U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 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 June 30, 2001.

/ /  TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

     For the transition period from ___________ to ___________

                         Commission File Number 0-29204

                           HOMECOM COMMUNICATIONS, INC
                           ---------------------------
        (Exact name of small business issuer as specified in its charter)

           DELAWARE                                     58-2153309
           --------                                     ----------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)
                               3495 Piedmont Road
                             Building 12, Suite 110
                             Atlanta, Georgia 30305
                            ------------------------
                    (Address of principal executive offices)

                                 (404)-237-4646
                                 --------------
                           (Issuer's Telephone Number)

     Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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 [ ]  No [X]

     The Company did not timely file a Current Report 8-K to report the sale of
certain assets on January 31, 2001.

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of July 31, 2001, there
were 9,359,156 outstanding shares of the registrant's Common Stock, par value
$0.0001 per share.

<PAGE>
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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

                                          HOMECOM COMMUNICATIONS, INC.

                      Consolidated Balance Sheets as of June 30, 2001 and December 31, 2000


                                                                                   June 30, 2001  December 31, 2000
                                                                                    (unaudited)
                                                                                    ------------  -----------------
<S>                                                                                 <C>             <C>
                                                     ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                        $    455,412    $    520,716
   Accounts receivable, net                                                              168,422         443,352
                                                                                    ------------    ------------
     Total current assets                                                                623,834         964,068
Furniture, fixtures and equipment held for sale                                           81,755         476,088
Deposits                                                                                  34,120          37,739
Intangible assets, net                                                                                   557,173
Investment                                                                                               493,905
                                                                                    ------------    ------------
     Total assets                                                                   $    739,709    $  2,528,973
                                                                                    ============    ============

                                     LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
   Accounts payable and accrued expenses                                            $  1,144,474    $  1,264,416
   Accrued payroll liabilities                                                            21,460         375,535
   Current portion of obligations under capital leases                                    13,934         147,523
                                                                                    ------------    ------------
     Total current liabilities                                                         1,179,868       1,787,474
Other liabilities                                                                          7,214         152,782
Obligations Under capital Leases                                                           9,236         357,757
                                                                                    ------------    ------------
     Total liabilities                                                                 1,196,318       2,298,013
                                                                                    ------------    ------------
   Redeemable Preferred stock, Series B, $.01 par value, 125 shares authorized,
     125 shares issued at June 30, 2001 and December 31, 2000 and 17.8 shares
     outstanding at June 30, 2001 and December 31, 2000, convertible,
     participating; $394,266 liquidation value as of June 30, 2001                       251,750         251,750
                                                                                    ------------    ------------
STOCKHOLDERS' DEFICIT:
   Common stock, $.0001 par value, 15,000,000 shares authorized, 9,359,156
     shares issued and outstanding at June 30, 2001 and December 31, 2000                    936             936
   Preferred stock, Series C, $.01 par value, 175 shares issued and authorized,
     92.1 shares outstanding at June 30, 2001 and December 31, 2000,
     convertible, participating; $2,055,021 liquidation value at June 30, 2001                 1               1
   Preferred stock, Series D, $.01 par value, 75 shares issued and authorized,
     1.3 shares outstanding at June 30, 2001 and December 31, 2000,
     convertible, participating; $28,541 liquidation value at June 30, 2001                    1               1
   Preferred stock, Series E, $.01 par value, 106.4 shares issued and authorized,
     106.4 shares outstanding at June 30, 2001 and December 31, 2000,
     convertible, participating; $2,333,057 liquidation value at June 30, 2001                 1               1
   Additional paid-in capital                                                         24,884,655      25,226,101
   Accumulated deficit                                                               (25,593,953)    (25,247,830)
                                                                                    ------------    ------------
     Total stockholder's deficit                                                        (708,359)        (20,790)
                                                                                    ------------    ------------
     Total liabilities and stockholder's deficit                                    $    739,709    $  2,528,973
                                                                                    ============    ============


                   The accompanying notes are an integral part of these financial statements.

                                                       1
<PAGE>


                                         HOMECOM COMMUNICATIONS, INC.


              Consolidated Statements of Operations for the six months ended June, 2001 and 2000


                                                          Three Months Ended             Six Months Ended
                                                                June 30,                     June 30,
                                                      --------------------------    --------------------------
                                                          2001           2000           2001           2000
                                                      -----------    -----------    -----------    -----------
Revenues                                              $   290,985      1,488,486    $   620,797      2,654,957
Cost of Revenues                                          228,674        807,398        553,647      1,218,306
                                                      -----------    -----------    -----------    -----------
GROSS PROFIT                                               62,311        681,088         67,150      1,436,651
                                                      -----------    -----------    -----------    -----------

OPERATING EXPENSES:
   Sales and marketing                                         90        493,251             90      1,042,672
   Product development                                       --           48,457           --           52,250
   General and administrative                             211,059        670,974        454,435      1,656,090
   Depreciation and amortization                             --        1,180,472           --        1,676,229
   Asset Impairment Charge                                493,905           --          493,905           --
                                                      -----------    -----------    -----------    -----------
     Total operating expenses                             705,054      2,393,153        948,430      4,427,240
                                                      -----------    -----------    -----------    -----------
OPERATING LOSS                                           (642,743)    (1,712,065)      (881,280)    (2,990,589)
OTHER EXPENSES (INCOME)
   Interest expense                                          --          (34,529)          --          (30,464)
   Other income, net                                     (132,959)       (14,537)      (140,614)       (45,958)
                                                      -----------    -----------    -----------    -----------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES      (509,784)    (1,662,999)      (740,666)    (2,914,167)

INCOME TAX PROVISION (BENEFIT)                                  0              0              0              0
                                                      -----------    -----------    -----------    -----------
LOSS FROM CONTINUING OPERATIONS                          (509,784)    (1,662,999)      (740,666)    (2,914,167)
LOSS FROM DISCONTINUED OPERATIONS                            --         (641,000)          --         (881,000)
GAIN ON DISPOSAL OF DISCONTINUED BUSINESS SEGMENT         131,603           --          394,543           --
                                                      -----------    -----------    -----------    -----------
NET LOSS                                                 (378,181)    (2,303,999)      (346,123)    (3,795,167)

DEEMED PREFERRED STOCK DIVIDEND                           (36,603)      (871,318)       (73,206)    (1,182,740)
                                                      -----------    -----------    -----------    -----------
LOSS APPLICABLE TO COMMON SHAREHOLDERS                $  (414,784)   $(3,175,318)   $  (419,329)   $(4,977,907)
                                                      ===========    ===========    ===========    ===========

EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED
CONTINUING OPERATIONS                                 $     (0.05)   $     (0.30)   $     (0.08)   $     (0.52)
DISCONTINUED OPERATIONS                                      0.01          (0.08)          0.04          (0.11)
                                                      -----------    -----------    -----------    -----------
LOSS PER SHARE - BASIC AND DILUTED                    $     (0.04)   $     (0.38)   $     (0.04)   $     (0.63)
                                                      ===========    ===========    ===========    ===========

WEIGHTED NUMBER OF SHARES OUTSTANDING                   9,359,156      8,353,619      9,359,156      7,891,021
                                                      ===========    ===========    ===========    ===========


                  The accompanying notes are an integral part of these financial statements.

                                                      2
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                                      HOMECOM COMMUNICATIONS, INC.

         Consolidate Statements of Cash Flows for the three months ended March 31, 2001 and 2000


                                                                                  Six Months Ended
                                                                                      June 30,
                                                                                    (unaudited)
                                                                             --------------------------
                                                                                 2001          2000
                                                                             -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                         $  (346,123)   $(3,795,167)
   Adjustments to reconcile net loss to cash used in operating activities:
     Depreciation and amortization                                                  --        1,814,449
     Write down of investment                                                    493,905
     Provision for bad debts                                                      39,250           (386)
     Deferred rent expense                                                         4,432        (13,858)
   Change in operating assets and liabilities:
     Accounts receivable                                                           8,377       (226,480)
     Prepaid expenses
     Accounts payable and accrued expenses                                      (733,543)      (106,653)
     Accrued payroll liabilities                                                (339,932)      (218,595)
     Unearned revenue                                                               --         (296,319)
     Other                                                                          --           61,480
                                                                             -----------    -----------
       Net cash used in operating activities                                    (873,634)    (2,424,339)
                                                                             -----------    -----------

CASH FLOW FROM INVESTING ACTIVITIES:
   Purchase of furniture, fixtures, and equipment                                (15,679)       (93,265)
   Proceeds from sale of divisions                                               864,603           --
                                                                             -----------    -----------
       Net cash provided by (used in) investing activities                       848,924        (93,265)
                                                                             -----------    -----------

CASH FLOW FROM FINANCING ACTIVITIES:
   Repayment of capital lease obligations                                        (40,594)       (63,202)
   Proceeds from issuance of common shares and exercise of warrants                 --           14,731
   Proceeds from issuance of preferred shares and exercise of warrants              --        1,898,750
   Proceeds from a receivable of a related party                                    --          200,000
                                                                             -----------    -----------
       Net cash provided (used in) financing activities                          (40,594)     2,050,179
                                                                             ===========    ===========

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                            (65,304)      (467,425)
 CASH AND CASH EQUIVALENTS at beginning of period                                520,716      1,497,678
                                                                             -----------    -----------
 CASH AND CASH EQUIVALENTS at end of period                                  $   455,412    $ 1,030,253
                                                                             ===========    ===========


               The accompanying notes are an integral part of these financial statements.

                                                   3
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                          HOMECOM COMMUNICATIONS, INC.

                   Notes to Consolidated Financial Statements


1. BASIS OF PRESENTATION

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to Article 10 of Regulation S-X of the
Securities and Exchange Commission. The accompanying unaudited financial
statements reflect, in the opinion of management, all adjustments necessary to
achieve a fair statement of the financial position and results of operations of
HomeCom Communications, Inc. (the "Company") for the interim periods presented.
All such adjustments are of a normal and recurring nature. These financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on form 10-K.

2. GOING CONCERN MATTERS

     The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidations of liabilities in the normal course of
business. The Company has incurred significant losses since its incorporation
resulting in an accumulated deficit as of June 30, 2001 of approximately $25.5
million. The Company continues to experience negative cash flows from operations
and has been dependent on continued financing from investors to sustain its
activities. There is no assurance that such financing will be available in the
future. These factors raise doubt about the Company's ability to continue as a
going concern.

     On March 23, 2001 the Company announced that it is seeking to wind down its
operations. Our business is dependent on continued financing from investors to
sustain our activities, and we have been unable to obtain the additional
financing that we need to remain in operation. We currently have insufficient
assets to satisfy completely our obligations to our creditors and the
liquidation preferences of our preferred stock. We continue to evaluate our
alternatives, including the possible sale of other assets, but we cannot offer
any assurances that we will be able to identify or complete any transactions
that will enable us to remain in operation.

3. SEGMENT INFORMATION

     Historically, the Company was organized into five separate business units.
The Company has determined that its reportable segments were those that were
based on the Company's method of internal reporting, which disaggregated its
business by product and service category into business units. The Company's
reportable segments were custom Web development (FAST), Internet outsourcing
services (HostAmerica), Internet security services (HISS), software products,
and InsureRate/FIMI. On June 9, 1998, the Company sold substantially all of the
assets of its HostAmerica Internet outsourcing services business unit to Sage
Acquisition Corp. On October 1, 1999 the company sold all of the assets of its
HISS unit to Infrastructure Defense, Inc. On January 31, 2001 the Company sold
all of the assets of its InsureRate/FIMI unit to Digital Insurance, Inc. and on
March 15, 2001 the Company sold the remaining assets of its Software Products
group to Netzee, Inc. The Company currently operates in a single business
segment, including hosting services and web development. Historical segment
information is not provided since each of the former business segments is
presented as discontinued operations.

4. BASIC AND DILUTED LOSS PER SHARE

     Loss per common share is computed by dividing net loss available to common
shareholders by the weighted average number of shares of common stock
outstanding for the period of time then ended. The effect of the Company's stock
options and convertible securities is excluded from the computations for the six
months ended June 30, 2001 and 2000, as it is antidilutive.

                                       4
<PAGE>


5. TAXES

     There was no provision for cash payment of income taxes for the six months
ended June 30, 2001 and 2000, respectively, as the Company anticipates a net
taxable loss for the year ended December 31, 2001.

6. DISPOSITION OF BUSINESS UNITS AND ASSET IMPAIRMENT

     On March 15, 2001, the Company sold substantially all the assets of its
Software Products division to Netzee, Inc. ("Netzee") for $275,000 in cash. The
purchase price was established through arms' length negotiations between the
Company and Netzee. On April 18, 2001, the Company received an additional
$131,603 in contingent consideration which represented the value of certain
contracts that were assigned to Netzee.

     The Company has removed the results of this discontinued operation from the
continuing operations of the Company for all periods presented. The Company
recorded a gain of $262,940 on the sale of this division in the first quarter of
2001 and an additional gain of $131,603 in the second quarter.

     The Company evaluates the recoverability and carrying value of its
long-lived assets at each balance sheet date, based on guidance in SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. Among other factors considered in such evaluation is the
historical and projected operating performance of business operations, the
operating environment of business strategy, competitive information and market
trends. During the second quarter of year 2001, the Company recognized an
impairment loss of $493,905 with no associated tax benefit, related to its
investment in iDefense. The Company identified conditions including continued
losses at iDefense, and iDefense's failure to be able to locate other sources of
operating capital. The Company believes that these items are indicators of asset
impairment and raise doubt about iDefense's ability to continue as a going
concern. Accordingly, the Company concluded that the investment in iDefense was
impaired and recognized a charge related to this asset.

7. STOCKHOLDER'S EQUITY

     As a requirement of the April 2000 private placement of $2,127,000
principle amount of the Company's Series E Convertible Preferred Stock, the
company was obligated to file and have declared effective, within a specified
time period, a registration statement with respect to a minimum of 1,808,293
shares of common stock issuable upon conversion of the Series E Preferred Stock.
As of June 30, 2001, such registration statement has not been declared effective
and penalties are owed to the Series E Preferred Stock holders. In addition, in
lieu of the Company's financial condition as discussed in footnote 2, the
Company has no current plans to ensure that such registration statement is
declared effective. In accordance with the terms of the private placement,
penalties accrue at the rate of 2% per 30 day period of the outstanding purchase
price of the unregistered securities. As of June 30, 2001 $571,382 has been
accrued into accounts payable and accrued expenses for such penalties.

8. OTHER MATTERS

     Certain prior period amounts have been reclassified to conform to current
period presentation.

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

GENERAL

     Except for historical information contained herein, some matters discussed
in this report constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward looking statements include,
but may not be limited to, those statements regarding the Company's
expectations, beliefs, intentions, or strategies regarding the future. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements. Specifically, the
Company's anticipation of its remaining assets and business, and the Company's
statements regarding its ability or inability to continue as a going concern,
are forward looking statements. The Company notes that a variety of risk factors
could cause the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the Company's
forward-looking statements. Reference is made in particular to the discussion
set forth below in this report and set forth in the Company's Annual Report on
Form 10-K and to the Company's Registration Statements on Forms S-1 and S-3.

                                       5
<PAGE>


     On March 23, 2001, we announced our intentions to wind down our operations.
Our business is dependent on continued financing from investors to sustain our
activities, and we have been unable to obtain the additional financing that we
need to remain in operation. We currently have insufficient assets to satisfy
completely our obligations to our creditors and the liquidation preferences of
our preferred stock. We continue to evaluate our alternatives, including the
possible sale of other assets, but we cannot offer any assurances that we will
be able to identify or complete any transactions that will enable us to remain
in operation.

     Historically, we developed and marketed specialized software applications,
products and services that enabled financial institutions and their customers to
use the Internet and intranets/extranets to obtain and communicate important
business information, conduct commercial transactions and improve business
productivity. We provided Internet/intranet solutions in three areas: (i) the
design, development and integration of customized software applications,
including World Wide Web site development and related network outsourcing; (ii)
the development, sale and integration of our existing software applications into
the client's operations; and, (iii) security consulting and integration
services. In October, 1999, we sold our security consulting and integration
services operations and entered into a joint marketing program with the
acquirer. During the first quarter of 2001, we sold our remaining software
applications businesses. Currently, we only derive revenue from professional web
development services and hosting fees.

     On March 29, 2001, Harvey Sax resigned from his position as our President,
Chief Executive Officer and member of our Board of Directors. In connection with
Mr. Sax's resignation, we entered into a separation and release agreement with
Mr. Sax pursuant to which we paid Mr. Sax severance of $150,000 and pursuant to
which we and Mr. Sax released one another from various potential claims and
liabilities.

     On January 31, 2001, we sold substantially all of the assets used in the
operation of our InsureRate division to Digital Insurance, Inc. for
approximately $458,000 in cash and the assumption of certain liabilities. On
March 15, 2001, we sold substantially all of the assets used in our internet
banking operations to Netzee, Inc. in a transaction that generated net proceeds
to HomeCom of approximately $275,000 in March and $131,000 in April for a total
of approximately $406,000. The proceeds from these two transactions do not
represent significant operating capital for us.

     Our revenues and operating results have varied substantially from period to
period, and should not be relied upon as an indication of future results.

RESULTS OF OPERATIONS

  THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

     NET SALES. Net sales decreased 80.5% from $1,488,486 in the second quarter
of 2000 to $290,985 in the second quarter of 2001. This decrease of $1,197,501
is primarily attributable to the absence of any web development work and the
absence of any maintenance contracts. Revenues now consist exclusively of
hosting and hourly billing site maintenance work.

     COST OF SALES. Cost of sales includes salaries for programmers, technical
staff and customer support, as well as a pro-rata allocation of
telecommunications, facilities and data center costs. Cost of sales decreased
from $807,398, or 54.2% of revenues in the second quarter of 2000, to $228,674,
or 78.6% of revenues in the second quarter of 2001. The increase in the
percentage of the cost of selling, general and administrative expense is due to
the lack of web development work and the fact that, at the new reduced manpower
levels, production now accounts for a much higher portion of the cost ratios
used to calculate pro-rata distributions.

                                       6
<PAGE>


     GROSS PROFIT. Gross profit decreased by $618,777 from $681,088 in the
second quarter of 2000 to $62,311 in the second quarter of 2001. Gross profit
margins declined from 45.8% during the second quarter of 2000 to 21.4% during
the second quarter of 2001. This erosion in gross profit is primarily related to
a less profitable product mix and the dramatic decline in revenue.

     SALES AND MARKETING. Sales and marketing expenses include salaries,
variable commissions and bonuses for the sales force, advertising and
promotional marketing materials, and a pro-rata allocation of
telecommunications, facilities and data center costs. The cost of sales
decreased from $493,251, or 33.1% of revenues in the second quarter of 2000 to
$90 in the second quarter of 2001. The Company has discontinued all sales and
marketing efforts at this time.

     PRODUCT DEVELOPMENT. Product development costs consist of personnel costs
required to conduct the Company's product development efforts, and a pro-rata
allocation of telecommunications, facilities and data center costs. Management
believes that continuing investment in product development is required to
compete effectively in the Company's industry. Total expenditures for product
development decreased from $48,457 in the second quarter of 2000 to $0 in the
second quarter of 2001. The Company has discontinued all product development
efforts at this time.

     GENERAL AND ADMINISTRATIVE. General and administrative expenses include
salaries for administrative personnel, insurance and other administrative
expenses, as well as a pro-rata allocation of telecommunications, and facilities
and data center costs. General and administrative expenses decreased from
$670,974 in the second quarter of 2000 to $211,059 in the second quarter of 2001
due to the reductions in overhead begun in the fourth quarter of 2000 and
continued in the second quarter of 2001. As a percentage of net sales, these
expenses increased from 45.1% in the second quarter of 2000 to 72.5% in the
second quarter of 2001, due to continued reductions in revenue.

     DEPRECIATION AND AMORTIZATION. Depreciation and amortization includes
depreciation and amortization of computers, network equipment, office equipment,
equipment under capital leases and intangible assets. Depreciation and
amortization was $1,180,472, or 79.3% of revenues in the second quarter of 2000.
With the write down of the carrying value of all fixed assets in the fourth
quarter of 2000 and the Company's announcement that it intends to wind-down its
operations, the company has suspended depreciation of its remaining assets.

     ASSET IMPAIRMENT CHARGE. We recorded an asset impairment charge of $493,905
to reduce the carrying value of the investment in iDefense to zero. IDefense has
been unable to obtain sufficient operating funds to the extent that its
continued viability as a going concern is in question.

     OTHER INCOME. Other income consists of miscellaneous amounts received which
are outside the normal course of operations. Other income increased $109,422,
from $14,537 in the second quarter of 2000 to $132,959 in the second quarter of
2001. The increase is primarily due to the favorable settlement of a $130,000
liability related to the prior sale of certain assets.

    SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

     NET SALES. Net sales decreased 76.6% from $2,654,957 in the first six
months of 2000 to $620,797 in the first six months of 2001. This decrease of
$2,034,160 is primarily attributable to the absence of any web development work
and the absence of any maintenance contracts. Revenues now consist exclusively
of hosting and hourly billing site maintenance work.

     COST OF SALES. Cost of sales includes salaries for programmers, technical
staff and customer support, as well as a pro-rata allocation of
telecommunications, facilities and data center costs. Cost of sales decreased
from $1,218,306, or 45.9% of revenues in the first six months of 2000, to
$553,647, or 89.2% of revenues in the first six months of 2001. The increase in
the percentage of the cost of selling, general and administrative expense is due
to the lack of web development work and the fact that, at the new reduced
manpower levels, production now accounts for a much higher portion of the cost
ratios used to calculate pro-rata allocations.

                                       7
<PAGE>


     GROSS PROFIT. Gross profit decreased by $1,369,501 from $1,436,651 in the
first six months of 2000 to $67,150 in the first six months of 2001. Gross
profit margins declined from 54.1% during the first quarter of 2000 to 10.8%
during the first six months of 2001. This erosion in gross profit is primarily
related to a less profitable product mix and the dramatic decline in revenue.

     SALES AND MARKETING. Sales and marketing expenses include salaries,
variable commissions and bonuses for the sales force, advertising and
promotional marketing materials, and a pro-rata allocation of
telecommunications, facilities and data center costs. The cost of sales
decreased from $1,042,672, or 39.3% of revenues in the first six months of 2000
to $90 in the first six months of 2001. The Company has discontinued all sales
and marketing efforts at this time.

     PRODUCT DEVELOPMENT. Product development costs consist of personnel costs
required to conduct the Company's product development efforts, and a pro-rata
allocation of telecommunications, facilities and data center costs. Management
believes that continuing investment in product development is required to
compete effectively in the Company's industry. Total expenditures for product
development decreased from $52,250 in the first six months of 2000 to $0 in the
first six months of 2001. The Company has discontinued all product development
efforts at this time.

     GENERAL AND ADMINISTRATIVE. General and administrative expenses include
salaries for administrative personnel, insurance and other administrative
expenses, as well as a pro-rata allocation of telecommunications, and facilities
and data center costs. General and administrative expenses decreased from
$1,656,090 in the first six months of 2000 to $454,435 in the first six months
of 2001 due to the reductions in overhead begun in the fourth quarter of 2000
and continued in the first six months of 2001. As a percentage of net sales,
these expenses increased from 62.4% in the first six months of 2000 to 73.2% in
the first six months of 2001, due to continued reductions in revenue.

     DEPRECIATION AND AMORTIZATION. Depreciation and amortization includes
depreciation and amortization of computers, network equipment, office equipment,
equipment under capital leases and intangible assets. Depreciation and
amortization was $1,676,229, or 63.1% of revenues in the first six months of
2000. With the write down of the carrying value of all fixed assets in the
fourth quarter of 2000 and the Company's announcement that it intends to
wind-down its operations, the company has suspended depreciation of its
remaining assets.

     ASSET IMPAIRMENT CHARGE. We recorded an asset impairment charge of $493,905
to reduce the carrying value of the investment in iDefense to zero. IDefense has
been unable to obtain sufficient operating funds to the extent that its
continued viability as a going concern is in question.

     OTHER INCOME. Other income consists of miscellaneous amounts received which
are outside the normal course of operations. Other income increased $94,656,
from $45,958 in the second quarter of 2000 to $140,614 in the second quarter of
2001. The increase is primarily due to the favorable settlement of a $130,000
liability related to the prior sale of certain assets.

LIQUIDITY AND CAPITAL RESOURCES

     Our sources of capital are extremely limited. We have incurred operating
losses since inception and as of June 30, 2001, we had an accumulated deficit of
$25,593,953 and a working capital deficit of $556,033. On March 23, 2001, we
announced our intentions to wind down operations. While we continue to evaluate
our alternatives, we have been unable to obtain additional financing and do not
have sufficient assets to completely satisfy our obligations to our creditors
and the liquidation preferences of our preferred shareholders.

     We believe that we have exhausted our current sources of capital and also
believe that it is highly unlikely that we will be able to secure additional
capital that would be required to undertake additional steps to continue our
operations. We may elect to implement other cost reduction actions as we may
determine are necessary and in our best interests, including the possible
additional sale of assets. Also, we believe that there may be value in remaining
current in our reporting obligations under the Securities Exchange Act of 1934,
although we can give no assurance that we will ever be able to realize any value
from our situation. If we cannot resolve our liabilities, and no other
alternatives are available, we may be forced to seek protection from our
creditors. The aforementioned factors raise substantial doubt about our ability
to continue as a going concern. The financial statements included herein have
been prepared assuming the Company is a going concern and do not include any
adjustments that might result should the Company be unable to continue as a
going concern.

                                       8
<PAGE>


Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Not Applicable

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     Not Applicable

Item 2. Changes in Securities and Use of Proceeds

     Not Applicable

Item 3. Defaults Upon Senior Securities

     Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

     Not Applicable

Item 5. Other Information

     Not Applicable

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

     3.1  Restated Certificate of Incorporation of the Registrant. (Incorporated
          herein by reference to exhibit of the same number in the Form S-1
          Registration Statement of the Registrant (Registration No.
          333-12219)).

     3.2  Restated Bylaws of the Registrant. (Incorporated herein by reference
          to exhibit of the same number in the form S-1 Registration Statement
          of the Registrant (Registration No. 333-12219)).

     3.3  Certificate of Designation of Series A Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          Form S-1 Registration Statement of the Registrant (Registration No.
          333-42599)).

     3.4  Certificate of Designation of Series B Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          form 10-K of the Registrant filed with the Commission on March 31,
          1998).

     3.5  Certificate of Designation of Series C Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          registration statement on Form S-1 of the Registrant filed with the
          Commission on October 5, 1999 (Registration No. 333-86837)).

                                       9
<PAGE>


     3.6  Certificate of Designation of Series D Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          registration statement on Form S-1 of the Registrant filed with the
          Commission on October 5, 1999 (Registration No. 333-86837)).

     4.1  See Exhibits 3.1 and 3.2 for provisions of the Restated Certificate of
          Incorporation and Bylaws of the Registrant defining rights of the
          holders of Common Stock of the Registrant. (Incorporated herein by
          reference to exhibit of the same number in the Form S-1 Registration
          Statement of the Registrant (Registration No. 333-12219)).

     4.2  Specimen Stock Certificate. (Incorporated herein by reference to
          exhibit of the same number in the Form S-1 Registration Statement of
          the Registrant (Registration No. 333-12219)).

     4.3  Form of Warrant. (Incorporated herein by reference to exhibit of the
          same number in the Form S-1 Registration Statement of the Registrant
          (Registration No. 333-12219)).

     (b)  Reports on Form 8-K

     None





                                       10
<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.



     August 6, 2001                        HOMECOM COMMUNICATIONS, INC.


                                           BY: /s/ TIMOTHY R. ROBINSON
                                           ---------------------------
                                           Timothy R. Robinson
                                           Executive Vice President and
                                           Chief Financial Officer
                                           (Principle Accounting Officer)




                                       11
<PAGE>


EXHIBIT INDEX

     3.1  Restated Certificate of Incorporation of the Registrant. (Incorporated
          herein by reference to exhibit of the same number in the Form S-1
          Registration Statement of the Registrant (Registration No.
          333-12219)).

     3.2  Restated Bylaws of the Registrant. (Incorporated herein by reference
          to exhibit of the same number in the form S-1 Registration Statement
          of the Registrant (Registration No. 333-12219)).

     3.3  Certificate of Designation of Series A Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          Form S-1 Registration Statement of the Registrant (Registration No.
          333-42599)).

     3.4  Certificate of Designation of Series B Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          form 10-K of the Registrant filed with the Commission on March 31,
          1998).

     3.5  Certificate of Designation of Series C Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          registration statement on Form S-1 of the Registrant filed with the
          Commission on October 5, 1999 (Registration No. 333-86837)).

     3.6  Certificate of Designation of Series D Convertible Preferred Stock.
          (Incorporated herein by reference to exhibit of the same number in the
          registration statement on Form S-1 of the Registrant filed with the
          Commission on October 5, 1999 (Registration No. 333-86837)).

     4.1  See Exhibits 3.1 and 3.2 for provisions of the Restated Certificate of
          Incorporation and Bylaws of the Registrant defining rights of the
          holders of Common Stock of the Registrant. (Incorporated herein by
          reference to exhibit of the same number in the Form S-1 Registration
          Statement of the Registrant (Registration No. 333-12219)).

     4.2  Specimen Stock Certificate. (Incorporated herein by reference to
          exhibit of the same number in the Form S-1 Registration Statement of
          the Registrant (Registration No. 333-12219)).

     4.3  Form of Warrant. (Incorporated herein by reference to exhibit of the
          same number in the Form S-1 Registration Statement of the Registrant
          (Registration No. 333-12219)).


                                       12