIS products to meet the
evolving DOCSIS standards, we may incur additional costs associated with making
our cable modems compliant with various versions of the DOCSIS standard.
Additionally, we cannot assure you that enhancements or new DOCSIS products will
be CableLabs certified, or that if certified, will meet with market acceptance.
The emergence or evolution of industry standards, either through adoption by
official standards committees or widespread use by cable operators or telephone
companies could require Com21 to redesign current products. In Europe, there is
movement by some cable operators towards either a Digital Video Broadcast or DVB
standard or a European DOCSIS standard. We have developed DVB cable modems, but
we cannot assure you that these products will meet the evolving standards or
receive certification. Additionally, Com21 cannot assure you that if a European
DOCSIS standard obtains widespread acceptance, Com21 will be able to produce a
cable modem to meet these specifications. The development of new competing
technologies and standards increases the risk that current or new competitors
could develop products that would reduce the competitiveness of Com21's
products. If any of these new technologies or standards achieve widespread
market acceptance, any failure by Com21 to develop new products or enhancements,
or to address these new technologies or standards, could harm our business.

THE ADOPTION OF STANDARDS COULD RESULT IN LOWER SALES OF COM21'S PROPRIETARY
PRODUCTS.

The widespread adoption of DOCSIS, DVB, European DOCSIS or other standards
could cause aggressive competition in the cable modem market and result in lower
sales of Com21's proprietary products which do not meet these standards. As
cable operators move to standards based products, sales of Com21's proprietary
headend products, and revenues from licensing of its network management software
could decrease if its products do not meet the appropriate standards. This could
reduce its gross margin and its operating results.

COM21 RELIES ON INDIRECT DISTRIBUTION CHANNELS FOR ITS PRODUCTS AND NEEDS TO
DEVELOP ADDITIONAL DISTRIBUTION CHANNELS.

Today, cable operators and systems integrators purchase cable modems from
vendors through direct and indirect sales channels. In North America, due to the
DOCSIS standard achieving widespread market acceptance, we anticipate that the
North American cable modem market may at some point shift to a consumer purchase
model. If this occurs, we will likely sell more of our cable modems directly
through consumer sales channels. Our success will be dependent on our ability to
market effectively to end users, to establish brand awareness, to set up the
required channels of distribution and to have cable operator's reference sell
our products. We have begun to establish new distribution channels for our cable
modems. We may not have the capital required or the necessary personnel, or
expertise to develop these distribution channels, which could materially
adversely affect our business, operating results and financial condition. As
large consumer electronics companies enter the cable modem market, their
well-established retail distribution capabilities and brand would provide them
with a significant competitive advantage.

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THE MARKET IN WHICH COM21 SELLS ITS PRODUCTS IS CHARACTERIZED BY MANY COMPETING
TECHNOLOGIES, AND THE TECHNOLOGY ON WHICH ITS PRODUCT IS BASED MAY NOT COMPETE
EFFECTIVELY AGAINST OTHER TECHNOLOGIES.

There are many different methods of getting high speed Internet access to
the end customers. These methods include:

- Regular dial up connection -- using a telephone line and the average 28K
or 56K modem;

- Digital subscriber line/asymmetric digital subscriber line -- a digital
high-speed modem connection offered by telephone companies, this is also
known as DSL or ADSL;

- Cable Modems -- high speed modem connections offered by cable television
companies;

- Wireless -- high speed wireless local loop connections that work similar
to cell phones (Digital subscriber line/asymmetric digital subscriber line
and cable modems can operate in a wireless environment); and

- Fiber optics -- strands of very pure glass capable of carrying enormous
volumes of data and voice traffic.

Because of the widespread reach of telephone networks and the financial
resources of telephone companies, competition from telephone-based solutions is
expected to be intense. Cable modem technology may not be able to compete
effectively against wireline or wireless technologies. Significant market
acceptance of alternative solutions for high-speed data transmission could
decrease the demand for our products if these alternatives are viewed as
providing faster access, greater reliability, increased cost-effectiveness or
other advantages.

COM21'S FAILURE TO ADEQUATELY PROTECT ITS PROPRIETARY RIGHTS MAY ADVERSELY
AFFECT IT.

Com21 relies on a combination of patent, copyright and trademark laws and
trade secret laws, and agreements with its employees, customers and partners, to
establish and maintain its proprietary rights in its technology and products.
However, any of its intellectual proprietary rights could be challenged,
invalidated or circumvented. Our means of protecting our proprietary rights in
the U.S. or abroad may not be adequate. An unauthorized party may attempt to
copy aspects of our products or to obtain and use trade secrets or other
proprietary information. Additionally, the laws of some foreign countries do not
protect Com21's proprietary rights as fully as do the laws of the U.S. Issued
patents may not preserve Com21's proprietary position. Even if they do,
competitors or others may develop technologies similar to or superior to those
of Com21. If we do not enforce and protect our intellectual property, our
business will be harmed. Also, due to the rapid pace of technological change in
the cable modem industry, many of our products rely on key technologies
developed by third parties, and we may not be able to continue to obtain
licenses from these third parties on favorable terms, if at all. Third parties
may claim that we are infringing on their intellectual property. Even if we do
not believe that our products are infringing third parties' intellectual
property rights, these claims can be time-consuming and costly to defend and
divert management's attention and resources away from our business. Claims of
intellectual property infringement might also require us to enter into costly
royalty or license agreements. If we cannot or do not license the infringed
technology or substitute similar technology from another source, our business
could suffer.

COM21'S FAILURE TO MANAGE ITS OPERATIONS COULD SLOW ITS GROWTH RATE OR GIVE RISE
TO INEFFICIENCIES WHICH WOULD REDUCE ITS REVENUES.

To drive costs out of our business and improve our operating efficiencies,
we may be required to:

- improve existing and implement new operational, financial and management
information controls, reporting systems and procedures;

- hire, train and manage additional qualified personnel;

- expand and upgrade our core technologies; and

- effectively manage multiple relationships with our customers, suppliers
and other third parties.

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In addition, we must be able to continue to recruit and retain personnel,
and failure to do so would result in our not achieving certain of our
operational goals. Also, our management team may not be able to achieve the
rapid execution necessary to fully exploit the market for our products and
services. In the future, we may experience difficulties meeting the demand for
our products and services. We cannot assure you that our systems, procedures or
controls will be adequate to support the anticipated growth in our operations or
that we will be able to achieve the operational efficiencies needed to be
competitive. Any failure could materially cause us not to meet our operating
revenues and cost objectives and weaken our financial position.

COM21 DEPENDS ON STRATEGIC RELATIONSHIPS, AND IF IT IS NOT ABLE TO FIND AND
MAINTAIN THESE RELATIONSHIPS, IT MAY NOT BE ABLE TO DEVELOP ITS TECHNOLOGIES OR
PRODUCTS WHICH COULD SLOW ITS GROWTH AND DECREASE ITS REVENUES.

Our business strategy relies to a significant extent on strategic
relationships with other companies. These relationships include:

- software license arrangements for our network management system;

- technology licensing agreements;

- development arrangements and agreements with original equipment
manufacturers for advanced products;

- marketing arrangements with system integrators, and others; and

- collaboration agreements with suppliers of routers and headend equipment
to ensure the interoperability of our cable modems with these suppliers'
products. The failure to maintain, develop or replace them if any of
these relationships are terminated and to renew or extend any license
agreements with a third party may harm our business.

COM21'S CUSTOMER BASE IS CONCENTRATED AND THE LOSS OF ONE OR MORE OF ITS
CUSTOMERS COULD CAUSE ITS BUSINESS TO SUFFER.

A relatively small number of customers have accounted for a large part of
our revenues, and we expect that this trend will continue. In the first quarter
of 2001, our top five customers accounted for 52% of total revenues. We expect
that our largest customers in the future could be different from our largest
customers today due to a variety of factors, including customers' deployment
schedules and budget considerations. In addition, certain of our systems
integrators could develop and manufacture products that compete with us and
therefore could no longer distribute our products. Because a limited number of
companies account for a majority of our prospective customers, our future
success will depend upon our ability to establish and maintain relationships
with these companies. We may not be able to retain our current accounts or to
obtain additional accounts. Both in the U.S. and internationally, a substantial
majority of households passed are controlled by a relatively small number of
companies. The loss of one or more of our customers or our inability to
successfully develop relationships with other significant cable operators could
cause our business to suffer.

COM21 IS SUBJECT TO RISKS ASSOCIATED WITH OPERATING IN INTERNATIONAL MARKETS.

We expect that a significant portion of our sales will continue to be in
international markets. For the first quarter of 2001, international sales
accounted for 82% of total revenues. We intend to enter new international
markets that will demand management attention and financial commitment. Because
we sell primarily through systems integrators outside of the U.S., a successful
expansion of our international operations and sales in certain markets may
require us to develop relationships with new international systems integrators
and distributors. We may not be able to identify, attract or retain suitable
international systems integrators or distributors. We may not be able to
successfully expand our international operations. To increase revenues in
international markets, we will need to continue to establish foreign operations,
to hire additional personnel to run these operations and to maintain good
relations with our foreign systems

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integrators and distributors. If we are unable to successfully do so, our growth
in international sales will be limited which would reduce our operating results.
Our international sales have been denominated in U.S. dollars. We do not
currently engage in any foreign currency hedging transactions. A decrease in the
value of foreign currencies relative to the U.S. dollar could make our products
more expensive in international markets. Future international activity may
result in sales denominated in foreign currencies. Gains and losses on the
conversion to U.S. dollars of accounts receivable, accounts payable and other
monetary assets and liabilities arising from international operations may
contribute to fluctuations in Com21's operating results. In addition to currency
fluctuation risks, international operations involve a number of risks not
typically present in domestic operations, including: changes in regulatory
requirements; costs and risks of deploying systems in foreign countries;
licenses, tariffs and other trade barriers; political and economic instability;
difficulties in staffing and managing foreign operations; potentially adverse
tax consequences; difficulties in obtaining governmental approvals for products;
the burden of complying with a wide variety of complex foreign laws and
treaties; and the possibility of difficult accounts receivable collections.

We are also subject to the risks associated with the imposition of
legislation and regulations relating to the import or export of high technology
products. We cannot predict whether charges or restrictions upon the importation
or exportation of our products will be implemented by the U.S. or other
countries.

THE INDUSTRY IN WHICH COM21 COMPETES IS SUBJECT TO CONSOLIDATION.

There has been a trend toward industry consolidation for several years,
which is expected to continue through 2001. We expect this trend toward industry
consolidation to continue as companies attempt to strengthen or hold their
market positions in an evolving industry. We believe that industry consolidation
may provide increasingly stronger competitors that are better able to compete.
This could lead to more variability in operating results as we compete to be a
vendor solution and could negatively impact our business, operating results and
financial condition. We believe that industry consolidation may lead to fewer
possible customers. If we are unable to maintain our current customers or secure
additional customers, our business could decrease.

THE LOCATION OF COM21'S FACILITIES SUBJECTS IT TO THE RISK OF EARTHQUAKES AND
OTHER NATURAL DISASTERS.

Com21's corporate headquarters, including some of its research and
development operations and its in-house manufacturing facilities, are located in
the Silicon Valley area of northern California, a region known for seismic
activity. A significant natural disaster in the Silicon Valley, such as an
earthquake or power loss, could halt our business, weaken our financial
condition and create disappointing operating results.

RISKS RELATED TO THIS OFFERING

THE COMMON STOCK SOLD IN THIS OFFERING WILL INCREASE THE SUPPLY OF OUR COMMON
STOCK ON THE PUBLIC MARKET, WHICH MAY CAUSE OUR STOCK PRICE TO DECLINE.

The sale into the public market of the common stock to be sold in this
offering could materially adversely affect the market price for our common
stock. In addition, Com21 issued 324,302 shares of its common stock to several
stockholders upon the achievement of certain contractual milestones established
in connection with a private transaction in which Com21 acquired all of the
ordinary shares of GADline, Ltd. Most of the shares of our common stock are
eligible for immediate and unrestricted sale in the public market at any time.
Once the registration statement of which this prospectus forms a part and the
registration statement with respect to the shares of common stock issued to
stockholders of GADline are declared effective, all shares of common stock to be
sold in this offering and all of the shares of common stock issued to
stockholders of GADline will be eligible for immediate and unrestricted resale
into the public market. The presence of all of these additional shares of common
stock in the public market may further depress our stock price.

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FORWARD-LOOKING STATEMENTS

Com21 has made forward-looking statements in this document and the
documents incorporated by reference herein that are subject to risks and
uncertainties. These statements are based on management's beliefs and
assumptions, based on information currently available to management.
Forward-looking statements include, but are not limited to, information
concerning possible future results of operations of Com21 set forth under the
section entitled "Risk Factors." Statements in this document and the documents
incorporated herein by reference preceded by, followed by or that include the
words "believes," "expects," "anticipates," "intends," "plans," "estimates,"
"should" or similar expressions identify forward-looking statements.

Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. The future results and stockholder values
of Com21 may differ materially from those expressed in these forward-looking
statements. Many of the factors that will determine these results and values are
beyond Com21's ability to control or predict. Stockholders are cautioned not to
put undue reliance on any forward-looking statements. In addition, Com21 does
not have any intention or obligation to update forward-looking statements after
the date of this prospectus even if new information, future events or other
circumstances have made them incorrect or misleading. For those statements,
Com21 claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.

In evaluating our common stock, you should carefully consider the
discussion of risks and uncertainties in the section entitled "Risk Factors" in
this prospectus and in the documents incorporated by reference herein.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's Public Reference Room 15 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. Our SEC filings are also available to the public
from our web site at http://www.Com21.com or at the SEC's web site at
http://www.sec.gov.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.

(a) Com21's Quarterly Report on Form 10-Q for the three month period
ended March 31, 2001 filed May 15, 2001;

(b) Com21's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000 filed April 2, 2001 including certain information in
Com21's Definitive Proxy Statement in connection with Com21's 2001 Annual
Meeting of Stockholders filed April 10, 2001;

(d) The description of Com21's common stock contained in its
registration statement on Form 8-A filed April 8, 1998, including any
amendments or reports filed for the purpose of updating such descriptions.

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You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:

David Robertson
Chief Financial Officer
Com21, Inc.
750 Tasman Drive
Milpitas, CA 95053
(408) 953-9100

You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of the document.

SELLING STOCKHOLDER

The following table sets forth the name of the selling stockholder and the
number of shares being registered for sale as of the date of this prospectus and
sets forth the number of shares of common stock known by us to be beneficially
owned by the selling stockholder. The following table assumes that the selling
stockholder will sell all of the shares being offered for its account by this
prospectus. However, we are unable to determine the exact number of shares that
actually will be sold. The shares offered by this prospectus may be offered from
time to time by the selling stockholder. This registration statement also shall
cover any additional shares of common stock that become issuable in connection
with the shares registered hereby by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration that results in an increase in the number of Com21's outstanding
shares of common stock. This information is based upon information provided by
the selling stockholder, and is not necessarily indicative of beneficial
ownership for any other purpose. The term "selling stockholder" includes the
stockholder listed below and its transferees, assignees, pledgees, donees or
other successors. The percent of beneficial ownership is based on 24,947,696
shares of common stock outstanding as of February 28, 2001.

PERCENT OF
NUMBER OF OUTSTANDING NUMBER OF
SHARES OF SHARES SHARES OF COMMON
COMMON STOCK BENEFICIALLY STOCK REGISTERED
NAME OF SELLING STOCKHOLDER BENEFICIALLY OWNED OWNED FOR SALE HEREBY
--------------------------- ------------------ ------------ ----------------

Fletcher International, Ltd.(2) ................ 2,450,000 9.8% 4,900,000(1)

- -------------------------
(1) Includes 2,450,000 shares of common stock not currently exercisable under a
warrant.

(2)The securities listed above include outstanding securities held in one or
more accounts managed by Fletcher Asset Management, Inc. for the selling
stockholder. Fletcher Asset Management, Inc. is an investment adviser to the
selling stockholder and is registered under Section 203 of the Investment
Advisors Act of 1940, as amended. Pursuant to an investment advisory
agreement between Fletcher Asset Management, Inc. and the selling
stockholder, Fletcher Asset Management, Inc. has the authority to vote and
dispose of the securities in these accounts. By reason of the provision of
Rule 13d-3 under the Securities Exchange Act of 1934, the selling stockholder
and Fletcher Asset Management Inc. may each be deemed to own beneficially the
securities registered under the Registration Statement of which this
prospectus is a part. In addition, by virtue of Alphonse Fletcher, Jr.'s
position as Chairman and Chief Executive Officer of Fletcher Asset
Management, Inc., Mr. Fletcher may be deemed to have the shared power to vote
or direct the vote of, and the shared power to dispose or direct the
disposition of, these securities. Therefore, Mr. Fletcher may also be deemed
to be the beneficial owner of these securities.

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The 2,450,000 shares of common stock and the warrant to potentially
purchase up to an additional 2,450,000 shares of common stock, subject to
adjustments pursuant to the terms of the warrant, were issued on March 6, 2001
pursuant to a subscription agreement. The warrant will expire on March 7, 2008
and has an exercise price of $9.0951 per share, subject to adjustment pursuant
to the terms of the warrant.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the common stock
by the selling stockholder. All proceeds will be received by the selling
stockholder. We will receive the proceeds from the exercise of the outstanding
warrant by the selling stockholder and those proceeds will be used for general
corporate purposes. See "Selling Stockholder."

PLAN OF DISTRIBUTION

We are registering all 4,900,000 shares on behalf of the selling
stockholder. This amount includes 2,450,000 shares of common stock acquired by
the selling stockholder on March 6, 2001 pursuant to a subscription agreement
and an additional 2,450,000 shares of common stock potentially issuable upon
exercise of a currently outstanding warrant to purchase common stock held by the
selling stockholder. We will not receive any of the proceeds from sales by the
selling stockholder of the offered shares of common stock. We will receive
proceeds from the exercise of the outstanding warrant by the selling stockholder
and those proceeds will be used for our general corporate purposes. The selling
stockholder named in the table above or pledgees, donees, transferees or other
successors-in-interest selling shares received from the selling stockholder as a
gift, distribution or other non-sale related transfer after the date of this
prospectus may sell the shares from time to time. The selling stockholder will
act independently of us in making decisions with respect to the timing, manner
and size of each sale. The sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The selling stockholder may effect these transactions by selling
the shares to or through broker-dealers.

The shares may be sold by one or more of, or a combination of, the
following:

- a block trade in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

- purchases by a broker-dealer as principal and resale by this
broker-dealer for its account through this prospectus;

- an exchange distribution that complies with the rules of the exchange;

- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and

- in privately negotiated transactions.

To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.

The selling stockholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with the selling stockholder.
The selling stockholder also may sell shares short and redeliver the shares to
close out these short positions. The selling stockholder may enter into option
or other transactions with broker-dealers that require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer these shares through this prospectus. The selling stockholder may also
loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the pledged
shares by use of this prospectus. Some or all of the shares offered hereunder
also may be sold to or through an underwriter or underwriters. Any shares sold
in that manner will be acquired by the
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underwriters for their own accounts and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such shares
may be offered to the public through underwriting syndicates represented by one
or more managing underwriters or may be offered to the public directly by one or
more underwriters. Any public offering price and any discounts or concessions
allowed or disallowed or paid to dealers may be changed from time to time.

Underwriters, broker-dealers or agents may receive compensation in the form
of commissions, discounts or concessions from the selling stockholder.
Underwriters, broker-dealers or agents may also receive compensation from the
purchasers of the shares for whom they act as agents or to whom they sell as
principals, or both. Compensation as to a particular underwriter or
broker-dealer might be in excess of customary commissions and will be in amounts
to be negotiated in connection with the sale. Underwriters, broker-dealers or
agents and any other participating broker-dealers or the selling stockholders
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act in connection with sales of the shares. Accordingly, any
commission, discount or concession received by them and any profit on the resale
of the shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act. Because selling stockholders may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act,
the selling stockholders may be subject to the prospectus delivery requirements
of the Securities Act. Neither the delivery of any prospectus, or any prospectus
supplement, nor any other action taken by Com21 the selling stockholder or any
purchaser in connection with the purchase or sale of shares hereby shall be
deemed or treated as an admission that any of them is an underwriter within the
meaning of the Securities Act in connection with the sale of any shares. In
addition, any securities covered by this prospectus that qualify for sale
through Rule 144 promulgated under the Securities Act may be sold under Rule 144
rather than through this prospectus.

The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Securities Exchange Act,
any person engaged in the distribution of the shares may not engage in
market-making activities with respect to our common stock during certain
restricted periods. In addition, the selling stockholder will be subject to
applicable provisions of the Securities Exchange Act and the associated rules
and regulations under the Securities Exchange Act, including Regulation M, that
may limit the timing of purchases and sales of shares of our common stock by the
selling stockholder. We will make copies of this prospectus available to the
selling stockholder and such selling stockholder has been informed of the need
for delivery of copies of this prospectus to purchasers at or prior to the time
of any sale of the shares.

We will file a supplement to this prospectus, if required, pursuant to Rule
424(b) under the Securities Act upon being notified by a selling stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer. Such supplement will
disclose:

- the name of each such selling stockholder and of the participating
broker-dealer(s),

- the number of shares involved,

- the price at which such shares were sold,

- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,

- that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this prospectus,
and

- other facts material to the transaction.

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We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholder will bear all commissions
and discounts, if any, attributable to their respective sales of the shares. The
selling stockholder may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against some
liabilities, including liabilities arising under the Securities Act.

LEGAL MATTERS

The validity of the common stock offered in this prospectus and certain
other legal matters will be passed upon for us by Brobeck, Phleger & Harrison
LLP, Palo Alto, California. As of the date of this prospectus, attorneys of
Brobeck, Phleger & Harrison LLP and family members thereof beneficially owned an
aggregate of approximately 1,015 shares of our common stock.

EXPERTS

The consolidated financial statements of Com21 and the related consolidated
financial statement schedule incorporated in this prospectus by reference from
Com21's annual report on Form 10-K for the year ended December 31, 2000 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

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WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM
WHAT IS IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS
FROM WHAT IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS
NOT AN OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE SECURITIES IN ANY
STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS
PROSPECTUS IS COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION MAY
CHANGE AFTER THAT DATE.

TABLE OF CONTENTS

PAGE
----

The Company.......................... 1
Risk Factors......................... 1
Forward-Looking Statements........... 11
Where You Can Find More
Information........................ 11
Selling Stockholder.................. 12
Use of Proceeds...................... 13
Plan of Distribution................. 13
Legal Matters........................ 15
Experts.............................. 15

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COM21, INC.

4,900,000 Shares
of Common Stock
-------------------------

PROSPECTUS

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

May 23, 2001

- ------------------------------------------------------
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19

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by Com21 in connection with the
sale of common stock being registered. All amounts are estimates except the SEC
registration fee.

SEC Registration Fee........................................ $ 1,551
Legal Fees and Expenses..................................... 10,000
Accounting Fees and Expenses................................ 5,250
Printing Fees............................................... 3,000
Transfer Agent Fees......................................... 3,000
Miscellaneous............................................... 2,750
-------
Total..................................................... $25,551
=======

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant's certificate of incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except for liability
for (i) any breach of their duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law, or (iv) any transaction from which
the director derives an improper personal benefit.

The Registrant's bylaws provide that the Registrant shall indemnify its
directors and may indemnify its officers, employees and other agents to the
fullest extent permitted by law. The Registrant believes that indemnification
under its bylaws covers at least negligence and gross negligence on the part of
an indemnified party in connection with the defense of any action or proceeding
arising out of such party's status or service as a director, officer, employee
or other agent of the Registrant upon an undertaking by such party to repay such
advances if it is ultimately determined that such party is not entitled to
indemnification. The Registrant has entered into indemnification agreements with
its officers and directors. The indemnification agreements provide the
Registrant's officers and directors with further indemnification to the maximum
extent permitted by the Delaware General Corporation Law.

ITEM 16. EXHIBITS

4.2(1) Amended and Restated Information and Registration Rights
Agreement, among the Registrant and the investors and
founders named therein, dated July 22, 1997
5.1* Opinion of Brobeck, Phleger & Harrison LLP
10.15(2) Agreement, dated February 28, 2001, by and between the
Registrant and Fletcher International, Ltd.
10.16(2) Warrant Certificate, dated March 6, 2001, by and between the
Registrant and Fletcher International, Ltd.
23.1 Independent Auditors' Consent
23.2* Consent of Brobeck, Phleger & Harrison LLP (included in its
opinion filed as Exhibit 5.1)
24.1 Power of Attorney. Reference is made to Page II-3 of the
Registration Statement on Form S-3 filed on April 5, 2001.

II-1
20

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* To be filed by subsequent amendment.

(1) Previously filed as an exhibit to the Registrant's registration statement on
Form S-1 (File No. 333-48107).

(2) Previously filed as an exhibit to the Registrant's current report on Form
8-K (File No. 000-24009).

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement, or the most recent
post-effective amendment thereof, which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and therefore is unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act, that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

II-2
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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment
No. 1 to registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Milpitas, State of California, on this
23rd day of May, 2001.

COM21, INC.

By: /s/ DAVID L. ROBERTSON
------------------------------------
David L. Robertson
Vice President, Finance and
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons on
behalf of Com21 and in the capacities and on the dates indicated:

SIGNATURE TITLE DATE
--------- ----- ----

* President, Chief Executive May 23, 2001
- ----------------------------------------------------- Officer and Director (Principal
Craig Soderquist Executive Officer)

* Vice President, Finance and Chief May 23, 2001
- ----------------------------------------------------- Financial Officer (Principal
David L. Robertson Financial and Accounting Officer)

* Director May 23, 2001
- -----------------------------------------------------
Paul Baran

* Director May 23, 2001
- -----------------------------------------------------
C. Richard Kramlich

* Director May 23, 2001
- -----------------------------------------------------
Robert C. Hawk

Director
- -----------------------------------------------------
Jerald L. Kent

* Director May 23, 2001
- -----------------------------------------------------
Robb Wilmot

Director
- -----------------------------------------------------
James Spilker, Jr.

* Director May 23, 2001
- -----------------------------------------------------
Daniel J. Pike

* /s/ DAVID L. ROBERTSON
- --------------------------------------

David L. Robertson
Attorney-in-Fact

II-3
22

INDEX TO EXHIBITS

EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------

4.2(1) Amended and Restated Information and Registration Rights
Agreement, among the Registrant and the investors and
founders named therein, dated July 22, 1997
5.1* Opinion of Brobeck, Phleger & Harrison LLP
10.15(2) Agreement, dated February 28, 2001, by and between the
Registrant and Fletcher International, Ltd.
10.16(2) Warrant Certificate, dated March 6, 2001, by and between the
Registrant and Fletcher International, Ltd.
23.1 Independent Auditors' Consent
23.2* Consent of Brobeck, Phleger & Harrison LLP (included in its
opinion filed as Exhibit 5.1)
24.1 Power of Attorney. Reference is made to Page II-3 if the
Registration Statement on Form S-3 filed on April 5, 2001.

- -------------------------
* To be filed by subsequent amendment.

(1) Previously filed as an exhibit to the Registrant's registration statement on
Form S-1 (File No. 333-48107).

(2) Previously filed as an exhibit to the Registrant's current report on Form
8-K (File No. 000-24009).