UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
(Mark one)

[X]   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998

                                       or

[ ]  TRANSACTION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from _____ to _____.

                         Commission file number 1-11624



                         HYPERMEDIA COMMUNICATIONS, INC.
                         -------------------------------
             (Exact name of registrant as specified in its charter)

         California                                           94-3104247
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)


                     901 Mariner's Island Blvd., Suite 365,
                           San Mateo, California 94404
              (Address of principal executive offices and Zip code)

                                 (650) 573-5170
              (Registrant's telephone number, including area code)

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

As of November 4, 1998,  3,200,141 shares of the registrant's  common stock were
issued and outstanding.

                                       1

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                         HYPERMEDIA COMMUNICATIONS, INC.
                                  BALANCE SHEET
                                   (UNAUDITED)

                                                 September 30,     December 31,
                                                      1998             1997
                                                  ------------    --------------
ASSETS
Current assets:
      Cash and cash equivalents                   $    212,000    $    269,000
      Accounts receivable, net of allowance
           for doubtful accounts of
           $161,000 and $110,000                       861,000       1,165,000
      Prepaid expenses and other assets              1,002,000         567,000
                                                  ------------    ------------
              Total current assets                   2,075,000       2,001,000

Property and equipment, net                            413,000         451,000
                                                  ------------    ------------
                                                  $  2,488,000    $  2,452,000
                                                  ============    ============

LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
      Accounts payable                            $    629,000    $    956,000
      Accrued liabilities                              274,000         439,000
      Deferred revenue                                 296,000          31,000
                                                  ------------    ------------
              Total current liabilities              1,199,000       1,426,000
                                                  ------------    ------------

Shareholders' equity:
      Convertible Preferred Stock, $.001 par
          value; 10,064,516 shares authorized;
          8,512,191 and 8,342,910 shares             3,924,000       2,003,000
          issued and outstanding
      Common Stock, $.001 par value; 50,000,000
        shares authorized; 3,200,141                10,427,000      10,427,000
        issued and outstanding
      Accumulated deficit                          (13,062,000)    (11,404,000)
                                                  ------------    ------------
              Total shareholders' equity             1,289,000       1,026,000
                                                  ------------    ------------
                                                  $  2,488,000    $  2,452,000
                                                  ============    ============

      See the accompanying notes to these condensed financial statements.

                                        2


<PAGE>


<TABLE>
                                  HYPERMEDIA COMMUNICATIONS, INC.
                                      STATEMENT OF OPERATIONS
                                            (UNAUDITED)

<CAPTION>
                                             Three months ended              Nine months ended
                                                 September 30,                  September 30,
                                           --------------------------    --------------------------
                                               1998           1997           1998           1997
                                           -----------    -----------    -----------    -----------

<S>                                        <C>            <C>            <C>            <C>        
Revenues                                   $ 1,028,000    $ 1,721,000    $ 4,099,000    $ 5,437,000
                                           -----------    -----------    -----------    -----------

Expenses:
    Editorial                                  201,000        294,000        723,000        869,000
    Production                                 378,000        481,000      1,262,000      1,428,000
    Circulation                                432,000        501,000      1,427,000      1,597,000
    Sales and marketing                        544,000        434,000      1,622,000      1,238,000
    Product development                         12,000         10,000         35,000         29,000
    General and administrative                 208,000        246,000        711,000        699,000
                                           -----------    -----------    -----------    -----------
            Total expenses                   1,775,000      1,966,000      5,780,000      5,860,000
                                           -----------    -----------    -----------    -----------

Loss from operations                          (747,000)      (245,000)    (1,681,000)      (423,000)

Interest and other (income) expense, net       (13,000)         4,000        (22,000)        21,000
                                           -----------    -----------    -----------    -----------
Net loss                                   $  (734,000)   $  (249,000)   $(1,659,000)   $  (444,000)
                                           ===========    ===========    ===========    ===========

Basic and diluted net loss per shar$             (0.23)   $     (0.08)   $     (0.52)   $     (0.14)
                                           ===========    ===========    ===========    ===========


Weighted average common and
    common equivalent shares                 3,200,141      3,200,137      3,200,141      3,200,137
                                           ===========    ===========    ===========    ===========
<FN>
                See the accompanying condensed notes to these financial statements.
</FN>
</TABLE>
                                                 3

<PAGE>



                         HYPERMEDIA COMMUNICATIONS, INC.
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                                           Nine months ended
                                                              September 30,
                                                     ---------------------------
                                                         1998          1997
                                                     -----------    -----------

Cash flow from operating activities:
     Net loss                                        $(1,659,000)   $  (444,000)
     Adjustments to reconcile net loss to net
        cash used in operating activities:
        Depreciation and amortization                    167,000        175,000
        Allowance for doubtful accounts                   51,000        (64,000)
        Other                                               --           20,000
        Change in assets and liabilities:
           Accounts receivable                           253,000         31,000
           Prepaid expenses and other assets            (434,000)       (70,000)
           Accounts payable                             (327,000)      (164,000)
           Accrued liabilities                          (165,000)        90,000
           Deferred revenue                              265,000        329,000
                                                     -----------    -----------
Net cash used in operating activities                 (1,849,000)       (97,000)
                                                     -----------    -----------

Net cash used in investing activities for
     purchase of fixed assets                           (129,000)       (28,000)
                                                     -----------    -----------
Cash flows from financing activities:
     Proceeds from issuance of Preferred Stock         1,921,000        348,000
     Proceeds from issuance of Common Stock                 --           50,000
     Repayment of note payable                              --         (285,000)
                                                     -----------    -----------
Net cash provided by financing activities              1,921,000        113,000
                                                     -----------    -----------

Net increase in cash                                     (57,000)       (12,000)

Cash and cash equivalents at beginning of period         269,000        107,000
                                                     -----------    -----------

Cash and cash equivalents at end of period           $   212,000    $    95,000
                                                     ===========    ===========

Supplemental disclosure of cash flow information:
     Cash paid during the period for interest        $     2,000    $    21,000
                                                     ===========    ===========

      See the accompanying condensed notes to these financial statements.

                                       4

<PAGE>

                         HYPERMEDIA COMMUNICATIONS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

The financial statements of HyperMedia  Communications,  Inc. (the "Company") as
of September  30, 1998 and 1997 and for the three and nine months then ended are
unaudited, and in the opinion of management, all adjustments (consisting of only
normal  recurring  items)  necessary for the fair  presentation of the financial
position and results of operations  for the interim  periods have been included.
These  financial  statements  should be read in  conjunction  with the Financial
Statements  for the year ended  December 31, 1997 and notes thereto  included in
the  Company's  Annual Report on Form 10-K.  The results of  operations  for the
three and nine months ended September 30, 1998 are not necessarily indicative of
the results expected for the entire year.

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


NOTE 2 - BASIC AND DILUTED NET LOSS PER SHARE

Basic and diluted net loss per share is based upon the weighted  average  number
of  outstanding  shares of Common  Stock.  Common stock  equivalent  shares from
Convertible  Preferred Stock (using the  if-converted  method) and stock options
and warrants  (using the treasury  stock  method)  have been  excluded  from the
computation  for the three month periods  ended  September 30, 1998 and 1997 and
for the nine month periods ended  September 30, 1998 and 1997 as their effect is
anti-dilutive.

NOTE 3 - STATEMENT OF SHAREHOLDER'S EQUITY

In the first  quarter of 1998,  the Board of Directors  approved the issuance of
the Series J Preferred Stock. The Series J Preferred Stock ranks pari passu with
the Series F, G, H and I  Preferred  Stock.  111,750  Series J  Preferred  Stock
shares were issued during the quarter ended March 31, 1998. An additional 57,531
Series J Preferred  Stock shares were issued  during the quarter  ended June 30,
1998.

                                       5


<PAGE>


Item 2. -  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations

This  section  and other  parts of this  Quarterly  Report on Form 10-Q  contain
forward-looking  statements  within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the  Securities  Exchange Act, that involve risks
and uncertainties,  including but not limited to those statements that have been
identified  by an asterisk  (*) and other  statements  regarding  the  Company's
strategy,  financial  performance,  and revenue  sources.  The Company's  actual
results may differ significantly from those anticipated in these forward-looking
statements as a result of the factors set forth below and in "Factors  Affecting
Operating Results and Market Price of Stock." Readers are cautioned not to place
undue reliance on these forward-looking  statements,  which speak only as of the
date hereof.

General

HyperMedia  Communications,  Inc.  (the  "Company"  or  "HyperMedia")  publishes
NewMedia Magazine  ("NewMedia"),  the largest  publication serving the corporate
digital  content  market.   "Digital  content"  is  information   created  using
computer-based  video,  audio,  graphics,  animation and Internet  technologies.
Companies use digital  content in building brand  awareness  through  marketing,
advertising,   promotions,  corporate  presentations  and  sales  and  technical
training.  Corporate  digital  content  creators  use a wide  array  of  digital
communications technologies,  including Internet development tools and services,
desktop and portable  personal  computers,  workstations,  servers,  audio/video
compression and editing equipment, graphics hardware and software,  high-density
storage devices and video conferencing systems. Digital media output is actively
employed in a broad range of businesses and disciplines,  such as brand identity
(including  presentations,  training and collateral),  advertising,  publishing,
brand  merchandising,   e-commerce,   film,  music,  radio,  television,   cable
television, video production, theme parks and computer media.

The 1998  publishing  strategy,  which was  implemented  in the second  quarter,
returned NewMedia to a monthly publishing  frequency.  This publishing  schedule
was   implemented  in  response  to  the  expressed   preference  of  NewMedia's
advertising  clients for a standard monthly  publishing  frequency as opposed to
the  previous 16 times per year  schedule.  The Company  intends to continue the
guaranteed  average  circulation base of 215,000 in 1998.* According to a recent
analysis  conducted  for the  Company by BPA  International  ("BPA") of NewMedia
subscriber  demographic  data,  the average  subscriber to the  publication  has
represented  that they are personally  involved in the purchase of approximately
$1,080,000 worth of digital content-related hardware, software and services in a
twelve-month  period.* This represents a more than 100 percent increase from the
approximate  $516,000 average purchasing power for NewMedia subscribers in 1996.
In  addition,  a redesign of  NewMedia  debuted  with the July 1998  issue.  The
redesign was a  culmination  of a  repositioning  strategy that was initiated in
1996.  The  goal  is to  target  the  most  senior  managers  and  professionals
responsible for driving  digital-content  strategies within business today - the
Digital Elite.*

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       6


<PAGE>

HyperMedia  also produces the NewMedia  INVISION  Awards  Festival,  the largest
juried digital media competition in the world. The program seeks out the highest
achievements in digital content creation for business, entertainment, marketing,
government and education.  The 1998 NewMedia INVISION Festival, which took place
November 11-13, 1998, included a 6,000 square foot PLAYLAND Gallery, Evening New
Media Showcases and a two-day Digital Insight conference.*

HyperMedia also publishes newmedia.com,  an award-winning World Wide Web site of
news,  information,  products  and  services  for the digital  content  creation
market. The Company recently introduced i.Serv, an innovative  electronic reader
service  capability  that uses the  immediacy  and  interactivity  of the Web to
respond to readers' product information requests in minutes instead of months.*

Results of Operations

The Company's  gross  revenues were  $1,028,000  and $1,721,000 for the quarters
ended September 30, 1998 and 1997,  respectively,  and $4,099,000 and $5,437,000
for the nine months then ended.  The  decrease in revenues is primarily a result
of decreases in  advertising  sales in NewMedia.  The Company  believes that the
decrease  in  advertising  revenue  is  related  to a number of market  factors,
including the migration of digital content  development  from CD-ROM based media
to the Internet and shifts in the  Macintosh  hardware and software  market,  as
digital content creators make a transition toward increased use of Windows based
workstations.  The reduction in the publication  frequency of NewMedia  magazine
from  sixteen  issues per year to one issue per  month,  which  occurred  in the
second quarter of 1998, also contributed to the decrease in revenues.

The Company's  total  expenses were  $1,775,000  and $1,966,000 for the quarters
ended September 30, 1998 and 1997,  respectively,  and $5,780,000 and $5,860,000
for the nine months then ended.  The reduction in expenses  associated  with the
lower  number of issues  published  in 1998 was  partially  offset by  increased
investment in sales and marketing.

The net loss for the first nine months of 1998 was $1,659,000 as compared to the
loss of  $444,000  for the first nine months of 1997.  The Company  posted a net
loss of  $734,000  in the third  quarter  of 1998 as  compared  to a net loss of
$249,000  for the same  period of 1997.  The  increase  in net loss in the third
quarter of 1998 as  compared  to 1997 is  primarily  a result of an  increase in
sales  and  marketing  expenses  and to the  decrease  in  NewMedia  advertising
revenues.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       7


<PAGE>

Editorial  expenses,  comprised  principally  of  salaries  and fees paid to the
writers for the  Company's  publications,  were  $201,000  and  $294,000 for the
quarters  ended  September  30, 1998 and 1997,  respectively,  and  $723,000 and
$869,000 for the nine months then ended.  The  reductions in editorial  expenses
are primarily  attributable  to cost control  programs,  some  attrition,  and a
reduction  in the number of issues per  quarter  (from 4 to 3),  starting in the
second fiscal quarter of 1998.  Editorial  expenses  represented  20% and 17% of
revenue for the quarters ended  September 30, 1998 and 1997,  respectively.  The
Company  expects that  editorial  expenses will decrease for the balance of 1998
versus 1997 as a result of the lower number of issues  associated  with the 1998
publishing strategy.*

Production expenses,  including costs for design,  materials and printing of the
Company's  publications,  were  $378,000 and  $481,000  for the  quarters  ended
September 30, 1998 and 1997,  respectively and $1,262,000 and $1,428,000 for the
nine months then ended. The decrease in production expenses for the third fiscal
quarter and first nine  months of 1998 as compared to the same  quarter and nine
months of 1997 is  primarily  attributable  to the  reduction  of the  number of
issues per quarter (from 4 to 3), starting in the second fiscal quarter of 1998.
Production  expenses  represented  37% of revenue  in the third  quarter of 1998
compared to 28% for the same period in 1997. Production expenses are expected to
remain  relatively flat during the balance of 1998, as the result of a projected
increase in  advertising  pages,  if any, and higher paper costs,  which will be
offset by the lower number of issues to be published in 1998.*

Circulation expenses, consisting primarily of costs associated with subscription
fulfillment,   mailing  and  the  direct  mail   promotions   of  the  Company's
publications,  were $432,000 and $501,000 for the quarters  ended  September 30,
1998 and 1997,  respectively,  and $1,427,000 and $1,597,000 for the nine months
then ended.  The  Company  currently  capitalizes  its  circulation  development
expenditures and amortizes them over a 12 month period. The decrease of $69,000,
or 14% during the  quarter  ended  September  30, 1998 versus the same period in
1997, is primarily attributable to the smaller amount of circulation development
expenditure  amortization  included in the third  quarter of 1998 as compared to
the same period in 1997.  As part of the Company's  publishing  strategy in 1996
and 1997,  the minimum  readership  qualifications  to receive the magazine were
significantly more stringent.  As a result of these new criteria,  the power the
average subscriber represents he has to purchase new media products and services
increased to  approximately  $1,100,000 at the end of 1997,  from  approximately
$500,000 at the end of 1996 and less than $200,000 in 1995. The Company  intends
to maintain the higher minimum readership qualifications to receive the magazine
in 1998.* Circulation expenses represented 42% of revenues for the third quarter
of 1998 as compared to 29% of revenues for the same period of 1997.  Circulation
expenses are expected to decrease in the balance of 1998 versus 1997 as a result
of the reduction in the number of issues published each quarter.*

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
sections  entitled  "Factors  Affecting  Operating  Results and Market  Price of
Stock" for a discussion of factors that could affect future performance.

                                       8

<PAGE>


Sales and marketing  expenses were $544,000 and $434,000 for the quarters  ended
September 30, 1998 and 1997, respectively, and $1,622,000 and $1,238,000 for the
nine months then ended.  The increase is attributable to higher  expenditures on
sales  and  marketing  programs  and  increased  sales  compensation   expenses,
including  those related to the hiring of new sales  personnel in the first half
of 1998.  The NewMedia  magazine  sales force has almost  doubled from the first
half of 1997 to the first half of 1998. Sales and marketing expenses represented
40% of revenues for the first nine months of 1998 as compared to 23% of revenues
for the same period of 1997.  Sales and marketing  expenses  represented  53% of
revenue for the third quarter of 1998 as compared to 25% of revenue for the same
period of 1997. Sales and marketing expenses are expected to increase during the
balance of 1998 because of higher sales  compensation  expenses due to increased
personnel, and higher expenditures associated with the expansion of the NewMedia
INVISION Awards Festival, which included a conference program.*

Product  development  expenses  were $12,000 and $10,000 for the quarters  ended
September 30, 1998 and 1997, respectively,  and $35,000 and $29,000 for the nine
months then ended,  and consisted of costs  incurred in the  development  of new
products, including the Internet World Wide Web site, newmedia.com.  The Company
plans to continue its product development efforts during 1998.*

General and administrative  expenses were $208,000 and $246,000 for the quarters
ended September 30, 1998 and 1997,  respectively,  and $711,000 and $699,000 for
the nine months then ended.  The  increase of $12,000,  or 2%, in the first nine
months of 1998 as  compared to 1997 was due  primarily  to  increased  headcount
expenses.  The  decrease  of $38,000,  or 15%,  in the third  quarter of 1998 as
compared to the same period in 1997  primarily  reflects a reduction  in outside
services   expense,   including   legal  and  consulting   costs.   General  and
administrative expenses represented 20% of revenue for the third quarter of 1998
as compared to 14% for the same period in 1997.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       9


<PAGE>

Liquidity and Capital Resources

At September 30, 1998, the Company had  approximately  $1,289,000 in net working
capital  and its  principal  sources of  liquidity  consisted  of  approximately
$212,000  in cash,  a $1  million  line of credit  limited  to 70% of  qualified
accounts  receivable.  The revolving credit facility is secured by the assets of
the Company and requires  the Company to maintain  certain  quarterly  financial
ratios. For the quarters ended June 30, 1998 and September 30, 1998, the Company
was not in compliance with certain  financial  covenants.  However,  the Company
obtained a waiver for both quarters and the line of credit remains  available to
the Company. No borrowings were outstanding under this agreement at quarter end.
As of November 13,  1998,  the Company had  $350,000 of  borrowings  outstanding
under this agreement.

The Company  signed an agreement in February 1998 with its largest  shareholder,
MK Global  Ventures in  association  with its MK GVD Fund, to invest  additional
capital  to finance  operations.  Under the Series J  Preferred  Stock  Purchase
Agreement,  MK GVD Fund agreed to invest, subject to MK Global's acceptance,  up
to $2,000,000 on or before August 21, 1998. The price per share of this Series J
Preferred  Stock,  which the Company has not registered under the Securities Act
of 1933, as amended,  was 85% of the fair market value of the  Company's  common
stock,  based on the  average  of the  closing  bid  price per share for the ten
trading days ending five business days before the closing of the investment. The
Company drew  approximately  $1,300,000  of this capital  commitment in February
1998,  approximately an additional  $100,000 of this capital commitment in March
1998, and an additional  $550,000 in June 1998.  These capital draws were offset
by $25,000 in issuance costs.

The Company expects that it will continue to require significant amounts of cash
to finance  operations.*  The  Company  has not  committed  to make  significant
capital expenditures, but may make such expenditures in the future.* The Company
believes that the existing cash balances,  together with any cash generated from
operations and borrowings  potentially  available under its line of credit, will
be sufficient to meet its cash  requirements  through at least the end of 1998.*
There can be no  assurance,  however,  that the  Company's  anticipation  of its
future cash  requirements will be correct.  Thereafter,  the Company may seek to
raise  additional  working  capital,  primarily  through sales of debt or equity
securities.*  In  addition,  the  Company may seek to raise  additional  working
capital  prior to the end of 1998 if it can raise  such  capital  on  acceptable
terms.*

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled "Factors Affecting Operating Results and Market Price of Stock"
for a discussion of factors that could affect future performance.

                                       10


<PAGE>


The terms of the Series E Preferred Stock,  Series F Preferred  Stock,  Series G
Preferred Stock,  Series H Preferred Stock,  Series I Preferred Stock,  Series J
Preferred  Stock and  outstanding  warrants  grant the holders  thereof  certain
preferential rights including  conversion and/or registration  rights, which may
have a dilutive  effect on existing  shareholders  and may  therefore  limit the
availability of financing,  particularly  equity  financing.  The Company has no
commitments for any such financing,  and there can be no assurance that any such
debt or equity  financing will be available on terms  acceptable to the Company,
or at all. The  Company's  ability to borrow under the line of credit is subject
to compliance with certain financial covenants,  including,  but not limited to,
quarterly  profitability  beginning  with the fourth fiscal  quarter of 1998 and
maintaining a minimum  $1,500,000  tangible net worth. There can be no assurance
that the Company will be successful in complying with these financial covenants.
The Company's  failure to comply with the financial  covenants could preclude it
from utilizing the line of credit, which could have a material adverse effect on
the  Company's  liquidity and financial  condition.  In addition,  the Company's
inability to raise capital, if required, could have a material adverse effect on
the Company's business and results of operations.

FACTORS AFFECTING OPERATING RESULTS AND MARKET PRICE OF STOCK

This  section  and other  parts of this  Quarterly  Report on Form 10-Q  contain
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may  differ  significantly  from  those  anticipated  in  these
forward-looking  statements  as a result of the  factors  set forth below and in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations".  Readers  are  cautioned  not to  place  undue  reliance  on  these
forward-looking   statements,   which   speak  only  as  of  the  date   hereof.
Forward-looking statements are indicated by an asterisk (*).

Among the factors that could cause actual results to differ materially are those
listed below and those listed in the  Company's  SEC reports  including  but not
limited to the annual  report on Form 10-K for the year ended  December 31, 1997
and  quarterly  reports on Form 10-Q for the  quarters  ended March 31, 1998 and
June 30, 1998.

History of Losses and Accumulated Deficits

The Company has  incurred  total net losses of  $13,062,000  from  inception  to
September  30,  1998,  including  a net loss of $734,000  for the quarter  ended
September  30, 1998.  The Company  expects to incur losses for at least the next
quarter of 1998, as it continues to increase  expenditures to promote and expand
its current  publications  and develop and launch new products.* There can be no
assurance  that during 1998 or  thereafter  the Company will be able to increase
its revenues or become profitable. The Company's potential future growth depends
on many  factors,  including  the ability of the  Company to attract  sufficient
advertising  customers for NewMedia,  maintain the circulation base of NewMedia,
have a productive  advertising sales force,  control its costs, and successfully
implement  its  marketing  and product  strategy  in  relation to the  corporate
digital  content  creation  marketplace.   The  Company  has  recently  hired  a
significant  portion of its sales staff who must be trained and integrated  into
the operation.  There can be no assurance that the Company will be successful in
any of these efforts. See "Risks Associated with Sales and Marketing Strategy."

1998 Publishing Strategy; Sales and Marketing Strategy

The key elements of the Company's 1998  publishing  strategy are to focus on the
professional  market for digital content creation,  to return to publishing at a
monthly  frequency of 12 times per year starting in the second  quarter of 1998,
to  maintain  the  stringent  minimum  qualification   criteria  that  potential
subscribers were required to meet in order to qualify for a subscription, and to
maintain the guaranteed circulation base of 215,000 qualified NewMedia readers.*
In  addition,  the  Company  increased  the  price it  charges  for a  one-time,
full-page,  four-color  advertisement in NewMedia from $17,845 to 

                                       11

<PAGE>

$19,995.  There can be no assurance that the Company's  publishing strategy will
result  in  increased  revenues  or  in  profitability.  Certain  components  of
production,  circulation and editorial expenses  associated with this publishing
strategy  will  increase.*  As NewMedia's  publishing  frequency  changes in the
second  quarter  of 1998  from 16 times  per year to  monthly,  there  can be no
assurance  that  advertising  revenues,  minus  variable  production and postage
charges from the new publishing  frequency of three issues per quarter,  will be
greater than the previous rate of four issues per quarter.  The Company has been
undergoing an  advertising  category  transition  since the second half of 1995,
away from the consumer market toward the professional market for digital content
creation.  To replace these consumer market  advertisers and to grow advertising
revenues,  the  Company  needs  to  attract   advertisements   oriented  to  the
professional market for digital content creation. There can be no assurance that
the  Company  will be able to  attract a  sufficient  number  of  advertisements
oriented to the professional market to make its strategy  successful.  Until the
circulation  direct mail (and associated)  campaigns for qualified readers using
the  qualification  criteria is  completed,  there can be no assurance  that the
estimated purchasing power of new media products and services will be maintained
with a reasonable level of circulation  expenditures.  As a result,  the Company
does not expect growth in advertising  revenues until at least the first quarter
of 1999,  if at all.*

-----------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  for a discussion of factors that could affect future
performance.

                                       12
<PAGE>


Illiquidity of Trading Market; Possible Delisting of Securities from the Pacific
Exchange; Risk of Penny Stock Status

The  Company's  Common  Stock trades on the OTC Bulletin  Board.  The  Company's
Common  Stock is also quoted on the Pacific  Exchange.  In September  1998,  the
Company was delisted from trading on the Nasdaq SmallCap Market.  Currently, the
Company is not in  compliance  with  continued  listing  criteria of the Pacific
Exchange.  Specifically, the Company is not in compliance  with the net tangible
asset  requirements  of the Pacific  Exchange  and the  minimum  share bid price
requirements  of the Pacific  Exchange.  The Company,  therefore,  is subject to
possible delisting procedures.  The Company will need to raise additional equity
capital or increase net worth through  profitability in order to comply with the
Pacific  Exchange  listing  criteria,  and  there can be no  assurance  that the
Company will be successful in doing so or that the share bid price of the Common
Stock will increase to $1 or more if the Company is capable of doing so. In such
case,  there can be no assurance  that the Pacific  Exchange  will not decide to
initiate  delisting  proceedings  against the Company.  If the Company's  Common
Stock  becomes  delisted  from the Pacific  Exchange,  the  Company  will become
subject to the  Commission's  "penny stock" rules and therefore an investor will
find it more difficult to dispose of, or to obtain accurate quotations as to the
price of, the Company's securities. The "penny stock" rules under the Securities
Exchange Act of 1934,  as amended,  also impose  additional  sales  practice and
market making  requirements on  broker-dealers  who sell and/or make a market in
such  securities.   For  transactions  covered  by  the  penny  stock  rules,  a
broker-dealer  must make special  suitability  determinations for purchasers and
must have received the purchasers'  written consent to the transactions prior to
sale. In addition,  for any transaction  involving a penny stock, unless exempt,
the  rules  require  delivery  prior to any  transaction  in a penny  stock of a
disclosure  schedule  prepared  by the  Commission  relating  to the penny stock
market. Disclosure is also required to be made about commissions payable to both
the broker-dealer and the registered  representative  and current quotations for
the securities.  Finally,  monthly statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited  market in penny stocks.  Consequently,  the Company's  delisting
from the Pacific  Exchange and its becoming subject to the rules on penny stocks
would affect the ability or willingness of  broker-dealers to sell and/or make a
market in the Company's securities and therefore would severely adversely affect
the market liquidity for the Company's securities.


Significant  Dilutive  Effect of Shares Eligible for Future Sale on Market Price
of the Common Stock

As of  September  30, 1998,  there were an aggregate of 2,092,056  shares of the
Company Common Stock  issuable upon the  conversion of Series E Preferred  Stock
plus additional shares for accrued dividends through the date of conversion,  an
aggregate  of 82,250  shares  of the  Company  Common  Stock  issuable  upon the
conversion of Series F Preferred  Stock,  an aggregate of 209,802  shares of the
Company Common Stock  issuable upon the conversion of Series G Preferred  Stock,
an aggregate of 522,827  shares of the Company  Common Stock  issuable  upon the
conversion of Series H Preferred  Stock,  an aggregate of 941,120  shares of the
Company Common Stock  issuable upon the  conversion of Series I Preferred  Stock
and an aggregate of 4,384,306  shares of the Company  Common Stock issuable upon
the  conversion  of  Series J  Preferred  Stock.  (See  Note 3 to the  Financial
Statements).  All of the common shares issuable upon conversion of the preferred
stock, to the extent that they are eligible for sale in the public market, could
have a materially adverse effect on the market price of the

                                       13


<PAGE>

Company's  Common Stock and therefore  make it more difficult for the Company to
sell equity securities or equity-related  securities in the future at a time and
price that the Company deems appropriate.  Additionally, all of the Common Stock
issuable upon conversion of the Preferred Stock has certain registration rights,
which, if exercised, could significantly increase the number of common shares in
the market and could have a material  adverse  effect on the market price of the
Company's Common Stock.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  for a discussion of factors that could affect future
performance.

                                       14


<PAGE>

Control By Principal Stockholders

The Company's principal stockholders, MK Global Ventures II and its affiliate MK
GVD Fund (together,  the "MK Entities"),  together  beneficially own over 75% of
the outstanding Common Stock (assuming  conversion of all outstanding  Preferred
Stock into Common Stock). In addition,  the MK Entities have two representatives
on the  five-person  Board of  Directors  of the  Company.  Accordingly,  the MK
Entities will be able to determine  the  composition  of the Company's  Board of
Directors, will retain voting power to approve all matters requiring stockholder
approval and will continue to have significant influence over the affairs of the
Company.  In addition,  this concentration of ownership could have the effect of
delaying or preventing a change in control of the Company.

Risks Associated With Sales and Marketing Strategy

The Company's ability to achieve future  profitability  depends upon the success
of the Company's  strategy to add and retain sales  personnel in key markets and
to increase the  productivity  of existing  sales  personnel.  In July 1998, the
Company hired a new  Publisher.  The Company also hired  additional  advertising
sales  personnel in the first and second  quarters of 1998. New sales  personnel
typically take from six to nine months to become fully productive, and therefore
the Company's  operating  results during such time may be adversely  affected by
the hiring of such personnel.  In addition,  there can be no assurance that such
new sales  personnel  will  achieve  sufficient  advertising  revenue  to become
profitable  for the Company  after the first six to nine  months or at all.  Any
failure of one or more of the new  personnel  to become  productive  will have a
material adverse effect on the Company's  operating  results.  Furthermore,  the
Company's  revenues  from  advertising  sales depends upon a small number of key
sales  personnel.  Any  inability  of such  personnel  to  maintain  or increase
existing sales levels, or any turnover in such personnel,  would have a material
adverse effect on the Company's operating results.

Year 2000 Compliance

Many computer  systems and software and electronic  products are coded to accept
only two-digit entries in the date code field.  These date code fields will need
to accept four digit entries to distinguish 21st century dates from 20th century
dates. In addition,  certain systems and products do not correctly process "leap
year" dates. As a result,  in the next 14 months,  computer systems and software
("IT  Systems") and other  property and equipment not directly  associated  with
information systems ("Non-IT Systems"), such as elevators,  phones, other office
equipment  used  by  many  companies,  including  the  Company's  customers  and
potential  customers  of the  Company,  may  need to be  upgraded,  repaired  or
replaced  to  comply  with  such  "Year  2000"  requirements,  and  "leap  year"
requirements.

Although the Company has  determined  that most of its  principal IT Systems are
Year 2000 compliant, certain of such internal systems have not been evaluated by
the  Company.  The Company has not yet made an  assessment  of the status of its
Non-IT Systems.

The Company  presently  estimates  that the total cost of addressing  their Year
2000 and leap year issues  will be  immaterial.  These  estimates  were  derived
utilizing numerous assumptions,  including the assumption that they have already
identified  their most  significant  Year 2000 and leap year issues and that the
plans of its third-party  suppliers will be fulfilled in a timely manner without
cost to the Company.  However, these assumptions may not be accurate, and actual
results could differ materially from those anticipated.

                                       15
<PAGE>

 The Company  believes that the purchasing  patterns of companies that subscribe
to NewMedia as well as the Company's advertising clients may be affected by Year
2000 issues, as companies expend significant resources to correct or patch their
current software systems for Year 2000 compliance. These expenditures may result
in  reduced  funds  available  to  purchase  advertising  in  publications  like
NewMedia,  which  could  result in a material  adverse  effect on the  Company's
business, operating results and financial condition.

The Company has not  determined  the state of compliance of certain  third-party
suppliers of services such as phone companies, long distance carriers, financial
institutions  and  electric  companies,  the  failure of any one of which  could
severely  disrupt  the  Company's  ability to carry on its  business  as well as
disrupt the business of the Company's  customers.  The Company could be affected
through  disruptions in the operation of the enterprises  with which the Company
interacts or from general  widespread  problems or an economic crisis  resulting
from  noncompliant  Year 2000 systems.  Despite the Company's efforts to address
the Year 2000 effect on its  internal  systems  and  business  operations,  such
effect could result in a material  disruption of its business or have a material
adverse effect on the Company's or the Company's  business,  financial condition
or results of  operations.  The Company has not developed a contingency  plan to
respond to any of the foregoing  consequences of internal and external  failures
to be Year 2000 and leap year compliant.

                                       16
<PAGE>


Highly Competitive Market

Revenues from NewMedia are derived primarily from the sale of advertising in the
magazine  and will  continue  to be  derived  primarily  from such  sales in the
foreseeable  future.* The technology  publishing industry is highly competitive.
Many of the Company's  competitors have substantially  greater financial,  sales
and  marketing  resources  than the  Company.  Although  the market for  digital
content  creation  and  Internet  products  is an evolving  market,  the Company
competes  for  advertising  revenue  with  numerous  magazines  and  newspapers,
including  personal  computer  magazines.  There  can be no  assurance  that the
Company  will  not  experience  increased   competition  from  new  or  existing
technology  periodicals  or other media,  such as the Internet.  Such  increased
competition,  if  experienced,  would  have a  material  adverse  impact  on the
Company's ability to increase its advertising revenues.

Uncertainty of Growth of the Professional Market for Digital Content Creation

NewMedia is  targeted  toward  professional  users of digital  content  creation
products and services in connection  with computers.  The computer  industry has
historically  been  characterized  by  business  cycles.  To the extent that the
computer industry or professional  digital content creation market experiences a
significant  downturn,  the  Company  would  expect a  similar  downturn  in its
business.  The  professional  market for digital content  creation  products and
services is in the early stages of  development,  and predictions as to its size
and the factors  which will affect it are  inconclusive.  To the extent that the
professional  digital content creation market does not develop as quickly as the
Company  anticipates  or that it  experiences a significant  downturn  following
growth,  the Company's  ability to generate  revenue or profits may be adversely
affected.  Furthermore, even if the professional digital content creation market
does  develop  as  anticipated,  there can be no  assurance  that the demand for
NewMedia will also increase.

Dependence on Key Personnel and Sales Personnel

The Company's  success  depends to a large extent upon the efforts and abilities
of key managerial employees,  including without limitation,  Richard Landry, the
Chief  Executive  Officer,  and  John  Topping,  President  and  Publisher.  The
Company's  success also depends on the performance of key sales  personnel.  The
loss of certain of these key managers or sales  personnel  could have a material
adverse  effect on the  Company.  The Company has not  entered  into  employment
agreements with its executive officers and carries no key man insurance on their
lives.  The success of the Company's  business will also depend upon its ability
to continue  to attract and retain  qualified  employees.  Competition  for such
employees  is intense,  and there can be no  assurance  that the Company will be
successful in attracting or retaining such personnel.

---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's  actual  performance  will meet the
Company's current expectations.  Investors are strongly encouraged to review the
section entitled  "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations"  for a discussion of factors that could affect future
performance.

                                       17
<PAGE>


                           PART II - OTHER INFORMATION


Item 6.           Exhibits and Reports on Form 8-K

                  (a)  Exhibits

                       27.1       Financial Data Schedule

                  (b) No reports on Form 8-K were  filed by the  Company  during
            the fiscal quarter ended September 30, 1998.


Items 1,2,3,4 and 5 are not applicable and have been omitted.


                                       18
<PAGE>


SIGNATURES

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

Date:    November 13, 1998           HyperMedia Communications, Inc.


                                     By: /s/ Richard Landry
                                         ---------------------------------
                                         Richard Landry
                                         President and Chief Executive Officer
                                         (Principal Financial and 
                                         Accounting Officer)

                                       19