<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

(Mark One)

[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [FEE REQUIRED]

                    FOR THE FISCAL YEAR ENDED APRIL 30, 2000

                                       OR

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

               For the transition period from __________ to ______


                         Commission File Number: 0-17168

                       FASTCOMM COMMUNICATIONS CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                VIRGINIA                                        54-1289115
----------------------------------------                  ----------------------
     (State or other jurisdiction of                         (I.R.S. Employer
      incorporation or organization)                      Identification Number)


        45472 HOLIDAY DRIVE
          DULLES, VIRGINIA                                         20166
----------------------------------------                  ----------------------
(Address of principal executive offices)                         (Zip Code)


        Registrant's Telephone Number, including area code: 703/318-7750

        Securities registered pursuant to Section 12(b) of the Act: None.

           Securities registered pursuant to Section 12(g) of the Act:


                     COMMON STOCK, PAR VALUE $.01 PER SHARE
--------------------------------------------------------------------------------
                                (Title of Class)

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
    ---    ---

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes  X  No
                                       ---    ---

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

The aggregate market value of the Common Stock of the registrant held by
non-affiliates of the registrant, computed by reference to the last sale price
of such shares as of the close of trading on July 5, 2000, was $49,634,919
(22,059,964 shares times $2.25). As of July 5, 2000, there were 26,388,699
shares of the Common Stock of the registrant outstanding.

Documents incorporated by reference: NONE


<PAGE>   2


                       FASTCOMM COMMUNICATIONS CORPORATION

                                    FORM 10 K

                        FOR THE YEAR ENDED APRIL 30, 2000

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                             PART I.                                                 PAGE
<S>            <C>                                                                                   <C>
  Item 1.      Description of Business.                                                                 3
  Item 2.      Description of Properties.                                                              10
  Item 3.      Legal Proceedings.                                                                      10
  Item 4.      Submission of Matters to Vote of Security Holders.                                      11
</TABLE>



<TABLE>
<CAPTION>
                                            PART II.                                                 PAGE
<S>            <C>                                                                                   <C>
  Item 5.      Market for Registrant's Common Equity and Related Stockholder Matters.                  12
  Item 6.      Selected Financial Data.                                                                17
  Item 7.      Management's  Discussion  and  Analysis  of  Financial  Condition  and  Results of      18
               operations.
  Item 7A      Market Risk                                                                             25
  Item 8.      Financial Statements and Supplementary Data.                                            26
  Item 9.      Changes in and Disagreements with Accountants on Accounting                             27
               and Financial Disclosure
</TABLE>



<TABLE>
<CAPTION>
                                            PART III.                                                PAGE
<S>            <C>                                                                                   <C>
  Item 10.     Directors and Executive Officers of the Registrant.                                     28
  Item 11.     Executive Compensation.                                                                 30
  Item 12.     Security Ownership of Certain Beneficial Owners and Management.                         35
  Item 13.     Certain Relationships and Related Transactions.                                         36
</TABLE>



<TABLE>
<CAPTION>
                                            PART IV.                                                 PAGE
<S>            <C>                                                                                   <C>
  Item 14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K.                       37
</TABLE>


                                       2
<PAGE>   3


                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains "forward-looking statements" within the
meaning of an made under the safe harbor provisions of section 27A of the
Securities Act of 1933 (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934 (the "Exchange Act"). From time to time, we may publish or
otherwise make available forward-looking statements of this nature.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance, and underlying assumptions and
other statements, which are not historical facts. The words "may", "could",
"should", "will", "project", "intend", "continue", "believe", "anticipate",
"estimate", "expect", "plan", "intend" and similar expressions are intended to
identify forward looking statements. Examples of forward-looking statements
include statements regarding, among other matters, our plans, intentions,
beliefs and expectations about the following:

Our future prospect, including our revenues, income, margins, profitability,
cash flow, liquidity, financial condition and results of operations;

Our business plans and strategies;

The risks and uncertainties related to our business;

Our products and services, market position, market share, business, growth
strategies and strategic relationships;

Industry trends, competitive conditions and market conditions, segments and
trends;

The sufficiency of funds from operations and available borrowings to meet our
future working capital and capital expenditure needs;

These forward-looking statements are based on the current plans, intentions,
beliefs and expectations of management as well as assumptions made by and
information currently available to management. You are cautioned not to place
undue reliance on these forward-looking statements. Forward-looking statements
are subject to substantial risks and uncertainties. Any or all of these
forward-looking statements could turn out to be wrong. Forward-looking
statements will be affected by inaccurate assumptions we might make or by known
or unknown risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by the forward-looking statements.
These risks and uncertainties include, but are not limited to, the factors
described under "Additional Factors That May Affect Our Business and Future
Results" in Item 5 below, as well as other risks and uncertainties discussed
elsewhere in this Report, in documents incorporated by reference in this Report
and in our other reports and filings with the Securities and Exchange Commission
("SEC"). We undertake no duty or obligation to update or revise any
forward-looking statements for any reason, whether as a result of new
information, future events or otherwise.



                                     PART I.

ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION

FastComm Communications Corporation (the "Company" or "FastComm") designs,
develops and manufactures signaling gateway products that bridge the gaps that
exist between incompatible communications networks, integrated access devices
that serve as advanced voice/data/video/data convergence routers for enterprise
and carrier users, IBM data center products, and protocol converters
specifically designed for Unisys environments. FastComm also provides advanced
internet protocol and data solutions over Frame Relay and xDSL such as
voice/data integrated access devices (IAD's) and routers.

The Company's goal is to provide customers with leading edge technology and a
cost-effective means of incorporating these technologies into existing or new
networks. FastComm is positioning itself at the forefront of the evolving
converged networks with a customer base that includes domestic and international
corporations, carriers, internet service providers, competitive local exchange
carriers, and State and Federal government agencies.

The Company targets business customers and designs its products for volume sales
through third party resellers such as network product and service dealers,
systems integrators, telephone carriers and original equipment manufacturers.
These resellers form a primary distribution channel for the Company and also
provide installation and maintenance support services.


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<PAGE>   4


The Company was incorporated as MicroTel, Inc. under the laws of the
Commonwealth of Virginia in May 1983. The Company changed its name to Data Safe
Incorporated in February 1984; to Electronic Vaults, Inc., in August 1984; and
to FastComm Communications Corporation, in October 1987.

During the fiscal year ended April 30, 1997, the Company acquired Comstat
Datacomm Corporation, ("CDC or Comstat"), a Georgia corporation engaged in the
data communications business.

In May 1998, FastComm obtained an exclusive license from KG Data Systems, Inc.,
("KG Data") to manufacture, market and sell that firm's ChanlComm(R) product
line, a replacement for channel attached front end processors in IBM based
mainframe networks. Effective March 31, 1999, FastComm acquired all of the
assets and assumed certain liabilities of KG Data. This business is now
internally identified as the Mainframe Communications Division. (See Item 7)

On March 31, 2000, the Company completed its acquisition of substantially all of
the assets and certain liabilities of Cronus Technology, Inc., ("Cronus") a
privately held Illinois corporation that designs, manufactures and sells system
compatibility solutions to the telecommunications industry. The Company believes
that the Cronus acquisition provides it with a series of signaling gateway
products that may be sold to multinational telecommunications corporations at
gross margins significantly greater than the frame relay product line. Further,
Cronus has 22 experienced software engineers which can allow the Company to
significantly expand its research and development activities which could lead to
more efficient product development. (See Item 7)

The Company's shares are quoted on the OTC Bulletin Board under the symbol
FSCX.OB.

PETITION FOR REORGANIZATION UNDER CHAPTER 11 OF THE FEDERAL BANKRUPTCY LAWS

On June 2, 1998, the Company filed a voluntary petition for reorganization under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the Eastern District of Virginia. On March 30, 1999, the Company's Plan of
Reorganization (the "Plan") was approved by the Bankruptcy Court and the Company
emerged from Chapter 11. The Plan became effective on April 12, 1999. The Plan
provided for cash and debenture payments equal to 100% of each allowed claim
plus interest. The positions of all common shareholders were preserved.
Confirmation of the Company's Plan resulted in an extraordinary gain of $833,149
in the fiscal year ended April 30, 1999. On November 18, 1999, a motion for
final decree was granted and the case was closed.

Pursuant to the Plan, Class 1 creditors representing existing holders of
convertible debentures, were required to convert their debt to equity on or
before October 12, 1999. Claims of unsecured creditors, below $1,000, were
repaid in cash on or before April 30, 1999. Claims of unsecured creditors
greater than $1,000 were satisfied by cash payments totaling 25% of the allowed
claim. The Company issued debentures to these unsecured creditors for the
remaining 75% of their allowed claims. To generate the cash requirement of the
Plan, the Company raised $1,000,000 through a private placement offering of
securities to a group of Company employees, insiders and accredited investors.

The Company issued $2,490,357 in convertible debentures in satisfaction of the
remaining 75% of each claim allowed in its Plan. The debentures earn interest at
a rate of 7.5% per annum payable in the form of common stock of the Company at
time of conversion. The debentures are convertible at the average of the closing
price of the Company's common stock for the ten consecutive trading days ending
on the trading day immediately preceding the date of conversion. The Company may
execute a cash prepayment of the debenture at any time. The debentures mature on
April 12, 2003. Any debentures not converted by this date will automatically
convert into common stock of the Company. At April 30, 2000, $767,602 in
convertible debentures were outstanding.

The Company is in compliance with all of the terms and conditions of its Plan.

FASTCOMM'S PRODUCTS

FastComm's suite of products include:

SIGNALING GATEWAY PRODUCT FAMILY

The FastComm line of signaling gateways bridges the gap between incompatible
communications networks, enabling seamless communication between in-band to
in-band, in-band and out-of-band networks and out-of-band to out-of-band SS7,
ISDN, and xGCP networks. There are 4 products in the signaling gateway product
line:

o SIGNALPATH(TM) 230 (SP-230) is a 52 T1/E1 signaling gateway allowing
communication between in-band and out-of-band networks or between networks
supporting different out-of-band protocols. As a signaling gateway supporting
multiple national SS7 and in-band variants, the SP-230 could extend the
softswitch architecture to foreign markets immediately.


                                       4
<PAGE>   5


o SP-201 is a 4 T1/E1 variant of the SP-230.

o TSC-100 is a 24 T1/E1 signaling gateway allowing communication between
different variants of in-band signaling.

o MUX-100 is an analog to digital converter. Protocol conversion is an available
option.

INTEGRATED ACCESS DEVICES (IAD'S) PRODUCT FAMILY

Integrated Access Devices aggregate multiple traffic types (i.e. voice/fax, IP,
video, etc.) onto a single access port or circuit. The FastComm IADs consist of
the following two products:

o METROLAN(TM) family of IADs is ideal for remote office/branch office
environments. Supports up to 3 analog voice/fax ports, Ethernet, and up to 3
physical ports with extensive IP/legacy support.

o GLOBALSTACK(TM) is a modular IAD that complements the MetroLAN(TM) for medium
to large and central site environments. Supports up to 60 compressed digital
voice/fax channels or 6 voice interfaces, Ethernet and a variety of serial data
interfaces (i.e. V.35, X.21, V.24, T1/FT1, E1/N*64kbps, and/or 56/64kbps
CSU/DSUs).

DATA CENTER PRODUCTS FAMILY

The Data Center product family is geared toward providing data routing
capability for IP and legacy communications.

o CHANLCOMM(R) provides the IBM mainframe user with the ability to perform high
speed SNA/SCLC/Bisync and LAN communications without the need for a traditional
front-end processor or costly software products such as NCP or SSP.

o QUICK II(TM) is an integrated router, protocol converter and terminal server
all in one easy to manage compact chassis, for attaching Unisys Poll Select
devices into IP networks.

o MONOFRAD(TM) is a data router supporting a Network and a single User port.

o RINGFRAD(TM) is a data router supporting a Token Ring, a Network port and up
to 4 User ports.

o WEBROUTER(TM) is a compact, low cost Internet/Intranet router supporting
Ethernet and a single Network port.

o ETHERFRAD(TM) is a family of integrated IP and legacy data routers supporting
Ethernet, a Network port and up to 5 User ports.

SIGNALPATH 230

The SignalPath 230 (SP 230) is an advanced signaling protocol converter designed
to solve signaling compatibility problems that exist between communications
networks. Different types of communications protocols, both in-band and
out-of-band, exist globally making communications between such networks
impossible. The SP 230 breaks down the communications barriers presented by
these different protocols and enables a seamless flow of information across any
network. The SP 230 can interface with switches and gateways provided by Cisco,
Lucent, Nortel, Siemens, Ericsson, Alcatel and others. As a signaling gateway
supporting multiple national SS7 and in-band variants, the SP-230 could extend
the softswitch architecture to foreign markets immediately.


METROLAN

The MetroLAN router combines analog voice from switches, PBXs, key systems,
telephones, and the public telephone network with LAN/legacy data & multimedia
and transports it over switched or dedicated digital networks. MetroLAN
satisfies the needs of small office/branch offices that require optimum phone
line performance. With FastComm's routing software, three analog voice ports,
two data equipment serial interfaces and an Ethernet port, the MetroLAN is the
perfect solution for voice/fax/data and video applications. The MetroLAN is
compliant with FRF.11, supporting voice compression (with silence suppression)
which allows up to 3 compressed voice channels to be transported in less than
30Kbps. Bandwidth is dynamically allocated between voice/video/data so that LAN
traffic may continually adapt to fill the unused bandwidth.

GLOBALSTACK

The GlobalStack-EX voice/fax/data/video router combines digital and analog voice
from switches, PBXs, key systems, and remote telephones with LAN/legacy data and
transports it over switched or dedicated digital networks. With digital T1, E1,
ISDN BRI and PRI interfaces, frame relay interfaces for data equipment, an
Ethernet port, and FastComm's routing software, the GlobalStack-EX is the
perfect solution for integrating voice/fax/data and multimedia throughout the
enterprise network. The GlobalStack-EX satisfies large regional and central site
office and POP locations where a confluence of communication mediums converge.
The GlobalStack-EX is compliant with FRF.11, supporting voice compression (with
silence suppression) and allows up to 30 voice channels to be transported in
less than 300Kbps. Bandwidth is dynamically allocated between voice/video/data
so that LAN traffic may continually adapt to fill the unused bandwidth.

CHANLCOMM(R) MAINFRAME COMMUNICATIONS PROCESSOR

During fiscal 1999, the Company began to market the ChanlComm(R) product family
as a replacement for the front end processor ("FEP") in IBM mainframe computer
networks. The ChanlComm(R) takes its name from being "channel attached" to a
main computer, bypassing the typical front end processor installed to handle
communications lines. This product is now shipping with serial (SDLC) interfaces
for wide area network lines


                                       5
<PAGE>   6


(point to point and multidrop). The product development plan includes the
addition of a direct frame relay interface, full IP routing, along with other
capabilities and protocols. The current 16 port capacity will be expanded to at
least 256 ports this fiscal year. In certain applications, the ChanlComm(R) at
the host computer will communicate with FastComm IADS or routers at remote
sites, creating "pull through" business for the Company.

QUICK PRODUCT LINE

The Quick II targets Unisys A and C-series mainframe customers who have been
using legacy CP2000 equipment. Unisys sells and supports the Quick II to
customers who require cost-effective network solutions for communication between
legacy mainframe, peripheral and LAN applications. FastComm supports over 100
protocol variations which legacy equipment users depend on for seamless
operations.

NEW PRODUCT DEVELOPMENT

The Company invests heavily in research and development and expects such
investment to continue.

Recorded expenses for research and development have been as follows:

<TABLE>
<S>                         <C>                       <C>
     Fiscal year 2000       $2,966,000                46% of revenue
     Fiscal year 1999       $2,388,000                51% of revenue
     Fiscal year 1998       $2,255,000                25% of revenue
</TABLE>

The Company's ability to anticipate changes in technology, industry standards
and communications service provider offerings, and its ability to develop and
introduce new and enhanced products on a timely basis that are successful in the
market will be a significant factor in the Company's competitive position and in
its prospects for growth. Management believes that the future success of the
Company depends on its ability to continue to enhance its products, improve
product performance and functionality and to develop new products that address
emerging markets. Management believes that significant expenditures for research
and development will continue to be required.

To bring a product to market quickly, any design may be done entirely
internally, externally, jointly with another firm, or from licensed technology.
Larger companies, with greater engineering resources and more internal
expertise, may be able to develop a larger portion of their products without
outside technology. Elimination of licensing fees or royalties could provide
them a cost advantage.

Research and development project schedules for high technology products are
inherently difficult to predict, and there can be no assurance that the Company
will achieve its expected initial shipment dates of products in development. The
timely availability of new and enhanced products is critical to the success of
the Company. Delays in availability of these new products, or lack of market
acceptance of such products, could adversely affect the Company.


BACKLOG

Because of its quarterly design and build cycle, the Company builds and fills to
the extent possible all of its customer orders within the fiscal quarter of
receipt. Backlog of undeliverable orders is usually not significant. Management
believes that the Company's backlog as of any given date is not necessarily
indicative of actual revenues for any succeeding period.

Management knows of no material effect from non-compliance with environmental
laws or regulations.


                                       6
<PAGE>   7


SEASONALITY AND INFLATION

The Company's operations have not proven to be seasonal, although quarterly
revenue and net income may vary. Although the Company cannot accurately
determine the amounts attributable thereto, the Company has been affected by
inflation through increased costs of employee compensation and other operating
expenses. The Company believes that inflation has not had a material effect on
the Company's results of operation or financial condition.

MARKETING AND SALES

DOMESTIC

The Company targets its signaling gateway products and its IAD product line to
business customers and designs its products for volume sales through third party
resellers such as network product and service dealers, systems integrators,
telephone carriers and original equipment manufacturers. The Company has
existing relationships and contracts with several large customers such as
Lucent, Nortel, Siemens and Pacific Access Technology. These resellers form a
primary distribution channel for the Company and, in some instances, provide
installation and maintenance support services.

To date, the Company has marketed the ChanlComm(R) product line directly to end
users and will continue to do so until reseller relationships are developed. The
Company is in discussion with several potential resellers of the ChanlComm
product. Since discussions are in the preliminary stages, no assurance can be
made as to the outcome of these discussions. Unisys and Anicom sell the Quick II
directly to their customer base.

During fiscal year 2000, sales to Amadeus, Pacific Access Technology, and Anicom
accounted for 18%, 15% and 12% of total sales. During fiscal years 1999 and
1998, sales to Alcatel Data Networks accounted for 28% and 32% of total sales.

There were no Government contracts during the fiscal year that were subject to
renegotiation of profits or termination.

INTERNATIONAL

In the international marketplace, independent distributors represent the Company
in more than 35 countries. These firms are most often locally owned and managed,
which gives them an important presence in their markets. Terms of international
distribution agreements are similar to domestic agreements and grant to the
distributor similar stock adjustment/rotation and stock update rights. In most
cases, a distributor obtains non-exclusive rights to all FastComm products for a
specific geographic area. In fiscal 2000, 1999 and 1998, the Company had export
sales to foreign customers totaling $616,000, $1,800,000 and $3,292,000,
respectively. In fiscal 1999 and 1998 the majority of the sales to Alcatel Data
Networks were for export, primarily to Latin America and Asia.

During fiscal year 2000, the Company placed significant emphasis on
international selling opportunities. The Company increased its international
sales force and executed new reseller contracts with distributors in Argentina,
Bolivia, Bosnia, China, Costa Rica, El Salvador, Guatemala, Honduras, Hong Kong,
Korea, Mexico, Nicaragua, Peru, Suriname, Tobago and Trinidad. The Company is in
discussions, of various stages, with significant international customers. Since
contracts have not yet been executed, no assurance can be made as to the outcome
of these discussions. In most instances, the Company requests confirmed letters
of credit, issued in advance, as payment for international sales. The Company
recently signed a three year agreement with Sumisho Electronics to supply the
Japanese Data Center market with the ChanlComm 7790 product.

The Company's export sales may be subject to restrictions on foreign operations,
including restrictions imposed by foreign governments on imports as well as U.S.
Government originated restrictions, and are subject to risks associated with
fluctuations in foreign exchange rates. Although substantially all foreign
contracts are denominated, and revenues are paid, in United States dollars, to
the extent the Company receives payments in foreign currencies, it may incur
gains or losses because of exchange fluctuations between currencies. Moreover,
fluctuations in currency exchange rates may cause the Company's established
prices to be relatively more or less expensive in terms of local currencies.

CUSTOMER SUPPORT AND SERVICE

The Company maintains a technical support staff. Their work primarily supports
resellers, but end users are periodically given technical information and
assistance by telephone. For new products or features, including beta tests,
Company personnel will visit end user sites to participate in installation and
training.


                                       7
<PAGE>   8


NCR Corp. and Unisys have signed agreements with the Company whereby they assume
responsibility for installation and/or maintenance, under certain circumstances,
of FastComm products sold by them or by third parties. The Company may enter
into similar agreements with others in the future.

PROMOTION

The Company places advertisements in trade publications that stress the unique
product benefits. Most publications in which the Company advertises have
international circulation, aiding the Company's selling efforts outside the U.S.

The Company participates regularly in industry trade shows in order to meet
prospective customers, generate sales leads, communicate with the press, and to
do market research. The Company exhibits under its own name and also takes
opportunities to exhibit with its dealers and distributors who show FastComm
products. To generate interest and to identify prospects among data center
managers, the Company uses direct mail targeted at known users of mainframe
computers.

COMPETITION

The communications industry is highly competitive. Rapid technological change,
evolving standards and regulatory developments characterize the market for the
Company's products. Many of the Company's competitors and potential competitors
have greater financial, technological, manufacturing, marketing and personnel
resources than the Company. The Company's success depends to a large extent on
the insight, experience, and energy of its people, and therefore on its ability
to attract and retain experienced professionals.

The primary competition for each of the Company's major products is as follows:

SIGNALING GATEWAY PRODUCT FAMILY: The Company believes that there is a distinct
market for signaling gateways and that the SignalPath product family is well
positioned to take advantage of this trend. Competitors include California-based
TEKELEC, Inet Technologies, Hewlett-Packard, Sun Microsystems, and Telesoft
Design Ltd. Although, Sun and Hewlett Packard have SS7 interfaces, they focus on
their server market without much emphasis on the multitude of international
signaling variants.

The complexity and lack of interworking standards represent high barriers to
entry. Accordingly, very few companies concentrate on this market. Those
companies that have demonstrated development of signaling products have
typically become acquisition targets of larger telecommunications companies.

INTEGRATED ACCESS DEVICES (IAD'S) PRODUCT FAMILY: Competition is extensive in
this marketplace. Major competitors include the Motorola Vanguard product line,
Cisco Systems' 2520-2523 and 3800, and the ACT Networks' Netperformer product
family. While the Company currently has less than a 2% share of the total IAD
market, management believes that the Company's products including prioritization
and, in particular, integrated voice capabilities, are extremely attractive at
the current selling prices.

UNISYS MAINFRAME MARKET: The users of the Quick II product are those with older
Unisys mainframe computers that were designed to communicate using the
Poll/Select protocol on leased lines. Progress in computers and communications
technologies will force these networks to a more modern transmission format,
typically frame relay or Internet Protocol (IP). FastComm supports both
migration strategies with the Quick II, which replaces the CP 2000. The Quick II
is sold and supported by Unisys personnel as well as certain other FastComm
resellers.

IBM MAINFRAME MARKET: The ChanlComm(R) is one of the very few communications
devices that attach directly to the mainframe computer via the block or byte
channel (bus and tag connectors). No other IAD vendor offers a channel-attached
device. Among router vendors, only Cisco has announced a channel attachment
option to their larger router line. This channel attachment technology is
licensed by Cisco from IBM. The Company believes that the cost to buy or design
a channel interface to the mainframe will pose a significant barrier to new
entrants to the market for several years.

Current users of IBM front end processors ("FEP") were advised that IBM
discontinued support for certain older models in December of 1998. A similar
plan for the remaining larger version (the IBM 3645) has alarmed customers who
do not wish to convert to router based networks. These enterprises are now
FastComm's prime targets for the newest release of of the ChanlComm product
line. The ChanlComm(R) products easily replace all FEP versions. ThirD party
maintenance organizations continue to support the older FEP's, thus allowing
them to remain in service for some additional time. The Company expects that
these organizations will continue to offer this support as it offers them a very
lucrative business opportunity. These maintenance organizations are also sales
prospects, as they too can benefit from the ease of use and state of the art of
this product.


                                       8
<PAGE>   9


Having a channel-attached product is expected to provide a competitive advantage
to the Company as it seeks a share of the business to be generated between now
and the year 2003 when an expected 15,000 IBM networks convert from leased lines
to a frame relay transmission service. However, competitors like IBM and Cisco,
which are larger and have greater resources, are expected to compete for the
same customers.

LICENSES, PATENTS, AND TRADEMARKS

The communications industry traditionally relies more on trade secrets and rapid
obsolescence than patents. None of the Company's current products is protected
by patent.

On November 12, 1998, the Company entered into a 20-year licensing agreement
with Telogy Networks, Inc. to deliver their Golden Gateway Voice Over Packet
software and documentation service. The total committed cost was $281,000.
Payments are spread over a 24-month period. Deliverables include DSP unit
licenses and developer's kit and MCU unit licenses and developer's kit.

On November 24, 1998, the Company obtained a worldwide non exclusive royalty
bearing license from Alcatel Data Networks, Inc. ("Alcatel") to use and further
develop Alcatel owned technology and intellectual property. The terms and
conditions of this agreement call for a one-time fee of $50,000 payable in four
equal installments plus royalty payments based on unit sales. The initial term
of this agreement is twenty years and is renewable subject to negotiation of
terms and conditions agreeable to both parties 30 days prior to its expiration.

On May 5, 1999 the Company entered into a licensing and task order agreement
with Taboret, an Arinc Inc. subsidiary. The license provides for development of
a graphical user interface (GUI) and a suite of SNMP tools to manage
communication equipment and create management reports. The total committed cost
for the basic management system was $61,000. An additional committed cost for
each FastComm unit type, special project labor, editor, maintenance, block
distribution run time licenses and options totaled $15,000.

The Company licenses outside technology for its product development. The cost to
license software from commercial vendors is less than the loaded cost of
internal developments. Licensing also speeds product delivery. All of the
software licenses currently owned by the Company are perpetual. The Company
expects to license additional software, particularly in areas that are highly
standardized and have multiple sources to minimize costs.

Software related to the ISDN, X.25, voice compression and SNA interfaces is
licensed to the Company and has been integrated into its IAD/ router product
line.

MANUFACTURING

Over the past several years, the Company has outsourced the manufacturing of its
circuit board assemblies to third party manufacturers. The Company believes that
the outsourcing of manufacturing preserves capital for other business purposes.
The Company's in house manufacturing process is limited to that of planning,
purchasing, material management, final assembly and testing. The Company
utilizes several manufacturers for this process and believe that its
relationships with these organizations is satisfactory. The Company will
continue this outsourcing activity for the foreseeable future.

Most of the components used in the Company's manufacturing process are available
from multiple sources. Single-source items are all from large vendors with
stable histories of supplying material as needed. FastComm and its third party
manufacturers have established strong relationships with key vendors to reduce
the risk of significant shortages or delays relating to availability of
materials. Shortages or delays in the supply of components, however, could
adversely affect the Company's ability to meet scheduled product shipments in
any particular fiscal quarter, which could materially affect the Company's near
term operating results. Management believes the loss of any supplier would not
be materially detrimental to the Company's business in the long term.

EMPLOYEES

At July 5, 2000, the Company had 103 full-time employees. None of the Company's
employees is covered by a collective bargaining agreement. The Company believes
that its employee relations are satisfactory.

FUTURE PROSPECTS

On a forward-looking basis, the Company finalized the development of its
GlobalStack and MetroLan product lines, all of which have voice, data and video
capabilities. The Company has added new features to its Quick product line that
qualify this product for a larger and enhanced distribution channel. The Company
believes that the GlobalStack and MetroLan products have a strong international
application. Accordingly, the Company has enhanced its international selling
presence in Brazil, Australia, the Pacific Rim, Colombia, Venezuela and Central
America.


                                       9
<PAGE>   10


During its fiscal year ended April 30, 2000, the Company executed non exclusive
distribution agreements with resellers in Argentina, Bolivia, Bosnia, China,
Costa Rica, El Salvador, Guatemala, Honduras, Hong Kong, Korea, Mexico,
Nicaragua, Peru, Suriname, Tobago and Trinidad.

The acquisition of Cronus allows FastComm to offer signaling gateways that
bridge the gap between incompatible communications networks. These gateways
enable seamless communication between in-band and out-of-band networks, or
between out-of-band to out of band SS7 variants. Cronus has existing
relationships and contracts with several large multi national customers such as
Nortel, Lucent and Siemens. Discussions with other large customers are ongoing.
The Company believes that it is well positioned to capitalize on increasing
international cross border traffic and the growing voice over packet market. The
Company believes that through additional marketing and development efforts,
Cronus product line sales could increase significantly in fiscal 2001.

The technologies acquired as part of this acquisition are complementary and
enable the Company to migrate into new marketplaces such as the softswitch.
Softswitch is an alternative to circuit based switching technology. Management
believes that softswitch will force equipment makers to require more signaling
gateway products. The Company believes that it will have the opportunity to
complement softswitch solutions offered by companies currently in this
marketplace as well as perhaps move into the softswitch market itself, at some
future date.

Initial shipments of the ChanlComm(R) 7790 product, for field trial purposes,
commenced in the fourth quarter oF fiscal 2000. The Company anticipates that
sales of the ChanlComm(R) 7790 product could begin generating significanT
revenues commencing mid year of its fiscal year ended April 30, 2001. The
Company recently signed a three year agreement with Sumisho Electronics to
supply the Japanese Data Center market with ChanlComm 7790 product. The Company
believes that this agreement represents a major milestone for this product line.
In late July 2000, subsequent to year end, the 7790 product was released to
production and commercial customer shipments commenced.

ITEM 2. DESCRIPTION OF PROPERTIES

The Company's executive, administrative and marketing operations are located in
a leased 17,000 square foot facility in Dulles, Virginia. Aggregate base rent
and common charges for this facility approximated $284,000 for the fiscal year
ended April 30, 2000. This lease expires April 30, 2003. The Company's research
and development, technical support and manufacturing operations are located in a
leased 17,250 square foot facility located in Chantilly Virginia. Aggregate base
rent and common charges for this facility approximate $178,000 on an annual
basis. This lease, which was assumed as part of the Company's acquisition of
Cronus, expires on September 30, 2002.

As part of the KG Data acquisition, the Company assumed a three year lease for a
3,700 square foot facility in Norwalk, Connecticut. Expenditures under this
lease agreement approximated $49,000 for the fiscal year ended April 30, 2000.
This lease will expire June 30, 2001.

The Company also leases a small sales office in Colorado.

Management believes that its leased facilities adequately serve the Company's
present needs.


ITEM 3. LEGAL PROCEEDINGS

In fiscal 1995, the Securities and Exchange Commission (the "SEC") began an
inquiry relating to certain prior public disclosures and periodic reports of the
Company. In September 1999, the Company, its Chief Executive Officer and its
Chief Financial Officer agreed to a settlement with the SEC. Without admitting
or denying the allegations in the complaints filed by the SEC, the Company
consented to the entry of a final Judgment which enjoins it from violations of
Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange
Act of 1934. Without admitting or denying the allegations, the Company's Chief
Executive Officer and its Chief Financial Officer each agreed to consent to the
entry of an Order to cease and desist committing or causing any violations or
any future violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the
Exchange Act and Rules 12b-20 and 13a-13 promulgated thereunder. The Company's
Chief Financial Officer also agreed to cease and desist from committing or
causing any violations or any future violations of Rule 13a-1 promulgated under
the Exchange Act.

On June 2, 1998, the Company filed a voluntary petition for reorganization under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the Eastern District of Virginia. On March 30, 1999 a Plan of Reorganization
was approved by the Bankruptcy Court and the Company emerged from Bankruptcy
protection. The Plan of Reorganization became effective on April 12, 1999. The
Plan provided for cash and debenture payments equal to 100% of each allowed
claim plus interest. The positions of all common shareholders were preserved.
The Chapter 11 Bankruptcy filing had a negative impact on the Company's sales,
its


                                       10
<PAGE>   11


relationships with vendors and ability to hire and retain qualified employees,
among other areas. On November 18, 1999 a motion for final decree was granted
and the case was closed.

No other material legal proceeding to which the Company is party or to which the
Company is subject is pending and no such proceeding is known by the Company to
be contemplated.

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

None.


                                       11
<PAGE>   12


                                    PART II.


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Prior to June 9, 1998, FastComm shares were traded publicly on the NASDAQ
National Market under the symbol FSCX. On June 9, 1998, the Company's shares
were delisted from the National Market System. Effective June 16, 1998, the
Company's shares have been quoted on the OTC Bulletin Board under the same
symbol.

The following table sets forth the range of high and low bid prices or sales
prices, as applicable, of the Common Stock for each fiscal quarter during the
two most recent fiscal years, as furnished by NASDAQ. The bid prices represent
prices between dealers, do not include retail markups, markdowns or commissions
and do not necessarily represent actual transactions.


<TABLE>
<CAPTION>
                                                               High         Low
                                                               ----         ---
<S>                                                            <C>         <C>

Fiscal Year Ended April 30, 2000:

               First Quarter ...........................       $1.34       $ .80
               Second Quarter ..........................        1.03         .69
               Third Quarter ...........................        6.06         .77
               Fourth Quarter ..........................        5.31        2.69
</TABLE>


<TABLE>
<CAPTION>
                                                               High         Low
                                                               ----         ---
<S>                                                            <C>         <C>
Fiscal Year Ended April 30, 1999:

               First Quarter ...........................       $2.28       $ .38
               Second Quarter ..........................         .63         .25
               Third Quarter ...........................        1.50         .25
               Fourth Quarter ..........................        1.59         .94
</TABLE>



As of July 5, 2000, there were 298 registered holders of record of the Common
Stock and the closing sales price on such date for the Common Stock as reported
by NASDAQ was $2.25 per share.

DIVIDEND POLICY

The Company has not paid dividends on its Common Stock. The Company anticipates
that it will retain all earnings to finance the operation and growth of its
business and does not anticipate paying cash dividends on the Common Stock in
the foreseeable future.


                                       12
<PAGE>   13


ADDITIONAL FACTORS THAT MAY APPROVE OUR BUSINESS AND FUTURE RESULTS

THE COMPANY CAUTIONS THAT CERTAIN STATEMENTS IN THIS REPORT AND IN THE COMPANY'S
OTHER PERIODIC REPORTS FILED PURSUANT TO THE UNITED STATES SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), IN MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND
ELSEWHERE , MAY BE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A
OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT, THE "SAFE HARBOR" FOR
FORWARD LOOKING STATEMENTS ENACTED IN THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. THE FORWARD LOOKING STATEMENTS THAT MAY BE CONTAINED IN THE
COMPANY'S REPORTS UNDER THE EXCHANGE ACT AND IN OTHER ORAL OR WRITTEN STATEMENTS
MADE BY THE COMPANY OR BY ITS AUTHORIZED REPRESENTATIVES INVOLVE A NUMBER OF
RISKS AND UNCERTAINTIES. AS A CONSEQUENCE, ACTUAL RESULTS MIGHT DIFFER
MATERIALLY FROM RESULTS FORECAST OR SUGGESTED IN THESE FORWARD LOOKING
STATEMENTS. SOME OF THESE RISKS AND UNCERTAINTIES ARE IDENTIFIED IN THE
DISCUSSION TO FOLLOW. ADDITIONAL INFORMATION REGARDING THESE FACTORS AND OTHER
IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY MAY BE
REFERRED TO AS PART OF PARTICULAR FORWARD LOOKING STATEMENTS. THE
FORWARD-LOOKING STATEMENTS MADE BY THE COMPANY OR ON ITS BEHALF ARE QUALIFIED IN
THEIR ENTIRETY BY REFERENCE TO THE IMPORTANT FACTORS DISCUSSED BELOW AND TO
THOSE THAT MAY BE DISCUSSED AS PART OF PARTICULAR FORWARD-LOOKING STATEMENTS.

The Company cautions that the following important risk factors, among others,
could cause actual results for the fiscal year ended April 30, 2001 and for
subsequent financial reporting periods to differ materially from those forecast
or suggested in any forward-looking statement made by the Company or on its
behalf, in this report and otherwise. A number of these important factors have
been discussed in this Annual Report on Form 10-K for the fiscal year ended
April 30, 2000 and its quarterly reports on Form 10-Q previously filed with the
United States Securities and Exchange Commission.

WE HAVE A HISTORY OF LOSSES AND MAY EXPERIENCE FUTURE LOSSES

We have incurred net losses of $6,817,000 $5,550,000 and $9,089,000 for the
years ended April 30, 2000, 1999 and 1998, respectively. These losses are
primarily attributable to sales levels insufficient to meet the costs associated
with the development and marketing of new products in an emerging technology and
to litigation costs and costs associated with the Chapter 11 Bankruptcy
described below. Sales levels have been negatively impacted by delays in product
development, delays on the part of the carriers to offer frame relay services
and once offered, incorrect carrier pricing for frame relay services. The
Company actively participates in industry forums that promote frame relay and
ATM services. Further, the Company upgraded and expanded it sales, marketing and
engineering organizations, while decreasing its general and administrative
overhead. The Company is focused on acquisitions and partnership arrangements
intended to expand its technology base and increase sales. There can be no
assurance that the Company will generate sufficient revenues to meet expenses or
to operate profitably in the future.

WE RECENTLY EMERGED FROM BANKRUPTCY

On June 2, 1998, the Company filed a voluntary petition for reorganization under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the Eastern District of Virginia. This filing was a direct result of
enforcement activities by a judgment creditor. All litigation related to this
matter has now been settled. On March 30, 1999, the Company's Plan of
Reorganization was approved by the Bankruptcy Court and the Company emerged from
Chapter 11. The Plan of Reorganization became effective on April 12, 1999. The
Plan provides for cash and debenture payments equal to 100% of each allowed
claim plus interest. The positions of all common shareholders were preserved.
The Chapter 11 Bankruptcy filing had a negative impact on the Company's sales,
its relationships with vendors and its ability to hire and retain qualified
employees, among other areas.

WE ARE ENGAGED IN A HIGHLY COMPETITIVE BUSINESS.

The market for networking systems is extremely competitive. In most of the
markets in which we compete our competitors are more established, benefit from
greater market recognition and have greater financial, technological, production
and marketing resources than we do. Competition could become even more intense
if new companies enter the market or if our existing competitors expand their
product lines. We compete on the basis of product features and capabilities,
performance and price. An increase in competition could have an adverse effect
on our operating results, both in terms of lost market share and revenues and
required investments in research and development and sales and marketing in
order to remain competitive. There can be no assurance that we will be able to
make technological advances or that we will have sufficient resources to fund
the necessary research and development, marketing and sales efforts that will
enable us to profitably compete in our markets. On June 2, 1998, the Company
filed a voluntary petition for reorganization under Chapter 11 of the federal
bankruptcy laws in the United States Bankruptcy Court for the Eastern District
of Virginia. This filing was a direct result of enforcement activities by a
judgment creditor. All litigation related to this matter has been settled. On
March 30, 1999, the Company's Plan of Reorganization was approved by the
Bankruptcy Court and the Company emerged from Chapter 11 on April 12, 1999. The
Plan provides for cash and debenture payments equal to 100% of each allowed
claim


                                       13
<PAGE>   14


plus interest. The positions of all common shareholders were preserved. This
filing had a negative impact on sales during the 1999 fiscal year and, at this
time, the Company is unable to predict the effect this filing and the subsequent
reorganization will have on its ability to compete in its marketplace.

WE RELY ON A LIMITED NUMBER OF KEY EMPLOYEES.

Our success depends to a significant degree upon the continued contributions of
our management, marketing, engineering and technical personnel, many of whom
would be difficult to replace. In addition, as we continue to develop the
ChanlComm product line, we will need to attract and retain additional qualified
personnel. There is intense competition for qualified personnel in our industry,
and there can be no assurance that we will be able to attract and retain the
qualified personnel necessary for the development of our business. Loss of the
services of any of our key employees would be detrimental to our development. We
do not have "key man" life insurance on any of our officers or directors. On
June 2, 1998, the Company filed a voluntary petition for reorganization under
Chapter 11 of the Federal bankruptcy laws in the United States Bankruptcy Court
for the Eastern District of Virginia. As a direct result of this filing, the
Company has suffered the loss of certain key employees. To date, the Company has
been able to refill some of these positions. At this time, the Company is unable
to predict the long-term effect this filing will have on its ability to attract
and retain key employees.

WE MUST BE ABLE TO ADAPT TO CHANGES IN PROTOCOL AND OTHER TECHNOLOGY.

New Data Protocols may be developed that could displace the protocols currently
supported in Company products, requiring additional software development to
sustain the viability of those products. An announcement of such new protocols
could have a negative effect on sales of older designs, as users hesitate to
install equipment based on existing designs until they have evaluated the new
ones. There can be no assurance that the Company would have the necessary
resources, particularly the knowledgeable employees, to implement new protocols
in a timely manner. Such failure to develop adequate products in response to new
technology could adversely affect the Company's profitability. Asynchronous
Transfer Mode (ATM) is a new technology for transmitting digital information,
including voice and data, over a public or private network. Telephone companies
and other operators of public network are deploying ATM in their backbone
segments. If the ATM technology becomes much less expensive, ATM services could
become economically more attractive than frame relay services that currently are
involved in the bulk of the Company's business. If ATM were to become more
popular than frame replay, the Company would need to develop new products,
retrain its employees, and educate its sales and distribution channel partners.
There can be no assurance that the Company will have the resources necessary to
develop appropriate products in a timely manner.

WE MUST INTRODUCE NEW PRODUCTS TO COMPETE

The Company's future revenue is dependent on its ability to successfully
develop, manufacture and market products. In this regard, future growth is
dependent on the Company's ability to timely and successfully develop and
introduce new products, establish new distribution channels, develop
affiliations with leading market participants which facilitate product
development and distribution, and market existing and new products with service
providers, resellers, channel partners, and others. The introduction of new or
enhanced products requires the Company to manage the transition from older
products in order to minimize disruption in customer ordering patterns, avoid
excessive levels of older product inventories and ensure that adequate supplies
of new products can be delivered to meet customer demand. In addition, as the
technical complexity of new products increases, it may become increasingly
difficult to introduce new products quickly and according to schedule. There can
be no assurance that the Company will successfully manage the transition to new
products or that the Company's research and development efforts will result in
commercially successful new technology and products in the future.

WE MAY NEED TO SEEK ADDITIONAL CAPITAL TO FULFILL OUR BUSINESS PLAN

The Company's ability to make future capital expenditures and fund the
development and launch of new products, are dependent on existing cash and
demands on cash to support inventory for the Company's products and the
Company's return to profitability. The timing and amount of the Company's future
capital requirements can not be accurately predicted, nor can there be any
assurance that debt or equity financing, if required, can be obtained on
acceptable terms. There can be no assurance that the company will have cash
available in the amounts and at the times needed.

SOME COMPONENTS OF OUR PRODUCTS ARE AVAILABLE TO US ONLY FROM A LIMITED NUMBER
OF SUPPLIERS

Certain components used in our products are currently available from only one
source and other of the components are available from only a limited number of
suppliers. Although we have generally been able to obtain adequate supplies of
components to date, our inability to develop alternative sources if and as
required in the future, or to obtain sufficient sole source or limited source
components as required, could result in delays or reductions in


                                       14
<PAGE>   15


product shipments. Certain products that are or may in the future be marketed
with or incorporated into our products are supplied by or under development by
third parties. These third parties may be the sole suppliers of such products.
While the Company believes there are a number of suitable manufacturers, there
can be no assurance that current or alternative sources will be able to supply
all of our demands on a timely basis. Also, an unanticipated interruption in
supply could have a short-term effect on our business. It will not be
economically practical for the Company to develop its own manufacturing capacity
in the foreseeable future.

WE ARE DEPENDENT ON PATENTS AND PROPERTY RIGHTS TO PROTECT OUR POSITION IN THE
INDUSTRY

The Company's success depends in part upon its technological expertise and
proprietary product designs. The Company relies upon its trade secret protection
efforts and, to a lesser extent, upon patents and copyrights to protect its
proprietary technologies. There can be no assurance that these steps will be
adequate to deter misappropriation or infringement of its proprietary
technologies or that the Company's competitors will not independently develop
technologies that are substantially equivalent or superior to the Company's
technology. In addition, the laws of some foreign countries do not protect the
Company's proprietary rights to the same extent as do the laws of the United
States. Further, given the rapid evolution of technology and uncertainties in
intellectual property law, there can be no assurance that the Company's current
or future products will not be determined to infringe proprietary rights of
others. Should the Company be sued for patent infringement, there can be no
assurance that the Company will prevail, or, if required by such litigation,
that it will be able to obtain the requisite licenses or rights to use such
technology on commercially reasonable terms. In addition, any litigation,
regardless of the outcome, could result in substantial costs to the Company.

WE COULD BE AFFECTED BY GOVERNMENTAL RESTRAINTS OR CHANGES IN GOVERNMENTAL
POLICY

The Company's products are subject to regulation by the Federal Communications
Commission (the "FCC"), and each of the Company's products must typically be
tested before it can be introduced into the market. Any inability of the
Company's products to conform to FCC regulations or any failure of the Company's
products to meet FCC testing requirements could delay the introduction of the
Company's products into the market, impact the Company's relationships with its
OEMs and otherwise adversely affect the Company. Foreign authorities often
establish telecommunications standards different from those in the United
States, making it difficult and more time-consuming to obtain the required
regulatory approvals. Any significant delay in obtaining such regulatory
approvals could have an adverse effect on the Company's operating results.
Furthermore, changes in such laws, regulations, policies or requirements could
affect the demand for the Company's products or result in the need to modify
products, which may involve substantial costs or delays in sales and could have
an adverse effect on the Company's future operating results.

OUR OUTSTANDING SHARES MAY BE DILUTED

A substantial number of shares of Common Stock are or will be issuable by the
Company upon the exercise of warrants and options which the Company has issued,
which could result in dilution to a Shareholder's percentage ownership interest
in the Company and could adversely affect the market price of the Common Stock.

On July 5, 2000, there were issued and outstanding a total of 26,388,699 shares
of Common Stock. If all convertible debentures, warrants and stock options which
the Company has issued were deemed converted and exercised, as the case may be,
as of that date, there would be issuable approximately 5,880,144 shares of
Common Stock. Upon such conversion and exercise, there would be outstanding
32,268,843 shares of Common Stock. The sale or availability for sale of a
significant number of shares of Common Stock in the public market could
adversely affect the market price of the Common Stock. The availability to the
Company of additional equity financing, and the terms of any such financing, may
also be adversely affected by the foregoing.

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS AND GROWTH RATE

A significant portion of the Company's sales are derived from products shipped
against firm purchase orders received in each fiscal quarter and from products
shipped against firm purchase orders released in that quarter. Unforeseen delays
in product deliveries or the closing of sales, introduction of new products by
the Company or its competitors, fluctuations in customer capital expenditures or
other conditions affecting the networking industry or the economy during any
fiscal quarter could cause quarterly revenue and net earnings to vary greatly.
Further, the Company schedules some production of its products and budgets
expenses based on forecasts of sales, which are difficult to predict. The
Company's manufacturing procedures are designed to assure rapid response to
customer demand, but may, in certain circumstances, create risk of excess or
inadequate inventory if orders do not match forecast. Moreover, shortages or
delays in the supply of manufacturing components at shipments at acceptable
prices could adversely affect the Company's ability to meet scheduled product
shipments in any particular quarter, which could materially affect the Company's
operating results. Because a substantial portion of customer orders are filled
within the fiscal quarter of receipt, and because of the ability of customers to
revise or cancel orders and


                                       15
<PAGE>   16


change delivery schedules without significant penalty, quarter to quarter
revenues and, to a greater degree, net earnings, may be subject to greater
variability and less predictability.

TECHNOLOGICAL CHANGES

The markets for the Company's products are characterized by continuous
technological change, evolving industry standards and frequent product
introductions. Such changes in the market may adversely affect the Company's
ability to sell its products. The Company's ability to anticipate changes in
technology, industry standards and to develop and introduce new and enhanced
products on a timely basis that are successful in the market, will be
significant factors in the Company's competitive position and its prospects for
growth. Moreover, if technologies or standards supported by the Company's
products or carrier service offerings based on the Company's products become
obsolete or fail to gain widespread commercial acceptance, the Company's
business may be adversely affected. As a result, Management believes that
significant expenditures for research and development will be required in the
future. Research and development project schedules for high technology products
are inherently difficult to predict and there can be no assurance that the
Company will achieve its expected initial shipment dates for products in
development. Because timely availability of new and enhanced products is
critical to the success of the Company, delays in availability of these
products, or lack of market acceptance of such products, could adversely affect
the Company.

MARKET PRICE VOLATILITY OF COMMON SHARES

The Company's common shares have been subject to substantial market price
volatility, some of which has occurred when there have been variations between
the Company's actual or anticipated financial results and the expectations of
that of the financial community and in the aftermath of public announcements by
the Company and its competitors. Further, the stock market has experienced
extreme price and volume fluctuations from time to time which have affected the
market price of many technology companies in particular and which have often
been unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic conditions, may adversely
affect the market price of the Company's common shares. The Company's shares are
currently quoted on the NASDAQ OTC Bulletin Board.

OTHER FACTORS

The Company further cautions that the factors referred to above and those
referred to as part of particular forward looking statements may not be
exhaustive, and that new risk factors emerge from time to time in its rapidly
changing business. Further, the Company's independent auditors have included a
paragraph in their opinion which indicates that, based on recent operating
losses, along with existing working capital and accumulated deficits, there is
substantial doubt about the Company's ability to continue as a going concern.
The Company does not undertake to update any forward looking statements it may
make or has made on its behalf to reflect changes it its expectations or
assumptions or the risks and uncertainties referred to.


                                       16
<PAGE>   17


ITEM 6. SELECTED FINANCIAL DATA

The following sets forth certain selected financial data for the five fiscal
years in the period ended April 30, 2000. The statement of operations data for
the fiscal years ended April 30, 2000, 1999 and 1998 and the balance sheet data
at April 30, 2000 and 1999 are derived from and are qualified by reference to
the financial statements of the Company audited by BDO Seidman, LLP, the
Company's independent certified public accountants, whose opinion contains an
explanatory paragraph related to substantial doubt about the Company's ability
to continue as a going concern and is included elsewhere, herein. The statement
of operations data for the fiscal years ended April 30, 1997 and 1996 and the
balance sheet data at April 30, 1998, 1997 and 1996 are derived from financial
statements of the Company also audited by BDO Seidman, LLP, but not included in
this Annual Report. The financial data should be read in conjunction with the
financial statements and related notes and other financial information and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere in this Annual Report.


<TABLE>
<CAPTION>
                                                                       FISCAL YEAR ENDED APRIL 30,
                                                     ----------------------------------------------------------------
                                                       2000          1999          1998          1997          1996
                                                       ----          ----          ----          ----          ----
STATEMENT OF OPERATIONS DATA:                                         ($000's except per share data)
<S>                                                  <C>           <C>           <C>           <C>           <C>
     Total revenues                                  $  6,415      $  4,653      $  8,907      $ 11,163      $ 10,009

     Operating costs and expenses
       Costs of goods sold                              4,074         2,679         5,441         4,737         5,047
       Other operating expenses                         9,043         7,610        11,684         7,202         5,722
                                                     --------      --------      --------      --------      --------

     Total operating costs and expenses                13,117        10,289        17,125        11,939        10,769
     Operating loss                                    (6,702)       (5,636)       (8,218)         (776)         (760)

     Other income (expense), net                         (115)         (104)         (871)          181           129
     Reorganizational items, net                           --          (643)           --            --            --

     Loss before extraordinary item                    (6,817)       (6,383)       (9,089)         (595)         (631)

     Extraordinary gain                                    --           833            --            --            --
                                                     --------      --------      --------      --------      --------

     Net loss                                        $ (6,817)     $ (5,550)     $ (9,089)     $   (595)     $   (631)
                                                     ========      ========      ========      ========      ========

     Basic and diluted loss before extraordinary
       item                                          $  (0.35)     $  (0.49)     $  (0.87)     $  (0.06)     $  (0.07)

     Extraordinary item                                    --          0.06            --            --            --

     Basic and diluted loss per share                $  (0.35)     $  (0.43)     $  (0.87)     $  (0.06)     $  (0.07)

     Weighted average number of shares
     outstanding during each period                  $ 19,277      $ 12,917      $ 10,391      $  9,961      $  9,522

BALANCE SHEET DATA:

     Total assets                                    $ 21,199      $  5,581      $  9,226      $ 12,622      $  9,034
     Total long term liabilities                     $    771      $  2,690      $  1,205      $  3,000      $     --
     Shareholders' equity                            $ 13,770      $  1,036      $  3,246      $  7,759      $  6,880
</TABLE>


                                       17
<PAGE>   18


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED IN THIS ANNUAL REPORT. IN
ADDITION, THE COMPANY DESIRES TO TAKE ADVANTAGE OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SPECIFICALLY, THE
COMPANY WISHES TO ALERT READERS THAT THE FACTORS SET FORTH IN ITEM 5, "MARKET
FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS - ADDITIONAL
FACTORS THAT MAY AFFECT OUR BUSINESS AND FUTURE RESULTS", AS WELL AS OTHER
FACTORS, IN THE PAST HAVE AFFECTED AND IN THE FUTURE COULD AFFECT THE COMPANY'S
ACTUAL RESULTS, AND COULD CAUSE THE COMPANY'S RESULTS FOR FUTURE QUARTERS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE BY
OR ON BEHALF OF THE COMPANY.

PETITION FOR REORGANIZATION UNDER CHAPTER 11

On June 2, 1998, the Company filed a voluntary petition for reorganization under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the Eastern District of Virginia. On March 30, 1999, the Company's Plan of
Reorganization (the "Plan") was approved by the Bankruptcy Court and the Company
emerged from Chapter 11. The Plan provided for cash and debenture payments equal
to 100% of each allowed claim plus interest. The positions of all common
shareholders were preserved. Confirmation of the Company's Plan resulted in an
extraordinary gain of $833,149 in the fiscal year ended April 30, 1999. On
November 18, 1999, a motion for final decree was granted and the case was
closed.

PLAN OF REORGANIZATION

Pursuant to the Plan, Class 1 creditors representing existing holders of
convertible debentures, were required to convert their debt to equity on or
before October 12, 1999. Claims of unsecured creditors, below $1,000, were
repaid in cash on or before April 30, 1999. Claims of unsecured creditors
greater than $1,000 were satisfied by cash payments totaling 25% of the allowed
claim. The Company issued debentures to these unsecured creditors for the
remaining 75% of their allowed claims. To generate the cash requirement of the
Plan, the Company raised $1,000,000 through a private placement offering of
securities to a group of Company employees, insiders and accredited investors.

The Company issued $2,490,357 in convertible debentures in satisfaction of the
remaining 75% of each claim allowed in its Plan. The debentures earn interest at
a rate of 7.5% per annum payable in the form of common stock in the Company at
time of conversion. The debentures are convertible at the average of the closing
price of the Company's common stock for the ten consecutive trading days ending
on the trading day immediately preceding the date of conversion. The Company may
execute a cash prepayment of the debenture at any time. The debentures mature on
April 12, 2003. Any debentures not converted by this date will automatically
convert into common shares of the Company. At April 30, 2000, $767,602 in
convertible debentures were outstanding.

The Company is in compliance with all of the terms and conditions of its Plan.

FUTURE PROSPECTS

On March 31, 2000, the Company acquired substantially all of the assets and
assumed certain liabilities of Cronus Technology, Inc. for approximately
$9,600,000, plus the assumption of liabilities of approximately $6,700,000
subject to adjustment as set forth in the agreement. Approximately $9,300,000 of
the purchase price was funded through the issuance of shares of the Company's
common stock and approximately $300,000 was paid in cash. The acquisition was
accounted for as a purchase and, accordingly, the acquired assets and
liabilities were recorded at their estimated fair market values at the date of
acquisition. The Company recorded goodwill of approximately $12,000,000 related
to this transaction. The goodwill is being amortized on a straight line basis
over four years.

The acquisition of Cronus allows FastComm to offer signaling gateways that
bridge the gap between incompatible communications networks. These gateways
enable seamless interoperability between in-band and out-of-band networks, or
between different types of out-of-band networks. Cronus has existing contracts
and relationships with several large multi national customers such as Nortel,
Lucent and Siemens. The Company believes that it is well positioned to
capitalize on increasing international cross border traffic and the growing
voice over packet market. The Company believes that through additional marketing
and development efforts, Cronus product line sales will increase considerably
from that of the $9 million recorded during the twelve months ended March 31,
2000.


                                       18
<PAGE>   19


The technologies acquired as part of this acquisition are complementary and
enable the Company to migrate into new marketplaces such as the softswitch.
Softswitch is an alternative to circuit based switching technology. Management
believes that softswitch will force equipment makers to require more signaling
gateway products. The Company believes that it will have the opportunity to
complement softswitch solutions offered by companies currently in this
marketplace as well as move into the softswitch market itself.

In fiscal year 2000, the Company finalized the development of its GlobalStack
and MetroLan product lines, all of which have voice, data and video
capabilities. The Company has added new features to the Quick product that
qualify this product for a larger and enhanced distribution channel. The Company
believes that the GlobalStack and MetroLan products have a strong international
application. Accordingly, the Company has enhanced its international selling
presence in Brazil, Australia, the Pacific Rim, Colombia, Venezuela and Central
America. During its fiscal year ended April 30, 2000, the Company executed non
exclusive distribution agreements with resellers in Argentina, Bolivia, Bosnia,
China, Costa Rica, El Salvador, Guatemala, Honduras, Hong Kong, Korea, Mexico,
Nicaragua, Peru, Suriname, Tobago and Trinidad.

Initial shipment of the ChanlComm(R) 7790 product for field trial purposes
commenced in the fourth quarter oF fiscal 2000. The ChanlComm product group was
developed by KG Data Systems, Inc. which the Company acquired on March 31, 1999.
The Company anticipates that sales of the ChanlComm(R) 7790 product will begin
generatinG significant revenues commencing mid year of its fiscal year ended
April 30, 2001. The Company recently signed a three year agreement with Sumisho
Electronics to supply the Japanese Data Center market with ChanlComm 7790
product. The Company believes that this agreement represents a major milestone
for this product line. In late July 2000, subsequent to year end, the 7790
product was released to production and commercial customer shipments commenced.

The Company anticipates that it will require additional funding to meet future
working capital needs and research and development expenses. It is anticipated
that such funding will be generated by way of additional placements of equity,
through research and development arrangements funded by third parties, by
investments by strategic partners and through the exercise of in the money
common stock warrants and options. Subsequent to April 30, 2000, but prior to
the issuance of this report, the Company raised an additional $1,170,000 through
a private placement offering of securities to a group of accredited investors.
The Company has outstanding warrants that, if exercised, could generate a
maximum of $7,293,000 in additional cash for the Company. The Company can give
no assurance as to whether any warrants will be exercised, nor to the amount of
cash that will be generated, if any of these securities are exercised. (See Item
7. Liquidity and Capital Resources)

The Company can give no assurance as to whether it will be able to conclude such
financing arrangements, or that, if concluded, they will be on terms favorable
to the Company.

There can be no assurance that the required increased sales and improved
operating efficiencies necessary to return to profitability will materialize.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As explained in the succeeding
paragraphs, the Company has sustained recurring operating losses and cash flow
deficits in fiscal years 2000, 1999 and 1998. In addition, the Company must
obtain funds from outside sources in fiscal year 2001 to successfully implement
its business plan. Presently, the Company has no firm commitments from outside
sources to provide these funds. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not contain any adjustments that might result from the outcome of these
uncertainties.


                                       19
<PAGE>   20


RESULTS OF OPERATIONS

The following table sets forth, for the fiscal years indicated, the percentage
of revenues represented by certain items in the Company's consolidated
statements of income.

<TABLE>
<CAPTION>
                                                  FISCAL YEAR ENDED APRIL 30,
STATEMENT OF OPERATIONS DATA:                     2000       1999       1998
                                                  ----       ----       ----
<S>                                               <C>        <C>        <C>
     Total revenues                                100%       100%       100%

     Operating costs and expenses
          Costs of goods sold                       64%        58%        61%
          Selling, general and administrative       78%       102%        86%
          Research and development                  46%        51%        25%
          Reserve for litigation settlement         --         --         13%
          Depreciation and amortization             16%        10%         7%
                                                  ----       ----       ----

                                                   204%       221%       192%
                                                  ----       ----       ----

     Operating loss                               (104)%     (121)%      (92)%

     Other income (expense), net                    (2)%       (2)%      (10)%

     Reorganizational items                         --        (14)%       --
                                                  ----       ----       ----

     Loss before extraordinary gain               (106)%     (137)%     (102)%

     Extraordinary gain                             --       18.00%       --
                                                  ----       ----       ----

     Net loss                                     (106)%     (119)%     (102)%
                                                  ====       ====       ====
</TABLE>

FISCAL 2000 COMPARED TO FISCAL 1999

Total revenues increased from $4,653,000 to $6,415,000 or by 38% during fiscal
2000 as compared to fiscal 1999. The $1,762,000 increase was primarily
attributable to $1,218,000 associated with the introduction of the GlobalStack
and MetroLan product lines and $856,000 in sales of the Cronus product line. The
Company acquired Cronus effective March 31, 2000 and accordingly included one
month of Cronus sales in fiscal 2000. The Company did not make any significant
price adjustments during the current fiscal year.

The Company believes its future growth will be achieved through the sale of its
voice and date integrated access products, the ChanlComm(R) product line and its
signaling gateway products. During the fiscal year ended ApriL 30, 2000, three
customers accounted for 18%, 15% and 12% of total sales.

A significant portion of the Company's sales are derived from products shipped
against firm purchase orders received in each fiscal quarter and from products
shipped against firm purchase orders released in that quarter. Unforeseen delays
in product deliveries or the closing of sales, introduction of new products by
the Company or its competitors, fluctuations in customer capital expenditures or
other conditions affecting the networking industry or the economy during any
fiscal quarter could cause quarterly revenue and net earnings to vary greatly.

Gross margins, as a percentage of total revenues, decreased from 42% to 36%
during fiscal 2000 as compared to fiscal 1999. During fiscal 2000, the Company
wrote off, against its existing reserve, inventory made obsolete by new product
developments, the acquisition of Cronus and a change in overall product focus.
Accordingly, after the significant inventory writedown, the Company also
increased its reserve for inventory obsolescence by $815,000. The increase in
the reserve reduced gross margin by approximately 13%. The Company's gross
margin was positively impacted by the introduction of the GlobalStack and
MetroLan product lines which produce gross margins significantly greater than
products offered by the Company in the previous fiscal year. As of April 30,
2000, the Company has recorded a $600,000 reserve for inventory obsolescence,
which management believes is adequate.


                                       20
<PAGE>   21


Selling, general and administrative expenses increased from $4,747,000 in fiscal
1999 to $4,984,000 in fiscal 2000. This 5% increase is primarily attributable to
expenses incurred by Cronus in April 2000 ($429,000) and increased marketing
costs ($246,000) offset by reduced employee related costs ($192,000) and reduced
equipment rental expense resulting from terminated and renegotiated leases
($210,000).

Research and development expenditures consist primarily of hardware and software
engineering, personnel expenses, subcontracting costs and, to a lesser degree,
equipment and facilities. Research and development expenses increased from
$2,388,000 in fiscal 1999 to $2,966,000 in fiscal 2000. This 24% increase is
primarily attributable to one months worth of expenses incurred by Cronus
($278,000) and increased labor and material costs associated with new product
development and new product prototypes associated with the GlobalStack, MetroLan
and ChanlComm product lines. The markets for the Company's products are
characterized by continuous technological change. Management believes that
significant expenditures for research and development will continue to be
required.

Depreciation and amortization expenses increased from $475,000 in fiscal 1999 to
$1,093,000 in fiscal 2000. This increase is primarily attributable to one months
amortization of goodwill associated with the Cronus acquisition ($323,000); the
full year effect of the amortization of goodwill associated with the acquisition
of KG Data and to a lesser degree, depreciation associated with Cronus fixed
assets and other recent capital expenditures.

FISCAL 1999 COMPARED TO FISCAL 1998

Total revenues decreased from $8,907,000 to $4,653,000 or by 48% during fiscal
1999 as compared to fiscal 1998. The $4,254,000 decrease was primarily
attributable to decreased unit sales volumes of data and voice based frame relay
products. The Company did not make any significant price adjustments during this
time period. Data based frame relay product sales decreased from $3,820,000 to
$1,398,000 or by 63% during fiscal 1999 as compared to fiscal 1998. Voice based
frame relay product sales decreased from $2,493,000 to $542,000 or by 78% during
fiscal 1999 as compared to fiscal 1998. Sales generated by the Company's Quick
product decreased $525,000 to $1,748,000 when compared with that of the previous
fiscal year. The decline in sales was offset by a $382,000 increase in the sale
of data compression products. The reduced sales of frame relay products is
primarily attributable to lower sales to the Company's major reseller.

During the fiscal year ended April 30, 1999, one customer accounted for 28% of
total sales.

Gross margins, as a percentage of total revenues, increased from 39% to 42%
during fiscal 1999 as compared to fiscal 1998. The increase in gross margin is
primarily attributable to a $1.1 million increase in the Company's reserve for
inventory obsolescence that was recorded in fiscal 1998 compared with the
$80,000 increase recorded in fiscal 1999. Further, sales of the Company's Quick
product line as a percentage of overall sales increased during the current
fiscal year. Gross margins on the Quick product line are greater than that of
the Company's other product lines. During the current fiscal year, the Company
increased its reserve for inventory obsolescence by $80,000 to $1,450,000.

Selling, general and administrative expenses decreased from $7,622,000 in fiscal
1998 to $4,747,000 in fiscal 1999. This 38% decrease in expense is primarily
attributable to reduced advertising and promotion costs ($480,000); reduced
legal and professional fees ($1,032,000); reduced salary and related costs
associated with a decline in headcount ($351,000); reduced travel costs
($147,000); reduced office and occupancy costs including those associated with
the Company's Australia sales office ($224,000) and a decline in bad debt
expense ($417,000).

Research and development expenditures consist primarily of hardware and software
engineering, personnel expenses, subcontracting costs and, to a lesser degree,
equipment and facilities. Research and development expenses increased from
$2,255,000 in fiscal 1998 to $2,388,000 in the current fiscal year. This 6%
increase is primarily attributable to increased labor and material costs
associated with new product development and new product prototypes associated
with the ChanlComm product line.

Depreciation and amortization expenses decreased from $611,000 in fiscal 1998 to
$475,000 in fiscal 1999. The Company's autodialer patent was written off in the
previous fiscal year.

During the fiscal year ended April 30,1999, the Company recorded $643,000 in net
expenses associated with its reorganization. Such costs include legal and
professional fees totaling $663,000 offset by $20,000 in imputed interest earned
on accumulated cash from the Chapter 11 proceeding. Implementing the Company's
Plan of Reorganization resulted in an extraordinary gain of $833,000.


                                       21
<PAGE>   22


FOURTH QUARTER ADJUSTMENTS

During the fourth quarter ending April 30, 1998, the Company recorded provisions
for obsolete inventory of $570,000 and a valuation allowance related to a note
receivable of $273,600 all of which had the effect of increasing the operating
loss and net loss by $843,600 or $.08 per share.


LIQUIDITY AND CAPITAL RESOURCES

During fiscal year 2000, the Company used approximately $4,568,000 in cash to
fund its operating activities. This amount includes $6,236,000 required to fund
the net loss, after adjusting for non-cash expenses (consisting principally of
depreciation, amortization, inventory writeoffs and adjustments to inventory
valuation accounts) and $805,000 required by increases in accounts receivable.
Inventory declined by $2,216,000, which provided liquidity.

Accounts receivable increased during the current fiscal year due to increased
sales and better collection efforts. The Company has a $275,000 allowance for
doubtful accounts at April 30, 2000, which management believes is adequate.

Inventory levels decreased $2,216,000 during fiscal year 2000. The Company wrote
off, against its existing reserve, inventory made obsolete by new product
developments, the acquisition of Cronus and a change in overall product focus.
The Company increased its reserve for inventory obsolescence by $815,000. The
Company has a $600,000 reserve for inventory obsolescence, which management
believes is adequate.

At April 30, 2000, the Company had $548,000 in unrestricted cash, a working
capital deficit of $264,000 and a current ratio of 1 to 1. Certain of the
Company's accounts receivable or inventories are collateralized under the
revolving line of credit and term loan agreement with LaSalle National Bank.
(See Item 7. Cash Requirements)

FISCAL 2000 COMPARED TO FISCAL 1999

Cash used in operating activities increased from $2,329,000 in fiscal 1999 to
$4,568,000 in fiscal 2000. The $2,329,000 increase in cash used in operating
activities is primarily attributable to the $1,518,000 increase in the net loss
for the year and by changes in working capital items in fiscal 2000 compared to
fiscal 1999. Such changes include a $3,311,000 increase in cash used to fund
accounts receivable, a $1,617,000 reduction in cash invested in inventory and
increases in other non cash expenses, primarily depreciation and amortization
accounts, asset valuation accounts.

Cash used by investing activities totaled $345,000 in fiscal 2000 as compared
$62,000 in fiscal 1999. The Company purchased $527,000 in fixed assets during
the current fiscal. This was partially offset by $182,000 assumed as part of the
Cronus acquisition.

Cash provided by financing activities totaled $5,370,000 during fiscal 2000. The
Company issued $1,087,000 in common stock during the fiscal year. Of this
amount, $152,000 remains in escrow as restricted cash. The Company received
$4,392,000 from the exercise of common stock warrants and $313,000 from the
exercise of stock options during the current fiscal year.

FISCAL 1999 COMPARED TO FISCAL 1998

Cash used in operating activities decreased from $4,395,000 in fiscal 1998 to
$2,329,000 in fiscal 1999. The $2,066,000 decrease in cash used in operating
activities is primarily attributable to the $3,540,000 decrease in the net loss
for the year offset by changes in working capital items in fiscal 1999 compared
to fiscal 1998. Such changes include a $2,708,000 reduction in cash used to fund
accounts receivable, a $1,930,000 reduction in cash invested in inventory offset
by a $1,471,000 increase in funds used to paydown current liability balances, a
fiscal 1998 $1,196,000 non cash reserve for litigation settlement and decreases
in other non cash expenses, primarily asset valuation accounts and non cash
discount and interest on convertible debentures.

Cash used by investing activities totaled $62,000 in fiscal 1999 as compared
$318,000 in fiscal 1998. The Company purchased $212,000 in fixed assets during
the fiscal year and received a $150,000 payment against an outstanding note
receivable.

Cash provided by financing activities totaled $1,269,000 during fiscal 1999. The
Company raised $1,000,000 as part of its reorganization. Of this amount,
$152,000 remains in escrow as restricted cash. The Company received $421,000
from the exercise of common stock warrants during the current fiscal year.


                                       22
<PAGE>   23


JULY 1999 PRIVATE PLACEMENT

During the quarter ended July 31, 1999, the Company raised an additional
$1,087,000 through a private placement of securities to a group of accredited
investors.

CONVERSION OF WARRANTS

On November 17, 1999 the Company initiated an accelerated warrant conversion
program designed to raise capital to finance working capital and product
expansion plans This program generated $3,049,000 in cash for the Company. On
February 7, 2000 the Company called for redemption certain callable warrants. In
connection with this redemption, the Company issued 333,000 common shares and
generated $500,000 in additional cash. On April 13, 2000 the Company initiated a
second accelerated warrant conversion program. Under this program, 82,330
warrants were converted into shares of common stock generating $95,000 in cash
for the Company. During the fiscal year ended April 30, 2000, the Company issued
an additional 705,754 shares of common stock related to other warrant
conversions generating an additional $748,000 in cash for the Company.

CONVERSION OF DEBENTURES

On January 13, 2000, the Company amended the terms of the Convertible Debentures
issued as part of its Plan of Reorganization. Under the terms and conditions of
this amendment, the conversion date of these debentures was accelerated from
April 12, 2000 to January 13, 2000. During the fiscal year ended April 30, 2000
$1,825,552 in debentures and accrued interest were converted into 513,249 shares
of common stock. Also during the current fiscal year, the remaining $224,684 in
debentures issued in a May 1997 private placement were converted into 274,911
shares of common stock.

CASH REQUIREMENTS

In fiscal 2001, the Company's cash commitments include minimum payments of
$499,000 under its operating lease arrangements. Management believes that
expenditures for research and development in fiscal 2001 will continue to be
significant. The Company anticipates additional capital spending for software,
computer and test equipment and furniture and fixtures in fiscal 2001. Where
possible, such capital requirements are expected to be met through lease
financing arrangements.

In connection with the acquisition of Cronus, the Company assumed liabilities
under a revolving line of credit and term loan agreement with LaSalle National
Bank. Under the revolving line of credit the Company could borrow up to the
lesser of $3,000,000 or 80% of eligible accounts receivable and 35% of eligible
inventory, as defined in the agreement. The revolving line of credit bears
interest at the bank's prime rate of interest plus 1% and was scheduled to
mature on May 1, 2001. Under the agreement, Cronus could issue letters of credit
up to $250,000 in the aggregate. There are no outstanding letters of credit as
of April 30, 2000. The term loan was payable in equal monthly principle payments
of $9,875, bears interest at the bank's prime rate of interest plus 1% and was
schedule to mature on May 1, 2001. In April 2000, the Company placed $250,000 in
escrow to further collateralize the revolving line of credit and term loan. In
July 2000, the bank informed the Company that the revolving line of credit and
term loan would mature on September 30, 2000. Accordingly, this debt has been
classified as a current liability. The Company expects to be able to refinance
this debt with another bank prior to the maturity date.

In connection with the acquisition of Cronus, the Company assumed short term
notes payable to individuals totaling $1,000,000. The notes are unsecured, bear
interest at 8.0% and mature on December 10, 2000.

The Company anticipates that it may require additional funding to meet future
expansion and research and development expenses. It is anticipated that such
funding will be generated by way of additional placements of equity, through
research and development arrangements funded by third parties, by investments by
strategic partners and through the exercise of in the money common stock
warrants and options. The Company can give no assurance as to whether it will be
able to conclude such financing arrangements, or that, if concluded, they will
be on terms favorable to the Company

JULY 2000 PRIVATE PLACEMENT

Subsequent to April 30, 2000, but prior to the issuance of this report, the
Company raised an additional $1,170,000 through a private placement offering of
securities to a group of accredited investors. Warrants to purchase common stock
associated with this offering are exercisable for a period of one year after the
closing date. These funds will be used for working capital purposes.

UNEXERCISED WARRANTS

The Company has warrants outstanding which, if exercised, could generate a
maximum of $7,293,000 in additional cash. The Company can give no assurance as
to whether any warrants will be exercised, nor to the amount of cash that will
be generated, if any of these securities are exercised.

Management believes that inflation did not have a material effect on operations
during the fiscal year ended April 30, 2000.


                                       23
<PAGE>   24


CREDIT TERMS

The Company extends credit to its customers. Accordingly the Company may have
significant risk in collecting accounts receivable from its customers. The
Company has credit policies and procedures that it uses to minimize exposure to
credit losses. The Company's collection personnel regularly contact customers
with receivable balances outstanding to expedite collection. If these collection
efforts are unsuccessful, the Company may discontinue product shipments until
the outstanding balance is paid.

In many instances, the Company requires that international sales be paid in
advance by wire transfer or confirmed letter of credit. This practice ensures
against bad debts while improving cash flow.

Certain Resellers may request a stock adjustment/rotation twice annually and a
stock update at any time. "Stock adjustment/rotation" and "stock update" are
agreements whereby FastComm permits a reseller, at FastComm's sole discretion,
to return already purchased but unused and still current products to FastComm.
Stock adjustments/rotations and stock updates, which require the approval of an
officer of FastComm, are granted for specific purposes:

o    Stock adjustment/rotation allows an exchange for other FastComm products of
     equal value. At the sole discretion of FastComm, stock adjustments may be
     limited to 10% or 20% of the value of product ordered and accepted and paid
     for by the reseller during the prior six-month period.

o    Stock updates may be approved for either warranty revalidation and/or
     software revision level changes on products that are then returned to the
     dealer. At FastComm's sole discretion, returned products may be exchanged
     for the same types of equipment from inventory.

FastComm, at its sole discretion, may charge a reseller a "restocking charge" of
up to 20% to execute a stock adjustment or stock update. Stock
adjustment/rotation and stock update do not permit distributors to return
purchased merchandise for a refund.

The Company's practices concerning stock adjustment/rotation and stock updates
are believed to be consistent with those of the communications manufacturing
industry, based on management's experiences and its analysis of similar
companies.

Normally, payment in full is due within thirty days from date of shipment to the
reseller. The Company offers extended payment terms in certain situations. The
Company also offers prompt payment discounts. Although normal payment terms are
net 30 days from date of shipment, as a practical matter, the Company normally
receives payments on accounts receivable beyond thirty (30) days, even from its
most credit-worthy customers. Management does not believe that its credit and
collection history is substantially different from other companies in the
data-communications industry, based on management's experiences with similar
companies.

With the exception of the stock adjustment/rotation policies as discussed above
and product warranty, the Company is not contractually obligated to accept
returned merchandise.

The Company's reserve for doubtful accounts totals $275,000, which management
believes is adequate.


RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments"
("SFAS 133"). SFAS 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. SFAS 133 requires that an
entity recognize all derivatives as either assets or liabilities and measure
those instruments at fair market value. Under certain circumstances, a portion
of the derivative's gain or loss is initially reported as a component of other
comprehensive income and subsequently reclassified into income when the
transaction affects earnings. For a derivative not designated as a hedging
instrument, the gain or loss is recognized in income in the period of change.
Presently, the Company does not use derivative instruments either in hedging
activities or as investments. Accordingly, the Company believes that adoption of
SFAS 133 in fiscal 2001 will have no impact on its financial position or results
of operations.


                                       24
<PAGE>   25


ITEM 7A. MARKET RISK

In the normal course of business, operations of the Company may be exposed to
fluctuations in currency values and interest rates. These fluctuations can vary
the costs of financing, investing, and operating transactions. Because the
Company has only fixed rate long term convertible debentures and no foreign
currency transactions, there is no material impact on earnings of fluctuations
in interest and currency exchange rates.


                                       25
<PAGE>   26


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements and financial statement schedules are filed
as part of this Report:

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
Report of Independent Certified Public Accountants                                                              F-1

Balance Sheets at April 30, 2000 and 1999                                                                       F-2

Statements of Operations for the Years Ended April 30, 2000, 1999 and 1998                                      F-4

Statements of Stockholders' Equity for the Years Ended April 30, 2000, 1999 and 1998                            F-6

Statements of Cash Flows for the Years Ended April 30, 2000, 1999 and 1998                                      F-7

Summary of Accounting Policies                                                                                  F-9

Notes to Financial Statements                                                                                  F-13

Report of Independent Certified Public Accountants on Financial Statement Schedule                             F-31

Valuation and Qualifying Accounts (Schedule II)                                                                F-32
</TABLE>


                                       26
<PAGE>   27
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
FASTCOMM COMMUNICATIONS CORPORATION

We have audited the accompanying balance sheets of FastComm Communications
Corporation as of April 30, 2000 and 1999, and the related statements of
operations, stockholders' equity, and cash flows for each of the three years in
the period ended April 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FASTCOMM COMMUNICATIONS
CORPORATION at April 30, 2000 and 1999, and the results of its operations and
its cash flows for each of the three years in the period ended April 30, 2000 in
conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has sustained significant
operating losses and cash flow deficits in 2000, 1999 and 1998. In addition, the
Company must obtain funds from outside sources in 2001 to successfully implement
its business plan. Presently, the Company has no firm commitments from outside
sources to provide these funds. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are described in Note 1. The financial statements do not
contain any adjustments that might result from the outcome of these
uncertainties.

                                                BDO Seidman, LLP

Washington, D.C.
July 14, 2000

                                                                               1

<PAGE>   28


                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                                  BALANCE SHEETS

<TABLE>
<CAPTION>
 April 30,                                                                        2000                     1999
--------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                     <C>
ASSETS

CURRENT
  Cash and cash equivalents (including temporary investments
    of $430,000 and $133,000)                                                $   548,136            $     90,727
  Restricted cash (Notes 5 and 8)                                                321,723                 152,367
  Accounts receivable, net (Notes 5 and 8)                                     2,865,727                 617,492
  Receivable from employees                                                       84,000                  30,000
  Inventories, net (Notes 4 and 8)                                             2,405,747               2,658,788
  Prepaid expenses and other current assets                                      168,131                 228,120
--------------------------------------------------------------------------------------------------------------------

TOTAL CURRENT ASSETS                                                           6,393,464               3,777,494
--------------------------------------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT, at cost, less accumulated
  depreciation and amortization (Note 6)                                       1,690,011                 631,959
--------------------------------------------------------------------------------------------------------------------

OTHER
  Goodwill (Note 3)                                                           12,547,854               1,109,838
  Deferred investment advisory fees (Note 9)                                     480,688                       -
  Deposits                                                                        87,215                  49,096
  Deferred financing costs                                                             -                  12,671
--------------------------------------------------------------------------------------------------------------------

TOTAL OTHER ASSETS                                                            13,115,757               1,171,605
--------------------------------------------------------------------------------------------------------------------



                                                                             $21,199,232              $5,581,058
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.

                                                                               2

<PAGE>   29



                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                                  BALANCE SHEETS

<TABLE>
<CAPTION>
April 30,                                                                           2000                     1999
--------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                      <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Current portion of notes payable (Note 8)                              $     1,000,000         $             -
  Revolving line of credit and term loan (Note 8)                              1,268,319                       -
  Current portion of capital lease obligations (Note 8)                           11,281                       -
  Accounts payable                                                             2,583,161               1,080,713
  Accrued compensation                                                           363,109                 246,615
  Deferred revenue                                                               322,801                       -
  Other current liabilities (Note 7)                                           1,109,202                 527,342
--------------------------------------------------------------------------------------------------------------------

TOTAL CURRENT LIABILITIES                                                      6,657,873               1,854,670
--------------------------------------------------------------------------------------------------------------------

Convertible debentures (Notes 8 and 9)                                           767,602               2,690,357
Capital lease obligations (Note 8)                                                 3,543                       -
--------------------------------------------------------------------------------------------------------------------

TOTAL LONG TERM DEBT                                                             771,145               2,690,357
--------------------------------------------------------------------------------------------------------------------

TOTAL LIABILITIES                                                              7,429,018               4,545,027
--------------------------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES  (Note 13)

STOCKHOLDERS' EQUITY (Notes 3, 9 and 10)
  Common stock, $.01 par - 50,000,000 shares authorized;
    25,578,472 and 16,142,974 shares issued and outstanding                      255,784                 161,429
  Additional paid-in capital                                                  43,391,257              23,934,667
  Accumulated deficit                                                        (29,876,827)            (23,060,065)
--------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                    13,770,214               1,036,031
--------------------------------------------------------------------------------------------------------------------

                                                                             $21,199,232              $5,581,058
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.

                                                                               3

<PAGE>   30
                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                        STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
 Year ended April 30,                                                 2000               1999                1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                <C>                 <C>
REVENUES (Note 12)
  Product sales                                           $      6,402,255          4,091,843          $8,672,150
  Product sales to related parties                                       -                  -              13,335
  Service revenue                                                   12,662            561,462             221,185
--------------------------------------------------------------------------------------------------------------------

TOTAL REVENUES                                                   6,414,917          4,653,305           8,906,670
--------------------------------------------------------------------------------------------------------------------

OPERATING COSTS AND EXPENSES
  Cost of goods sold                                             4,074,058          2,679,255           5,440,991
  Selling, general and administrative                            4,984,334          4,747,003           7,622,394
  Research and development                                       2,966,012          2,387,904           2,255,097
  Provision for litigation settlement (Note 13)                          -                  -           1,195,560
  Depreciation and amortization                                  1,092,896            475,223             611,078
--------------------------------------------------------------------------------------------------------------------

TOTAL OPERATING COSTS AND EXPENSES                              13,117,300         10,289,385          17,125,120
--------------------------------------------------------------------------------------------------------------------

OPERATING LOSS                                                  (6,702,383)        (5,636,080)         (8,218,450)
--------------------------------------------------------------------------------------------------------------------

OTHER INCOME (EXPENSE)
  Other income (expense)                                            22,691             (7,635)            (82,692)
  Interest income                                                   54,860              8,950             174,120
  Interest expense                                                (191,930)          (104,894)           (962,475)
--------------------------------------------------------------------------------------------------------------------

TOTAL OTHER INCOME (EXPENSE)                                      (114,379)          (103,579)           (871,047)
--------------------------------------------------------------------------------------------------------------------

LOSS BEFORE REORGANIZATIONAL ITEMS AND
  EXTRAORDINARY ITEM                                            (6,816,762)        (5,739,659)         (9,089,497)

REORGANIZATIONAL ITEMS
  Professional fees                                                      -            662,888                   -
  Interest earned on accumulated cash resulting from
    Chapter 11 proceeding                                                -            (19,847)                  -
--------------------------------------------------------------------------------------------------------------------

TOTAL REORGANIZATIONAL ITEMS                                             -            643,041                   -
--------------------------------------------------------------------------------------------------------------------

LOSS BEFORE EXTRAORDINARY ITEM                                  (6,816,762)        (6,382,700)         (9,089,497)

EXTRAORDINARY GAIN (Note 2)                                              -            833,149                   -
--------------------------------------------------------------------------------------------------------------------

NET LOSS                                                  $     (6,816,762)  $     (5,549,551)   $     (9,089,497)
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.

                                                                               4

<PAGE>   31

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                        STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
 Year ended April 30,                                                 2000               1999                1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                <C>                 <C>
Basic and diluted loss before extraordinary
  item                                                    $         (0.35)   $         (0.49)    $         (0.87)

Extraordinary gain                                                      -                .06                -
--------------------------------------------------------------------------------------------------------------------

Basic and diluted loss per common share                   $         (0.35)   $         (0.43)    $         (0.87)
====================================================================================================================

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING DURING EACH YEAR                                  19,277,293        12,917,125          10,390,552
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.

                                                                               5

<PAGE>   32


                                             FASTCOMM COMMUNICATIONS CORPORATION

                                              STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
Year ended April 30, 2000, 1999 and 1998
---------------------------------------------------------------------------------------------------------------------
                                                      Common Stock
                                               ------------------------   Additional
                                                                   Par       Paid-in    Accumulated
                                                     Shares      Value       Capital        Deficit           TOTAL
---------------------------------------------------------------------------------------------------------------------
<S>                                             <C>           <C>        <C>           <C>              <C>
BALANCE, April 30,  1997                         10,038,022    100,380    16,079,355     (8,421,017)      7,758,718

  Shares issued for stock options                     3,499         35        18,042              -          18,077

  Shares issued on conversion of debentures       1,997,232     19,973     3,926,400              -       3,946,373

  Recognition of discount on debentures                   -          -       550,000              -         550,000

  Shares issued for compensation                     10,000        100        62,400              -          62,500

  Net loss                                                -          -             -     (9,089,497)     (9,089,497)
---------------------------------------------------------------------------------------------------------------------

BALANCE, April 30, 1998                          12,048,753    120,488    20,636,197    (17,510,514)      3,246,171

  Shares issued on conversion of debentures       1,652,717     16,527     1,056,783              -       1,073,310

  Shares issued for acquisition of
    KG Data Systems, Inc.                           719,149      7,191       837,809              -         845,000

  Shares issued on exercise of warrants             389,022      3,890       417,211              -         421,101

  Proceeds from sale of stock                     1,333,333     13,333       986,667              -       1,000,000

  Net loss                                                -          -             -     (5,549,551)     (5,549,551)
---------------------------------------------------------------------------------------------------------------------

BALANCE, April 30, 1999                          16,142,974    161,429    23,934,667    (23,060,065)      1,036,031

  Shares issued on conversion of debentures         788,160      7,882     2,042,354              -       2,050,236

  Shares issued for acquisition of
    Cronus Technology, Inc.                       2,944,988     29,450     9,245,682              -       9,275,132

  Shares issued on exercise of stock options        182,238      1,822       310,889              -         312,711

  Shares issued on settlement of notes payable      728,063      7,281     1,855,861              -       1,863,142

  Warrants issued to nonemployees                         -          -       570,817              -         570,817

  Shares issued on exercise of warrants           3,682,009     36,820     4,355,364              -       4,392,184

  Proceeds from sale of stock                     1,110,040     11,100     1,075,623              -       1,086,723

  Net loss                                                -          -             -     (6,816,762)     (6,816,762)
---------------------------------------------------------------------------------------------------------------------

BALANCE, April 30, 2000                          25,578,472   $255,784   $43,391,257   $(29,876,827)    $13,770,214
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.

                                                                               6
<PAGE>   33


                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                        STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
Year ended April 30,                                                  2000              1999              1998
------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                     <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                               $     (6,816,762)      $(5,549,551)      $(9,089,497)
   ADJUSTMENTS TO RECONCILE NET LOSS
     TO CASH USED IN OPERATING ACTIVITIES
       Depreciation and amortization                             1,092,896           475,223           611,078
       Extraordinary gain                                                -          (833,149)                -
       Compensation expense associated with
         stock options and warrants                                223,639            33,079            26,440
       Provision for doubtful accounts                               1,764            78,792           275,421
       Write off of accounts receivable                            (26,764)          (78,792)          (85,421)
       Provision for inventory obsolescence                        815,347            80,000         1,110,000
       Write off of inventory                                   (1,665,347)                -          (240,000)
       Amortization of imputed discount                                  -                 -               286
       Discount on convertible debentures                                -                 -           550,000
       Provision for doubtful note and interest
         receivable                                                      -                 -           316,225
       Amortization of deferred financing costs                     12,671            63,673           213,935
       Accrued interest converted to stock                         127,480            68,011           151,672
       Compensation expense on shares issued                             -                 -            62,500
       Loss on disposal of equipment                                     -             2,516                 -
   CHANGES IN ASSETS AND LIABILITIES,
     NET OF EFFECTS OF ACQUISITIONS
   (INCREASE) DECREASE IN ASSETS
     Accounts receivable                                          (750,812)        2,533,379          (168,434)
     Receivable from employees                                     (54,000)          (27,240)            1,135
     Inventory                                                   2,216,398           439,278        (1,090,698)
     Prepaid expense and other current assets                      131,936           146,494           (87,736)
     Deposits                                                      (12,078)           (7,729)          135,036
   INCREASE (DECREASE) IN LIABILITIES
     Accounts payable                                              102,879           880,849         1,150,171
     Provision for litigation settlement                                 -          (220,403)        1,195,560
     Accrued compensation                                         (340,424)          (97,672)           74,379
     Deferred revenue                                               (6,205)                -                 -
     Other current liabilities                                     379,813          (315,836)          493,512
------------------------------------------------------------------------------------------------------------------

   NET CASH USED IN OPERATING ACTIVITIES                        (4,567,569)       (2,329,078)       (4,394,436)
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                               7

<PAGE>   34
                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                        STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
 Year ended April 30,                                                    2000             1999              1998
-------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>              <C>                  <C>
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                (526,934)        (212,189)         (317,639)
   Payment received on notes receivable                                     -          150,000                 -
   Net cash from Cronus Technology acquisition                        181,718                -                 -
   Other                                                                    -              208                 -
-------------------------------------------------------------------------------------------------------------------

NET CASH USED IN INVESTING ACTIVITIES                                (345,216)         (61,981)         (317,639)
-------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net proceeds from issuance of common stock                       1,086,723        1,000,000                 -
   Proceeds from exercise of warrants                               4,392,184          421,101                 -
   Proceeds from exercise of stock options                            312,711                -            18,077
   Increase in restricted cash                                       (169,356)        (152,367)                -
   Principal payments on debt                                        (252,068)               -           (29,286)
   Proceeds from issuance of convertible debentures                         -                -         2,000,000
   Payment of deferred financing costs                                      -                -          (100,000)
-------------------------------------------------------------------------------------------------------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                           5,370,194        1,268,734         1,888,791
-------------------------------------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                                        457,409       (1,122,325)       (2,823,284)

CASH AND CASH EQUIVALENTS, beginning of year                           90,727        1,213,052         4,036,336
-------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, end of year                          $     548,136    $      90,727        $1,213,052
====================================================================================================================
</TABLE>
See accompanying summary of accounting policies and notes to financial
statements.

                                                                               8
<PAGE>   35

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                  SUMMARY OF ACCOUNTING POLICIES


ORGANIZATION             FastComm Communications Corporation (the "Company")
                         was incorporated in Virginia in May 1983.  The
                         Company designs, manufactures, and markets data
                         communications equipment for high-speed data
                         transmission over public and private telephone
                         networks. Management believes that the Company
                         operates in one business segment.

USE OF ESTIMATES         The preparation of financial statements in conformity
                         with generally accepted accounting principles
                         requires management to make estimates and assumptions
                         that affect the reported amounts of assets and
                         liabilities and the 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.  Certain estimates
                         used by management are particularly susceptible to
                         significant changes in the economic environment.
                         These include estimates of inventory obsolescence,
                         valuation allowances for trade receivables and
                         deferred tax assets and evaluation of the impairment
                         of goodwill.  Each of these estimates, as well as the
                         related amounts reported in the financial statements,
                         are sensitive to near term changes in the factors
                         used to determine them.  A significant change in any
                         one of those factors could result in the
                         determination of amounts different than those
                         reported in the financial statements.  Management
                         believes that as of April 30, 2000, the estimates
                         used in the financial statements are adequate based
                         on the information currently available.

RISKS AND                The Company's future operating results may be
UNCERTAINTIES            affected by a number of factors. Sales to three
                         customers were 45% of total revenue in 2000. Sales to
                         one customer were 28% and 32% of total revenue in
                         1999 and 1998, respectively. The risk to the Company
                         is that a loss of one or two customers could have a
                         significant negative impact on revenues and operating
                         results (see Note 12).

                         The Company sells primarily to domestic and foreign
                         dealers and distributors.  Generally sales are on
                         credit and no collateral is required, although the
                         Company reserves the right to have the products
                         returned in the event of default.  The Company
                         provides an allowance for estimated sales returns and
                         uncollectible accounts.  The Company's concentration
                         of sales to certain customers, discussed above,
                         exposes the Company to a relatively greater risk of
                         loss than would be the case with greater
                         diversification.


                                                                               9
<PAGE>   36

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                  SUMMARY OF ACCOUNTING POLICIES


                         The Company operates in a highly volatile industry
                         that is characterized by fierce industry-wide
                         competition resulting in aggressive pricing
                         practices, continually changing customer demand
                         patterns, growing competition from well-capitalized
                         high technology and consumer electronics companies,
                         and rapid technological development.  The Company's
                         operating results could be adversely affected should
                         the Company be unable to anticipate customer demand
                         accurately, to maintain short design cycles while
                         meeting evolving industry performance standards, to
                         manage its product transactions, inventory levels,
                         and manufacturing processes efficiently, to
                         distribute its product quickly in response to
                         customer demand, to differentiate its products from
                         those of its competitors, or to compete successfully
                         in the markets for its new products.

REVENUE                  Revenues from product sales are recognized at the
RECOGNITION              time of product shipment.  An allowance is provided
                         for estimated sales returns and uncollectible
                         accounts. Also, the Company establishes a reserve for
                         estimated warranty claims at the time of product
                         shipment.

INVENTORY                Production materials are valued using standard costs,
                         which approximate the first-in, first-out (FIFO)
                         method.  Work-in-process represents direct labor,
                         materials and overhead incurred on products not
                         delivered to date.  Finished goods are valued at the
                         lower of cost or market, cost being determined on the
                         specific identification method.

PROPERTY,                Property and equipment is recorded at cost and
EQUIPMENT AND            depreciated on a straight-line basis over the
DEPRECIATION             estimated useful life of the related assets
                         (generally five years).  Leasehold improvements are
                         amortized over the lesser of the lease term or the
                         useful life of the property.



                                                                              10
<PAGE>   37

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                  SUMMARY OF ACCOUNTING POLICIES



RESEARCH AND            All costs incurred to establish the technological
DEVELOPMENT COSTS       feasibility of products are considered research and
                        development costs which are charged to expense as
                        incurred.


GOODWILL                The Company has recorded goodwill based on the
                        difference between the cost and the fair value of
                        certain purchased assets and it is being amortized on
                        a straight-line basis over the estimated period of
                        benefit, which ranges from 4 to 7 years.  The Company
                        periodically evaluates the goodwill for possible
                        impairment.  The analysis consists of a comparison of
                        future projected cash flows to the carrying value of
                        the goodwill.  Any excess goodwill would be written
                        off due to impairment.


ASSET                   In accordance with Statement of Financial Accounting
IMPAIRMENT              Standards No. 121, Accounting for the Impairment of
                        Long-Lived Assets and for Long-Lived Assets to be
                        disposed of ("SFAS 121"), the Company periodically
                        evaluates the carrying value of long-lived assets
                        when events and circumstances warrant such a review.
                        The carrying value of a long-lived asset is
                        considered impaired when the anticipated undiscounted
                        cash flow from such asset is separately identifiable
                        and is less than the carrying value.  In that event,
                        a loss is recognized based on the amount by which the
                        carrying value exceeds the fair market value of the
                        long-lived asset.  Fair market value is determined
                        primarily using the anticipated cash flows discounted
                        at a rate commensurate with the risk involved.


INCOME TAXES            The Company accounts for income taxes in accordance
                        with Statement of Financial Accounting Standards No.
                        109, Accounting for Income Taxes ("SFAS 109").  Under
                        SFAS 109, deferred taxes are determined using the
                        liability method which requires the recognition of
                        deferred tax assets and liabilities based on
                        differences between financial statement and income
                        tax basis using presently enacted tax rates.



                                                                              11
<PAGE>   38


                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                  SUMMARY OF ACCOUNTING POLICIES


CASH AND                The Company considers all highly liquid investments
CASH EQUIVALENTS        with an original maturity of three months or less to
                        be cash equivalents.  The Company invests its excess
                        cash principally in overnight repurchase accounts and
                        short-term government securities.  The Company
                        maintains amounts in excess of the federal deposit
                        insurance limitation of $100,000 in its bank accounts.

COMPREHENSIVE           On May 1, 1998, the Company adopted Statement of
INCOME                  Financial Accounting Standards No. 130, "Reporting
                        Comprehensive Income". Comprehensive income as
                        defined includes all changes to equity except those
                        resulting from investments by owners and
                        distributions to owners. The Company has no items of
                        comprehensive income to report.

EARNINGS PER SHARE      Earnings per share is based on the weighted average
                        number of shares of common stock and dilutive common
                        stock equivalents outstanding.  Basic earnings per
                        share includes no dilution and is computed by
                        dividing income available to common shareholders by
                        the weighted average number of common shares
                        outstanding for the period.  Diluted earnings per
                        share reflects the potential dilution of securities
                        that could share in the earnings of an entity.  Basic
                        and diluted earnings per share are the same during
                        2000, 1999 and 1998 because the impact  of dilutive
                        securities is anti-dilutive.

RECENT                  In June 1998, the Financial Accounting Standards
ACCOUNTING              Board issued Statement of Financial Accounting
PRONOUNCEMENTS          Standards No. 133, "Accounting for Derivative
                        Instruments" ("SFAS 133"). SFAS 133 establishes
                        accounting and reporting standards for derivative
                        instruments and for hedging activities.  SFAS 133
                        requires that an entity recognize all derivatives as
                        either assets or liabilities and measure those
                        instruments at fair market value.  Under certain
                        circumstances, a portion of the derivative's gain or
                        loss is initially reported as a component of other
                        comprehensive income and subsequently reclassified
                        into income when the transaction affects earnings.
                        For a derivative not designated as a hedging
                        instrument, the gain or loss is recognized in income
                        in the period of change.  Presently, the Company does
                        not use derivative instruments either in hedging
                        activities or as investments.  Accordingly, the
                        Company believes that adoption of SFAS 133 in fiscal
                        2001 will have no impact on its financial position or
                        results of operations.

                                                                              12
<PAGE>   39


                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                   NOTES TO FINANCIAL STATEMENTS


1.    FUTURE            The accompanying financial statements have been
      PROSPECTS         prepared assuming that the Company will continue as a
                        going concern.  As explained below the Company has
                        sustained recurring operating losses and cash flow
                        deficits in 2000, 1999 and 1998. The Company
                        developed a business plan to increase revenue and
                        reduce operating losses. However, the Company must
                        obtain funds from outside sources in fiscal 2001 to
                        successfully implement its business plan. Presently,
                        the Company has no firm commitments from outside
                        sources to provide these funds. These factors raise
                        substantial doubt about the Company's ability to
                        continue in existence.  Management's plans in regard
                        to these matters are described in the succeeding
                        paragraphs.  The financial statements do not contain
                        any adjustments that might result from the outcome of
                        these uncertainties.

                        The Company plans to introduce new products to its
                        customers in fiscal 2001, some of which will be the
                        ChanlComm products formerly manufactured by KG Data
                        Systems, Inc. (see Note 3). Also, the Company expects
                        to generate significant revenue from shipments of
                        products manufactured by Cronus Technology, Inc.
                        which it acquired in March 2000 (see Note 3). In
                        addition, the Company is increasing its marketing
                        efforts in Latin America and Japan in hopes of
                        generating revenue. In addition, the Company expects
                        to control production costs by outsourcing
                        substantially all manufacturing activity.

                        While the Company is optimistic that it can execute
                        its revised business plan, there can be no assurance
                        that the increased sales necessary to return to
                        profitability will materialize or if they do, that
                        the Company will be able to raise sufficient cash to
                        fund the additional working capital requirements.

                        In July 2000, the Company raised $1,170,000 through a
                        private placement offering of securities to a group
                        of accredited investors.


2.    PLAN OF           On June 2, 1998, the Company filed a voluntary
      REORGANIZATION    petition for reorganization under Chapter 11 of the
                        United States Bankruptcy Code.    This filing was a
                        direct result of enforcement activities by a judgment
                        creditor (See Note 13).  The Company negotiated with
                        its creditors a consensual Plan of Reorganization
                        (the "Plan") and filed with the Court a Disclosure
                        Statement and Plan of Reorganization dated October
                        21, 1998 as modified on December 23, 1998, January 8,
                        1999 and finally February 16, 1999.  Creditors
                        approved the Plan in March 1999 and the Court
                        confirmed this Plan on March 30, 1999. The Plan
                        became effective on April 12, 1999.


                                                                              13
<PAGE>   40

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                   NOTES TO FINANCIAL STATEMENTS


                        Pursuant to the Plan, Class 1 creditors, representing
                        existing holders of convertible debentures, were
                        required to convert their debt to equity within six
                        months of the effective date of the Plan.  Claims of
                        unsecured creditors, below $1,000, were repaid in
                        cash on or before April 30, 1999.  Claims of
                        unsecured creditors greater than $1,000 were
                        satisfied by two cash payments totaling 25% of the
                        allowed claim on or before April 30, 1999. The
                        Company issued debentures to these unsecured
                        creditors for the remaining 75% of their allowed
                        claims.  The claim of Gary Davison related to the
                        judgement of $1,195,560 obtained against the Company
                        was reduced to $900,000 and allowed as an unsecured
                        nonpriority claim.  The Company then dismissed its
                        appeal of the state court verdict underlying the
                        Davison claim and Davison withdrew a second claim of
                        $2,350,000 related to a pending trial on another
                        matter associated with his dismissal from the
                        Company. Prior to confirmation of the Plan, the
                        Company's President assumed the allowed claim, the
                        effect of which is the amount due Davison will now be
                        paid to him.

                        In funding its Plan, the Company raised $1,000,000 by
                        selling common stock in a private offering.  The
                        debentures, totaling $2,490,357 issued to the
                        unsecured creditors, including the President in
                        connection with purchase of the Davison claim, mature
                        in April 2003.  The debentures will be convertible
                        into common stock of the Company between the first
                        and fourth anniversary of the effective date of the
                        Plan. The debentures are convertible at the average
                        of the closing price of the Company's common stock
                        for the ten consecutive trading days ending on the
                        trading day immediately prior to conversion. The
                        debentures bear interest at 7.5%, payable in common
                        stock of the Company.  If not converted sooner, all
                        debentures must be converted to common stock by April
                        2003.  The Company has the right, at anytime, to
                        redeem for cash at par value all of the outstanding
                        debentures plus any accrued interest. Each
                        debentureholder had the additional right to surrender
                        the entire debenture to the Company on April 12, 2000
                        and receive cash equal to 15% of the holder's
                        original allowed claim plus interest. As of April 30,
                        2000, all of these debentures had been converted into
                        common stock.

                                                                              14
<PAGE>   41
                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                   NOTES TO FINANCIAL STATEMENTS


                        Confirmation of the Plan on March 30, 1999 resulted in
                        an extraordinary gain determined as follows:

<TABLE>
<CAPTION>
                        --------------------------------------------------------------------------------
<S>                     <C>                                                         <C>
                        Accounts payable - unsecured creditors                      $      2,849,360
                        Reserve for litigation settlement                                  1,195,560
                        --------------------------------------------------------------------------------

                        Net carrying value of liabilities exchanged                        4,044,920

                        LESS CONSIDERATION EXCHANGED:
                           Convertible debentures issued                                   2,490,357
                           Cash option to unsecured creditors                                845,014
                           Settlement of note receivable                                    (123,600)
                        --------------------------------------------------------------------------------

                        Total consideration exchanged                                      3,211,771
                        --------------------------------------------------------------------------------

                        EXTRAORDINARY GAIN                                          $        833,149
                        ================================================================================
</TABLE>

3.    BUSINESS          On March 31, 2000, the Company acquired substantially
      ACQUISITIONS      all of the assets and assumed certain liabilities of
                        Cronus Technology, Inc. ("Cronus") for approximately
                        $9,600,000, plus the assumption of liabilities of
                        approximately $6,700,000 subject to adjustment as set
                        forth in the agreement. Approximately $9,300,000 of
                        the purchase price was funded through the issuance of
                        shares of the Company's common stock and
                        approximately $300,000 was paid in cash. Cronus
                        manufactures and sells telecommunications equipment
                        and provides consulting services for satelite
                        telecommunications planning. The acquisition was
                        accounted for as a purchase and, accordingly, the
                        acquired assets and liabilities were recorded at
                        their estimated fair market values at the date of
                        acquisition. The Company recorded goodwill of
                        approximately $12,000,000 related to this
                        transaction. The goodwill is being amortized on a
                        straight line basis over four years. The purchase and
                        debt assumption agreements related to the Cronus
                        acquisition obligate the Company to issue up to
                        1,225,000 additional common shares if the fair value
                        of its common stock has not reached $7.30 per share
                        prior to the one-year anniversary date of these
                        agreements. The Company will determine the purchase
                        price adjustment when, and if, it issues any
                        additional common shares. The following unaudited pro
                        forma information presents the results of operations
                        of the Company as if the acquisition had occurred on
                        May 1, 1998.


                                                                              15
<PAGE>   42

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                   NOTES TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                        Year ended April 30,                                  2000               1999
                        --------------------------------------------------------------------------------
<S>                     <C>                                           <C>                <C>
                        Revenue                                       $ 13,173,574       $ 13,859,546
                        Loss before extraordinary item                 (13,291,101)       (10,050,101)
                        Net loss                                       (13,291.101)        (9,216,952)
                        Diluted loss per common share                        (0.60)             (0.58)
                        ================================================================================
</TABLE>

                        These pro forma results of operations have been
                        prepared for comparative purposes only and do not
                        purport to be indicative of the results of operations
                        which actually would have resulted had the
                        acquisition occurred on the date indicated, or which
                        may result in the future.

                        On March 31, 1999, the Company acquired all of the
                        assets and assumed certain liabilities (as defined in
                        the agreement) of KG Data Systems, Inc., ("KG
                        Data").  KG Data has developed a product which
                        transmits data between IBM mainframes and remote
                        offices.  The purchase price was $845,000, which was
                        funded through the issuance of 719,149 shares of the
                        Company's common stock.  The acquisition was
                        accounted for as a purchase and, accordingly, the
                        acquired assets and liabilities were recorded at
                        their estimated fair market values at the date of
                        acquisition.  The Company recorded $723,325 of
                        goodwill related to this transaction.  This goodwill
                        is being amortized on a straight line basis over four
                        years.  The operations of KG Data in 1999 were not
                        material and accordingly, the Company has not
                        presented pro forma results of operations.

4.    INVENTORIES       Inventories consist of the following components:

<TABLE>
<CAPTION>
                          April 30,                                            2000               1999
                         --------------------------------------------------------------------------------
<S>                      <C>                                            <C>                <C>
                         Production materials                            $1,867,371        $ 2,916,235
                         Work-in-process                                    240,408            111,568
                         Finished goods                                     897,968          1,080,985
                         --------------------------------------------------------------------------------

                                                                          3,005,747          4,108,788

                         Reserve for inventory obsolescence                (600,000)        (1,450,000)
                         --------------------------------------------------------------------------------

                                                                         $2,405,747        $ 2,658,788
                         ================================================================================
</TABLE>




                                                                              16
<PAGE>   43

                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                   NOTES TO FINANCIAL STATEMENTS

5.    ACCOUNTS          Accounts receivable consist of the following:
      RECEIVABLE

<TABLE>
<CAPTION>
                                   April 30,                                           2000                1999
                                  --------------------------------------------------------------------------------
<S>                               <C>                                           <C>                  <C>
                                  Trade                                          $2,929,657          $  857,402
                                  Other                                             211,070              60,090
                                  --------------------------------------------------------------------------------

                                                                                  3,140,727             917,492

                                  Allowance for doubtful accounts                  (275,000)           (300,000)
                                  --------------------------------------------------------------------------------

                                                                                 $2,865,727          $  617,492
                                  ================================================================================
</TABLE>


6.    PROPERTY AND                Property and equipment consists of the
      EQUIPMENT                   following:


<TABLE>
<CAPTION>
                                  April 30,                                            2000                1999
                                  --------------------------------------------------------------------------------
<S>                               <C>                                          <C>                 <C>
                                  Manufacturing equipment                      $    530,796        $    251,285
                                  Furniture and fixtures                          1,725,855             293,901
                                  Leasehold improvements                            173,143              26,188
                                  Computers and electronics                         835,027             650,154
                                  Software                                        1,040,001             478,549
                                  Demo equipment                                    417,180              91,584
                                  --------------------------------------------------------------------------------

                                                                                  4,722,002           1,791,661

                                  Less accumulated depreciation
                                     and amortization                            (3,031,991)         (1,159,702)
                                  --------------------------------------------------------------------------------

                                                                               $  1,690,011        $    631,959
                                  ================================================================================
</TABLE>
                                  Depreciation expense for the three years
                                  ended April 30, 2000, 1999 and 1998 was
                                  $495,944, $379,591 and $357,583,
                                  respectively.


                                                                              17
<PAGE>   44
                                             FASTCOMM COMMUNICATIONS CORPORATION

                                                   NOTES TO FINANCIAL STATEMENTS

7.      OTHER CURRENT             Other current liabilities consist of the
        LIABILITIES               following:

<TABLE>
<CAPTION>
                                  April 30,                                            2000                1999
                                  --------------------------------------------------------------------------------
<S>                               <C>                                           <C>                    <C>
                                  Other accounts payable                        $   362,923            $109,296
                                  Customer credit balances                          156,730             149,778
                                  Accrued vacation                                  155,921                   -
                                  Allowance for warranty costs                      120,000             120,000
                                  Accrued professional fees                         113,938              78,842
                                  Accrued interest expense                           74,964              30,746
                                  Other                                             124,726              38,680
                                  --------------------------------------------------------------------------------

                                                                                 $1,109,202            $527,342
                                  ================================================================================
</TABLE>

8.      LONG-TERM                 Long-term debt consists of the following:
        DEBT

<TABLE>
<CAPTION>
                                  April 30,                                             2000               1999
                                  --------------------------------------------------------------------------------
<S>                               <C>                                             <C>                <C>
                                                                                                     $
                                  Revolving line of credit (a)                    $1,139,944                  -

                                  Term loan (a)                                      128,375                  -

                                  Notes payable (b)                                1,000,000                  -

                                  Capital lease obligations (c)                       14,824                  -

                                  7.5% convertible debentures, due
                                     April 2003 (d)                                  767,602          2,490,357

                                  5.0% convertible debentures, due
                                     April and May 2001 (e)                                -            200,000

                                  Less current portion of revolving
                                     line of credit and term loan                  1,268,319                  -

                                  Less current portion of capital lease
                                     obligations                                      11,281                  -

                                  Less current portion of notes
                                     payable                                       1,000,000                  -
                                  ------------------------------------------------------------------------------

                                                                                  $  771,145         $2,690,357
                                  ================================================================================
</TABLE>


                                                                              18
<PAGE>   45
                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS

                    (a) In connection with the acquisition of Cronus, the
                        Company assumed liabilities under a revolving line of
                        credit and term loan agreement with LaSalle National
                        Bank.  Under the revolving line of credit the Company
                        could borrow up to the lesser of $3,000,000 or 80% of
                        eligible accounts receivable and 35% of eligible
                        inventory, as defined in the agreement. The revolving
                        line of credit bears interest at the bank's prime
                        rate of interest plus 1.0% and was scheduled to
                        mature on May 1, 2001.  Under the agreement, Cronus
                        could issue letters of credit up to $250,000 in the
                        aggregate.  There are no outstanding letters of
                        credit as of April 30, 2000.  The term loan was
                        payable in equal monthly principle payments of
                        $9,875, bears interest at the bank's prime rate of
                        interest plus 1.0% and was schedule to mature on May
                        1, 2001. In April 2000, the Company placed $250,000
                        in escrow to further collateralize the revolving line
                        of credit and term loan. In July 2000, the bank
                        informed the Company that the revolving line of
                        credit and term loan would mature on September 30, 2000.
                        Accordingly, this debt has been classified as a
                        current liability. The Company expects to be able to
                        refinance this debt with a local bank prior to the
                        maturity date.

                    (b) In connection with the acquisition of Cronus, the
                        Company assumed short term notes payable to
                        individuals. The notes are unsecured, bear interest
                        at 8.0% and mature on December 10, 2000.

                    (c) In connection with the acquisition of Cronus, the
                        Company assumed liabilities for capital lease
                        obligations related to various office equipment.

                        As of April 30, 2000, future net minimum lease
                        payments under capital leases are as follows:

<TABLE>
<CAPTION>
                                  Year                                                                   Amount
                                  --------------------------------------------------------------------------------
<S>                                                                                                     <C>
                                  2001                                                                  $13,403
                                  2002                                                                    2,028
                                  --------------------------------------------------------------------------------

                                  Total minimum lease payments                                           15,431
                                  Less: amount representing interest                                        607
                                  --------------------------------------------------------------------------------

                                  Present value of net minimum lease payments                            14,824
                                  Less: current portion                                                  11,281
                                  --------------------------------------------------------------------------------

                                  Long-term capital lease obligation                                    $ 3,543
                                  ================================================================================
</TABLE>



                                                                             19


<PAGE>   46

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS



                        The net book value of assets under capital leases was
                        approximately $23,700 at April 30, 2000.

                    (d) In April 1999 the Company issued $2,490,357 in
                        convertible debentures in satisfaction of the
                        remaining 75% of each claim allowed in its plan of
                        reorganization (see Note 2).  The debentures earn
                        interest at a rate of 7.5% payable in the form of
                        common stock of the Company at time of conversion.
                        The debentures are convertible at the average of the
                        closing price of the Company's common stock for the
                        ten consecutive trading days ending on the trading
                        day immediately preceeding the date of conversion.
                        No conversions were permitted prior to April 6,
                        2000.  The Company may prepay the debentures at any
                        time.  Each debentureholder has the additional right,
                        but not the obligation, to surrender the entire
                        debenture to the Company on April 12, 2000 and
                        receive a cash distribution equal to 15% of the
                        holder's original allowed claim together with
                        accumulated interest under the plan of
                        reorganization.  The debentures mature on April 12,
                        2003.  Any debentures which have not been converted
                        by this date will automatically be converted into
                        common shares of the Company. During 2000, holders of
                        the debentures converted $1,825,552 of debentures and
                        accrued interest into 513,249 shares of common stock.

                    (e) In April 1997, the Company issued $3,000,000 in 5.0%
                        convertible debentures due April 2001.  In May 1997,
                        the Company issued $2,000,000 in 5% convertible
                        debentures due May 2001.  For the first 180 days
                        following the issuance, the debentures were
                        convertible at the option of the holder into common
                        stock  at a conversion price equal to the average
                        closing bid prices on NASDAQ for the ten trading days
                        prior to conversion.  If the conversion occurs more
                        than 180 days after the issuance, the conversion
                        price is the lesser of 125% of the average closing
                        bid prices on NASDAQ for the ten trading days prior
                        to the issuance date, or, 90% of the average closing
                        bid prices on NASDAQ for the ten trading days prior
                        to the conversion date.  In addition, if the
                        conversion occurs more than 180 days after the
                        issuance, the holder will receive one warrant for
                        every five shares of common stock received upon
                        conversion of the debentures.  If the conversion
                        occurs more than 360 days from the issuance, the
                        holder will receive one warrant for every 2 1/2
                        common shares received upon conversion of the
                        debentures.  Each warrant will have a strike price
                        set at 125% of the market price of the Company's
                        common stock at the time of conversion.  During 2000
                        and 1999, holders of the debentures converted
                        $224,684 and $1,073,310 of debentures and accrued
                        interest into 274,911 and 1,652,717 shares of common
                        stock, respectively.

                                                                              20
<PAGE>   47

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS



                        The terms of the convertible debenture provide for
                        conversion at a discount to the market commencing 181
                        days after issuance.  The value of the discount,
                        using a conversion price of 90% of the average
                        closing bid prices on NASDAQ for the ten trading days
                        prior to the conversion date, was approximately
                        $550,000.  Since the holders of the convertible
                        debentures did not elect to exercise their option to
                        convert the debentures into common stock of the
                        Company within 180 days of issuance (i.e., at a
                        conversion price of 100% of market), the Company was
                        required to recognize on the 181st day from issuance
                        the amount of the conversion discount.  Recognition
                        of the conversion discount reduced income available
                        to common shareholders during fiscal 1998 by $550,000
                        in the form of a one-time non-cash charge to
                        interest expense.

9.    STOCKHOLDERS'     In April 2000, the Company issued 728,063 shares of
      EQUITY            common stock in settlement of $5,314,862 in
                        liabilities assumed as part of the acquisition of
                        Cronus (see Note 3).

                        In January 2000, the Company executed an agreement
                        with an investment banking firm to provide investment
                        banking and advisory services through August 31,
                        2001.  As consideration for these services the
                        Company issued 200,000 warrants to purchase the
                        Company's common stock at an exercise price of $7.50
                        per share.  The warrants are exercisable at any time
                        from February 1, 2000 to January 31, 2003.  The
                        warrants have been valued at $570,817 using the
                        Black-Scholes option pricing model. The Company has
                        recorded the value of these warrants as deferred
                        investment advisory fees and is amortizing the value
                        over the term of the agreement.

                        In July 1999, the Company issued 1,110,040 shares of
                        common stock for  $1,086,723 through a private
                        placement offering of securities to a group of
                        accredited investors.

                        During fiscal 2000, the Company received $4,392,184
                        in proceeds on the exercise of warrants, which
                        resulted in the Company  issuing 3,682,009 shares of
                        common stock. As of April 30, 2000, the Company has
                        outstanding 2,662,106 warrants to purchase common
                        stock of the Company at exercise prices ranging from
                        $1.87 to $7.50. The warrants expire principally in
                        2003.

                        During fiscal 2000, the Company issued 788,160 shares
                        of common stock on the conversion of debentures and
                        accrued interest totaling $2,050,236.

                                                                              21
<PAGE>   48

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


                        In April 1999, the Company issued 1,333,333 shares of
                        common stock for $1,000,000 though a private
                        placement offering of securities to a group of
                        Company employees, insiders and accredited investors.
                        These proceeds, except for the $71,723 ($152,367 in
                        1999) placed in escrow, funded the 25% cash payment
                        to the unsecured creditors as per the plan of
                        reorganization.

10.   STOCK OPTIONS     The Company has both a qualified and non-qualified
                        stock option plan (the "Plans") under which options
                        to purchase up to 2,260,000 shares of common stock
                        may be granted to officers, directors and other key
                        employees of the Company.

                        The exercise price of each option may not be less
                        than 100% of the fair market value of the stock on
                        the date of grant for incentive stock options or 85%
                        of such fair market value for non-qualified stock
                        options, as determined by the Board.  Generally,
                        options vest over a three year period and expire five
                        years from the date of grant and, in most cases, upon
                        termination of employment. The following table
                        relates to options outstanding, granted, exercised,
                        and canceled during 2000, 1999 and 1998, under the
                        Plan:




                                                                              22
<PAGE>   49

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                                                                                               Option
                                                                          Number                Price
                        Options                                        of Shares           Per Shares
                        --------------------------------------------------------------------------------
<S>                                                                   <C>         <C>
                        Outstanding at
                           April 30, 1998                              1,360,911   $  2.06 to 15.63
                           April 30, 1999                              1,765,992   $  0.25 to 15.63
                           April 30, 2000                              2,975,501   $  0.25 to 15.63

                        Granted
                           During 1998                                 1,046,564   $  2.50 to  5.88
                           During 1999                                   866,138   $  0.25 to  1.35
                           During 2000                                 1,957,954   $  0.40 to  3.97

                        Exercised
                           During 1998                                     3,499   $  5.00 to  5.88
                           During 1999                                         -                  -
                           During 2000                                   182,238   $  0.29 to  5.88

                        Canceled
                           During 1998                                   847,689   $  2.50 to 15.63
                           During 1999                                   461,057   $  0.29 to 12.00
                           During 2000                                   566,207   $  0.29 to  7.75
</TABLE>


                        A summary of stock options outstanding and exercisable
                        as of April 30, 2000 is as follows:

<TABLE>
<CAPTION>
                                            Options Outstanding                           Options Exercisable
                        ============================================================  ===========================

                                                              Weighted
                                                               Average     Weighted                   Weighted
                         Range of                            Remaining      Average                    Average
                         Exercise                 Number  Life (years)     Exercise        Number     Exercise
                         Prices              Outstanding                      Price   Exercisable        Price
                        ----------------------------------------------------------------------------------------
                         <S>                   <C>              <C>         <C>          <C>          <C>
                         $  0.25 to $ 2.50     2,199,507        3.9         $ 1.19       424,867       $ 1.81
                         $  2.59 to $ 3.97       660,334        4.7         $ 3.45        52,732       $ 2.68
                         $  5.00 to $ 6.82        80,660        1.7         $ 5.99        70,640       $ 6.00
                         $ 12.00 to $15.63        35,000        1.1         $14.07        35,000       $14.07
                        =========================================================================================
</TABLE>

                        The Company has adopted the disclosure-only provisions
                        of SFAS-No. 123 "Accounting for Stock Based
                        Compensation", but applies Accounting Principles Board
                        Opinion No. 25 and related interpretations in
                        accounting for its stock option plans. For SFAS No. 123
                        purposes, the


                                                                              23
<PAGE>   50

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS



                        weighted average fair value of each option grant has
                        been estimated as of the date of grant using the
                        Black-Scholes option pricing model with the following
                        weighted average assumptions: risk-free interest rate
                        of 5.96%, 5.53% and 5.77% and expected volatility of
                        125.0%, 60.0% and 65% and expected option life of 4, 5
                        and 5 years for the years ended April 30, 2000, 1999
                        and 1998, respectively, and dividend payout rate of
                        zero for each year Using these assumptions, the
                        weighted average fair value of the stock options
                        granted is $1.41, $0.38 and $1.76 for 2000, 1999 and
                        1998, respectively. There were no adjustments made in
                        calculating the fair value to account for vesting
                        provisions or for non-transferability or risk of
                        forfeiture.

                        If the Company had elected to recognize compensation
                        cost based on the fair value at the grant dates for
                        options issued under the plans described above,
                        consistent with the method prescribed by SFAS No. 123,
                        net loss applicable to common shareholders and loss per
                        share would have been changed to the pro forma amounts
                        indicated below:

<TABLE>
<CAPTION>
                        Year ended April 30,
                        (in thousands, except per share data)             2000         1999          1998
                        ------------------------------------------------------------------------------------
<S>                                                                    <C>          <C>           <C>
                        Net loss applicable to common
                           shareholders:  as reported                  $(6,817)     $(5,550)      $(9,089)
                                          pro forma                     (8,462)      (6,222)       (9,701)

                        Diluted loss per
                           share:         as reported                  $ (0.35)     $ (0.43)     $  (0.87)
                                          pro forma                      (0.44)       (0.48)        (0.93)
                        ====================================================================================
</TABLE>


11.   INCOME TAXES      The Company has net operating loss carryforwards for
                        income tax reporting purposes of approximately
                        $28,997,000, which begin to expire in 2008.  The
                        amount of the net operating loss carryforward related
                        to the compensation element of stock options is
                        approximately $10,381,000, which when realized will
                        be a credit to paid in capital.  In addition, the
                        Company has research and development credit
                        carryforwards of approximately $869,000, which begin
                        to expire in 2006.



                                                                              24
<PAGE>   51
                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


                        The difference between the Federal tax rate and the
                        effective tax rate realized as a percent of pretax
                        earnings for the years ended April 30, 2000, 1999,
                        and 1998, is as follows:


<TABLE>
<CAPTION>
                                                           2000                   1999                  1998
                                                    AMOUNT      RATE       Amount     Rate       Amount      Rate
                         -------------------------------------------------------------------------------------------
<S>                                              <C>           <C>      <C>           <C>     <C>           <C>
                         Tax provision
                           (benefit) at
                           statutory rates       $(2,318,000)   (34.0)  $(1,887,000)  (34.0)  $(5,817,000)   (34.0)

                         Valuation
                            allowance              2,318,000     34.0     1,887,000    34.0     5,817,000     34.0
                         -------------------------------------------------------------------------------------------

                                                 $         -      -     $         -     -      $        -      -
                         ===========================================================================================
</TABLE>

                         No deferred taxes have been recognized in the
                         accompanying consolidated financial statements as of
                         April 30, 2000 and 1999. The components of deferred
                         income taxes are as follows:

<TABLE>
<CAPTION>
                          April 30,                                          2000                   1999
                         ----------------------------------------------------------------------------------
<S>                                                              <C>                       <C>
                         DEFERRED TAX LIABILITIES
                            Accelerated depreciation             $        126,000          $     114,000
                         ----------------------------------------------------------------------------------

                         Total deferred tax liabilities                   126,000                114,000
                         ----------------------------------------------------------------------------------

                         DEFERRED TAX ASSETS
                            NOL carryforwards                          11,591,000             10,403,000
                            Allowance for doubtful accounts               110,000                120,000
                            Inventory reserve                             240,000                580,000
                            Tax credits                                   759,000                662,000
                            Amortization of goodwill                      216,000                 67,000
                            Stock options as compensation                  76,000                 31,000
                            Other                                          93,000                 48,000
                         ----------------------------------------------------------------------------------

                         Total deferred tax assets                     13,085,000             11,911,000
                         ----------------------------------------------------------------------------------

                         Net deferred tax assets                       12,959,000             11,797,000
                         Less: Valuation allowance                    (12,959,000)           (11,797,000)
                         ----------------------------------------------------------------------------------

                         TOTAL                                   $              -       $              -
                         ==================================================================================
</TABLE>


                                                                              25

<PAGE>   52


                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


                        Management has provided a valuation allowance for
                        deferred tax assets as of April 30, 2000, because they
                        are unable to predict when the benefit of these items
                        will be recognized in future years.

12.   SIGNIFICANT       Certain customers accounted for 10% or more of the
      CUSTOMERS AND     Company's total revenue during the years ended April
      FOREIGN EXPORTS   30, 2000, 1999 and 1998 as noted below:

<TABLE>
<CAPTION>
                                2000                         1999                     1998
                         CUSTOMER  % OF SALES        Customer    % of Sales   Customer    % of Sales
                        -----------------------------------------------------------------------------
<S>                                  <C>          <C>             <C>        <C>             <C>
                            A         18
                            B         15                C            28          C            32
                            D         12
                        ==============================================================================
</TABLE>

                        Sales to customers A, B and D were $1,162,000, $930,000
                        and $775,000 in 2000, respectively.  Sales to customer
                        C were $1,307,000 and $2,870,000 in 1999 and 1998,
                        respectively.

                        In 1999 and 1998, the Company had export sales to
                        foreign customers totaling approximately $1,800,000,
                        and $3,292,000, respectively.  These amounts constitute
                        39% and 37% of total revenues, respectively. The export
                        sales were made to customers in Venezuela, Peru and
                        Brazil.  There were no significant export sales in
                        2000.


13.   COMMITMENTS       LITIGATION
      AND
      CONTINGENCIES     In 1997, Gary H. Davison a former officer and
                        director of the Company commenced two lawsuits
                        against the Company in the Circuit Court of Fairfax,
                        Virginia, one for wrongful termination and the other
                        for breach of contract.  The breach of contract
                        action involved claims for options to purchase
                        100,000 shares of stock and a $100,000 bonus.  On
                        February 17, 1998, a jury in Fairfax County awarded
                        Mr. Davison $1,125,000 in damages and $163,233 in
                        interest accrued from May 26, 1996 in this case.
                        Accordingly, the Company recorded a loss provision
                        for this amount in its third fiscal quarter ended
                        January 31, 1998.  Subsequently, this award was
                        reduced by $100,000.  The Company filed an appeal of
                        this decision with the Virginia Supreme Court.  The
                        Company settled these lawsuits  for $900,000 as part
                        of its plan of reorganization (see Note 2).


                                                                              26
<PAGE>   53

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


                        SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

                        In fiscal 1995, the Securities and Exchange
                        Commission (the "SEC") began an inquiry relating to
                        certain prior public disclosures and periodic reports
                        of the Company.  In September 1999, the Company, its
                        Chief Executive Officer and Chairman of the Board and
                        its Chief Financial Officer agreed to a settlement
                        with the SEC.  Without admitting or denying the
                        allegations, the Company consented to the entry of a
                        final judgement which enjoins it from violations of
                        specific sections of the Securities Exchange Act of
                        1934 and the involved officers consented to the entry
                        of an order to cease and desist committing or causing
                        any violations or future violations of specific
                        sections of the Securities and Exchange Act of 1934.

                        EXCLUSIVE LICENSE AGREEMENTS

                        In May 1999, the Company entered into a licensing and
                        task order agreement with Taboret, an Arinc Inc.
                        subsidiary. The license provides for development of a
                        graphical user interface (GUI) and a suite of SNMP
                        tools to manage communication equipment and create
                        management reports. The total committed cost for the
                        basic management system is $61,000. An additional
                        committed cost for each FastComm unit type, special
                        project editor, maintenance, block distribution run
                        time licenses and options totaled $15,000.

                        In November 1998, the Company entered into a 20-year
                        licensing agreement with Telogy Networks, Inc. to
                        deliver their Golden Gateway Voice Over Packet
                        software and documentation service. The total
                        committed cost is $281,000. Payments will be spread
                        over a 24-month period.

                        In November 1998, the Company obtained a worldwide
                        non-exclusive royalty bearing license from Alcatel
                        Data Networks, Inc. ("Alcatel") to use and further
                        develop Alcatel owned technology and intellectual
                        property. The terms and conditions of this agreement
                        call for a one-time fee of $50,000 payable in four
                        equal installments plus royalty payments based on
                        unit sales. The initial term of this agreement is
                        twenty years and is renewable subject to negotiation
                        of terms and conditions agreeable to both parties 30
                        days prior to its expiration.


                                                                              27
<PAGE>   54

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


                        OPERATING LEASES

                        The Company leases office space and certain office
                        equipment under operating lease arrangements that
                        expire at various dates through 2003.  The main
                        office lease provides for scheduled rent increases in
                        the future which are being amortized over the lease
                        period.  Rent expense for the years ended April 30,
                        2000, 1999, and 1998, was approximately $434,000,
                        $609,000 and $662,000, respectively.  Aggregate
                        future minimum lease payments under the operating
                        leases are as follows:

<TABLE>
<CAPTION>
                        Year ended April 30,
                        ------------------------------------------------------
                        <S>                                         <C>
                        2001                                        $557,707
                        2002                                         441,200
                        2003                                         280,023
                        2004                                           1,387
</TABLE>
                        ======================================================

                        COMPENSATION

                        The Company maintains an employment agreement with
                        its President and Principal Executive Officer.  This
                        agreement provides for a base salary of $100,000 plus
                        bonus and incentive compensation as may be deemed
                        appropriate by the Board of Directors.  The agreement
                        was scheduled to expire on January 31, 2000, however,
                        the agreement was automatically renewed through
                        January 31, 2001 by the Board of Directors. In
                        connection with the acquisition of KG Data, the
                        Company entered into a three year employment
                        agreement, expiring March 31, 2002, with the former
                        President and sole stockholder of KG Data. This
                        agreement provides for a base salary of $100,000 plus
                        bonus and incentive compensation as deemed
                        appropriate by the Board of Directors.

                        The Company maintains a defined contribution plan
                        that covers substantially all of its employees.
                        Employees may contribute a portion of their
                        compensation as defined under the Internal Revenue
                        Code and employer contributions are discretionary.
                        There were no employer contributions in 2000, 1999 or
                        1998.


                                                                              28
<PAGE>   55


                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS



14.   FINANCIAL         Generally accepted accounting principles requires the
      INSTRUMENTS       disclosure of the fair value of financial
                        instruments; however, this information does not
                        represent the aggregate net fair value of the
                        Company.  Some of the information used to determine
                        fair value is subjective and judgmental in nature;
                        therefore, fair value estimates, especially for less
                        marketable securities, may vary.  The amounts
                        actually realized or paid upon settlement or maturity
                        could be significantly different.

                        Unless quoted market price indicates otherwise, the
                        fair value of accounts receivable generally
                        approximates market because of the short maturity of
                        these instruments.  The Company has estimated the
                        fair value of long-term debt based on quoted market
                        prices for similar debentures.

                        The estimated fair values of the Company's financial
                        instruments, none of which are held for trading
                        purposes, are summarized as follows:

<TABLE>
<CAPTION>
                         April 30,                            2000                     1999
                        -------------------------------------------------------------------------------------------
                                                    Carrying       Estimated   Carrying     Estimated
                                                      Amount      Fair Value     Amount    Fair Value
                        -------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>          <C>          <C>
                         Convertible debentures     $767,602      $615,000     $2,690,357   $1,825,000
                        ===========================================================================================
</TABLE>

15.   FOURTH QUARTER    During the fourth quarter ended April 30, 1998, the
      ADJUSTMENTS       Company recorded provisions for obsolete inventory of
                        $570,000 and a valuation allowance related to an
                        uncollectible note receivable of $273,600 all of
                        which had the effect of increasing the operating loss
                        and net loss by $843,600 or $0.08 per share.  These
                        additional provisions were necessary in the fourth
                        quarter of fiscal 1998 due to changes in estimates
                        caused by decreased sales and the decline in the fair
                        value of the related collateral for the note
                        receivable.

16.     SUPPLEMENTAL    Supplemental information on interest paid is as follows:
        CASH FLOW
        INFORMATION

<TABLE>
<CAPTION>
                        For the year ended April 30,                2000           1999         1998
                        --------------------------------------------------------------------------------
                        <S>                                      <C>         <C>            <C>
                        Interest                                  $1,728       $      -      $   542
                        ================================================================================
</TABLE>



                                                                              29
<PAGE>   56

                                            FASTCOMM COMMUNICATIONS CORPORATION

                                                  NOTES TO FINANCIAL STATEMENTS


                        Supplemental disclosure of non-cash investing
                        and financing activities:


<TABLE>
<CAPTION>
                         For the year ended April 30,                 2000        1999          1998
                        ---------------------------------------------------------------------------------
<S>                                                            <C>          <C>          <C>
                        Common stock issued for
                           Cronus acquisition                  $ 9,275,132  $        -   $         -

                        Liabilities assumed in
                           Cronus acquisition                  $10,104,104  $        -   $         -
                        =================================================================================

                        Issuance of common stock in
                           connection with acquisition
                           of assets of KG Data                $         -  $  845,000    $        -
                        =================================================================================

                        Issuance of stock for
                           convertible debentures              $ 2,050,236  $1,073,310    $3,946,373
                        =================================================================================

                        Notes payable settled through
                           issuance of common stock            $ 1,863,142  $         -   $        -
                        =================================================================================

                        Warrants issued to nonemployees        $   570,817  $         -   $        -
                        =================================================================================
</TABLE>



                                                                              30
<PAGE>   57



REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE

FASTCOMM COMMUNICATIONS CORPORATION

The audits referred to in our report, which includes an explanatory paragraph
related to substantial doubt about the Company's ability to continue as a going
concern, to FastComm Communications Corporation, dated July 14, 2000 which is
contained in Item 8 of this Form 10-K, included the audit of the financial
statement schedule listed in the accompanying index for each of the three years
in the period ended April 30, 2000. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statement schedule based upon our audits.

In our opinion, such schedule presents fairly, in all material respects, the
information set forth therein.

                                                               BDO Seidman, LLP



Washington, D.C.
July 14, 2000




                                                                              31
<PAGE>   58


                                            FASTCOMM COMMUNICATIONS CORPORATION

                                  SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS

                                                                    SCHEDULE II


<TABLE>
<CAPTION>

                                                        Balance       Charged to                        Balance
                                                   at Beginning        Costs and                         at End
                                                      of Period         Expenses    Deductions        of Period
--------------------------------------------------------------------------------------------------------------------

<S>                                                <C>              <C>           <C>               <C>
Year Ended April 30, 1998

   Reserves and allowances deducted
     from asset accounts:
       Obsolescence reserve for
         inventory                                   $  500,000     $  1,110,000   $  (240,000) 2/   $1,370,000
       Allowance for doubtful accounts               $  110,000     $    275,421   $   (85,421) 1/   $  300,000
====================================================================================================================

Year Ended April 30, 1999

   Reserves and allowances deducted
     from asset accounts:
       Obsolescence reserve for
         inventory                                   $1,370,000     $     80,000             -       $1,450,000
       Allowance for doubtful accounts               $  300,000     $     78,792   $   (78,792)1/     $ 300,000
====================================================================================================================

Year Ended April 30, 2000

   Reserves and allowances deducted
     from asset accounts:
       Obsolescence reserve for                      $1,450,000     $    815,347   $(1,665,347)2/    $  600,000
         inventory                                   $  300,000     $      1,764   $   (26,764)1/    $  275,000
       Allowance for doubtful accounts
====================================================================================================================
</TABLE>


1/ Accounts written off
-
2/ Inventory scrapped or disposed of
-





                                                                              32
<PAGE>   59


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE


NONE.


                                       27
<PAGE>   60


                                    PART III.


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following lists the directors and executive officers of the Company, their
ages, descriptions of their business experience and positions held with the
Company:

<TABLE>
<CAPTION>
Name                         Age            Position
----                         ---            --------
<S>                          <C>            <C>
Peter C. Madsen(1)(2)        49             President, Chief Executive Officer and Chairman of the Board
Mark H. Rafferty             45             Vice President - Finance, Treasurer, Secretary and Director
William A. Grant             47             Executive Vice President - Global Sales
Dr. Kenneth Bloom            51             Vice President - Mainframe Networking
Safa Alkateb                 32             Vice President - Engineering
Thomas W. Colligan           52             Vice President - Corporate Development
Roy Wainwright               53             Executive Vice President
Darlene Greenhaw             49             Vice President - Sales
Edward R. Olson(1)(2)        59             Director
Thomas G. Amon(1)(2)         53             Director
</TABLE>

(1)  Member Stock Option Committee.
(2)  Member Audit Committee.


All directors hold office until the next annual meeting of the shareholders and
the election and qualification of their successors. The officers are elected by
and serve at the discretion of the Board of Directors. See "Employment and
Control Arrangements" under Item 11, "Executive Compensation."

PETER C. MADSEN has been President, Chief Executive Officer and a director of
the Company since September 1992. From November 1986 to January 1992, he was an
officer of the Newbridge Networks Corporation, a Canadian telecommunications
company, most recently as Vice President and General Manager, United States
Region, and President of Newbridge Networks Inc., Newbridge Networks
Corporation's United States subsidiary. Mr. Madsen served as a director of
Newbridge Networks Corporation from September 1987 until June 1998.

MARK H. RAFFERTY has been Vice President, Chief Financial Officer and Treasurer
of the Company since August 1993 and a director of the Company since March 1998.
From August 1992 to August 1993, Mr. Rafferty was Vice President, Finance at
Newbridge Networks Inc. From August 1987 through August 1992, Mr. Rafferty was
Controller of Newbridge Networks Inc.

WILLIAM A. GRANT has served as Executive Vice President - Global Sales for the
Company since November, 1997. From October 1996 through October 1997, Mr. Grant
served as Vice President - Global Sales for Memotec Communications Corporation.
From January 1994 through September 1996, Mr. Grant was Vice President -
Business Development for FastComm. Prior to this time, Mr. Grant was President
of Inteletouch Corporation, a telecommunications equipment company.

DR. KENNETH A. BLOOM has served as Vice President - Mainframe Networking since
March 1999. For five years prior to this time, Dr. Bloom was President and sole
stockholder of KG Data Systems, Inc., which was acquired by the Company in March
1999.

SAFA ALKATEB has been Vice President - Engineering for the Company since
February 1999. From April 1994 to January 1999, Mr. Alkateb held a variety of
engineering positions within the Company. From October 1992 to March 1994, Mr.
Alkateb was Product Development Senior Software Engineer for Novak Engineering
Company, an engineering consulting firm.

THOMAS W. COLLIGAN was Vice President - Business Development for the Company
from July 1998 to September 1999. From August 1997 to February 1998, Mr.
Colligan was employed by InterNex Information Systems, a nationwide internet
service provider. From November 1992 to January 1997, Mr. Colligan was Director
of Federal Sales, National Accounts and Eastern Region Operations for Ascend
Communications, a telecommunications equipment manufacturer. Mr. Colligan
resigned from his position with the Company effective September 17, 1999.

ROY WAINWRIGHT has been Executive Vice President of the Company since April 3,
2000. From March 1997 to March 2000, Mr. Wainwright was Vice President / General
Manager of Cronus Communications Inc. From June 1995 to March 1997, Mr.
Wainwright was Associate Vice President - Product Marketing at Computer Sciences
Corporation.


                                       28
<PAGE>   61


DARLENE GREENHAW has been Vice President - Sales for the Company since April 3,
2000. From October 1999 to March 2000, Ms. Greenhaw was Vice President - Sales
at Cronus Communications Inc. From September 1987 to September 1999, Ms.
Greenhaw was Vice President - Sales at Newbridge Networks Inc.

EDWARD R. OLSON has served as a director since January 1989. From 1990 to April
1997, Mr. Olson was the President, Chief Executive Officer and Chairman of M-C
Industries, Inc., a fluid hydraulics equipment manufacturer. Commencing July 1,
1995, Mr. Olson became a principal in KPMG Baymark Strategies LLC, an
independent consulting firm in a strategic alliance with KPMG Peat Marwick, LLP.
KPMG Baymark Strategies LLC has since become Dominion Management LLC. Mr. Olson
was President and COO of Porta Systems Corporation from November 1995 to January
1997. Mr. Olson has been Chairman of S&L Metal Products Corporation, Queens, NY
for the last five years.

THOMAS G. AMON has served as a director since December 1994. For the past five
years, Mr. Amon has been an attorney in private practice in New York City. Since
June 1, 1999, Mr. Amon has been a partner in the law firm on Sokolow, Dunaud,
Mercadier & Carreras, LLP., New York, NY and Paris, France.


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and with the National Association of Securities Dealers, Inc. Automated
Quotations (NASDAQ) system. Officers, directors and greater than ten percent
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during its fiscal year
ended April 30, 2000, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with, except for
one report regarding a stock option exercise filed late by Mr. Amon.


                                       29
<PAGE>   62


ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information regarding compensation paid by the
Company to the nine named executives (the "Named Executive Officers") for
services furnished in all capacities to the Company during the fiscal year ended
April 30, 2000, as well as such compensation paid by the Company to the Named
Executive Officers during the Company's two previous fiscal years

<TABLE>
<CAPTION>
                                                                                      LONG TERM
                                                                                     COMPENSATION
                                                  ANNUAL COMPENSATION                   AWARDS
                                     -------------------------------------------     ------------
                                                                                      SHARES OF
                                                                    OTHER ANNUAL     COMMON STOCK
                                                                    COMPENSATION      UNDERLYING
NAME AND PRINCIPAL POSITION          YEAR    SALARY($)    BONUS($)     ($)(1)           OPTIONS
---------------------------          ----    ---------    --------  ------------     ------------
<S>                                  <C>     <C>          <C>       <C>              <C>
Peter C. Madsen(2)                   2000     100,000          --       7,600           200,000
     President, CEO and Chairman     1999      96,154          --       7,320            20,000
     of the Board of Directors       1998      98,077          --       7,320                --

Mark H. Rafferty(3)                  2000     130,000          --       7,300           233,334
     Vice President and              1999     125,000          --       8,075            20,000
     Chief Financial Officer         1998     116,732          --       8,075                --

Safa Alkateb(4)                      2000     105,000          --          --           100,000
     Vice President -                1999      89,192          --          --            47,000
     Engineering

Thomas Colligan(5)                   2000      30,300          --       5,000                --
     Vice President-                 1999      61,058          --      10,000           125,000
     Corporate Development

William A. Grant(6)                  2000     175,000          --       6,000            65,000
     Vice President-                 1999     167,983          --       6,000            35,000
     Global Sales                    1998      64,098      30,000       3,000           100,000

Kennth A. Bloom(7)                   2000     100,000          --          --                --
     Vice President-                 1999       8,333          --          --           120,000
     Mainframe Networking

Roy Wainwright                       2000       8,100          --          --           125,000
     Executive Vice President

Darlene Greenhaw                     2000       9,375          --          --            80,000
     Vice President - Sales
</TABLE>

1)   Automobile benefit.

2)   At April 30, 2000, Mr. Madsen held 1,723,677 restricted shares of Common
     Stock with a market value of $6,248,329 at that date.

3)   At April 30, 2000, Mr. Rafferty held 43,420 restricted shares of Common
     Stock with a market value of $157,398 at that date.


                                       30
<PAGE>   63


4)   At April 30, 2000, Mr. Alkateb held 2,000 restricted shares of Common Stock
     with a market value of $7,250 at that date.

5)   At April 30, 2000, Mr. Colligan held 325,000 restricted shares of Common
     Stock with a market value of $1,178,125 at that date. Mr. Colligan resigned
     from his position with the Company effective September 17, 1999.

6)   At April 30, 2000, Mr. Grant held 36,667 restricted shares of Common Stock
     with a market value of $132,918 at that date.

7)   At April 30, 2000, Dr. Bloom held 719,149 restricted shares of Common Stock
     with a market value of $2,606,915 at that date.



FISCAL 2000 OPTION GRANTS

The following table sets forth information concerning grants of stock options to
the Named Executive Officers and Directors made pursuant to the Company's 1999
Stock Option Plan during the fiscal year ended April 30, 2000:

                     Stock Option Grants in Fiscal Year 2000

                                INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
                     Securities        Percent of                                   Potential Realizable Value
                     Underlying       Total Options     Exercise                     at Assumed Annual Rates
                      Options          Granted to          or                      of Stock Price Appreciation
                      Granted         Employees in     Base Price   Expiration         For Option Term
Name                    (#)           Fiscal Year        ($/sh)        Date         5%($)           10%($)
----                 ----------       -------------    ----------   ----------   ----------   ------------------
<S>                  <C>              <C>              <C>          <C>          <C>          <C>
Peter C. Madsen       200,000            10.21%         $   1.03       8/2/04     $ 57,000         $129,600

Mark H. Rafferty      150,000             7.66%         $   1.03       8/2/04     $ 42,750         $ 97,200

Mark H. Rafferty       83,334             4.26%         $   0.69       9/9/04     $ 15,833         $ 35,834

Darlene Greenhaw       80,000             4.09%         $   3.50      4/11/05     $ 77,360         $176,000

Roy Wainwright        125,000             6.38%         $   3.50      4/11/05     $120,875         $275,000

Thomas G. Amon         30,000             1.53%         $   1.03       8/2/04     $  8,550         $ 19,440

Edward R. Olson        30,000             1.53%         $   1.03       8/2/04     $  8,550         $ 19,440

Thomas Colligan            --               --                --           --           --               --

William A. Grant       40,000             2.04%         $   1.03       8/2/04     $ 11,400         $ 25,920

William A. Grant       25,000             1.28%         $   0.73     10/27/04     $  5,000         $ 11,500

Safa Alkateb           40,000             2.04%         $   1.03       8/2/04     $ 11,400         $ 25,920

Safa Alkateb           60,000             3.06%         $   0.73     10/27/04     $ 12,000         $ 27,600
</TABLE>

The exercise price of each option may not be less than 100% of the fair market
value of the stock on the date of the grant for incentive options or 85% of such
fair value for non-qualified stock options, as determined by the Board of
Directors. The vesting period is determined by the Board of Directors. Options
expire five years from the date of grant and, in most cases, upon termination of
employment.


                                       31
<PAGE>   64


FISCAL 2000 AGGREGATE OPTION EXERCISES AND YEAR-END OPTION VALUES

The following table sets forth information concerning each exercise of stock
options during the fiscal year ended April 30, 2000 by each of the Named
Executive Officers and Directors and the fiscal year-end value of unexercised
options held by such persons:

<TABLE>
<CAPTION>
                                                             Shares                      Value of
                                                           Underlying                   Unexercised
                                                           Unexercised                  in-the-money
                                                           Options at                    Options at
                                                           Fiscal Year-                 Fiscal Year-
                        Shares           Value                End(#)                       End($)
                      Acquired on      Realized            Exercisable/                 Exercisable/
Name                  Exercise(#)        ($)              Unexercisable                Unexercisable
----                  -----------      --------         ------------------         ---------------------
<S>                   <C>              <C>              <C>        <C>             <C>          <C>
Peter C. Madsen            --               --          206,666     13,334         $540,098     $ 42,202

Thomas G. Amon          6,666           10,266           30,000     10,000               --     $ 12,050

Edward R. Olson            --               --           33,333     16,667         $ 24,851     $ 42,199

Mark H. Rafferty           --               --          181,666     96,668         $410,348     $286,787

Roy Wainwright             --               --               --    125,000               --     $ 15,625

Darlene Greenhaw           --               --               --     80,000               --     $ 10,000

Thomas Colligan        62,500           23,988               --         --               --           --

Kenneth A. Bloom           --               --           40,000     80,000         $ 93,000     $186,000

William A. Grant           --               --          143,332     56,668         $303,214     $109,853

Safa Alkateb               --               --          180,111     63,556         $401,069     $138,922
</TABLE>

BOARD REPORT ON EXECUTIVE COMPENSATION

The Company does not have a formal compensation committee. Compensation levels
for executive officers are approved by the Board of Directors. The Board of
Directors is presently comprised of the following individuals: Peter C. Madsen,
Thomas G. Amon , Edward R. Olson and Mark H. Rafferty. Salaries are reviewed
periodically and are based on individual performance, the extent of individual
experience and responsibility and comparisons with salaries paid in the
industry.

The Company recruits for its executive officer positions from within the
communications industry. In most instances, the source company is significantly
larger than the Company. It has been the policy of the Board of Directors of
FastComm to hire executive officers at levels below that of their current
salaries along with a stock option package intended to make up for the
differentiation and to provide a performance incentive. The Company believes
that stock options are an attractive benefit in that they enhance performance
and loyalty at little cost. The Company believes the compensation packages
offered to its current employees and prospective employees have been consistent
with that of the communications industry.

The Board granted six executive officers options during fiscal 2000. Four of
these grants were determined by the individuals performance, responsibility and
seniority. The remaining grants were a condition of employment.


                                       32
<PAGE>   65


The Board adheres to a policy of granting options to executive officers based
upon performance and responsibility. In addition, the Board also considers the
relative importance of the job function being performed and the number of
options currently held by the executive officer, and options granted for
comparable positions in peer group companies.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the year, Peter C. Madsen, Edward R. Olson, Thomas G. Amon and Mark H.
Rafferty as directors participated in deliberations of the Company's Board of
Directors concerning executive officer compensation and stock option grants,
including their own. None of such directors was party to any reportable
interlock or participation during fiscal 2000.

EMPLOYMENT AND CONTROL ARRANGEMENTS

Pursuant to the Employment Agreement dated September 18, 1992, Mr. Madsen was
elected President and Chief Executive Officer of the Company at an annual base
salary of $100,000 per year. Under this agreement, Mr. Madsen has been granted
full control of and authority over the operations of the Company, subject to the
general oversight of the Board of Directors. This agreement, which currently
expires on January 31, 2001, is renewable thereafter on a year to year basis.

In connection with the acquisition of KG Data, the Company entered into a three
year Employment and Non Competition Agreement on March 31, 1999 with Dr. Kenneth
A Bloom. The Agreement provided that Dr. Bloom be employed by the Company in a
senior management capacity at an annual salary of $100,000 plus incentives based
on sales of the ChanlComm(R) product line.

DIRECTOR COMPENSATION

Directors receive no cash compensation for their services as such, however, the
Board of Directors has authorized payment of reasonable expenses incurred by
non-employee directors in connection with attendance at meetings of the Board of
Directors. Further, members of the Company's Board of Director are granted
options to purchase common shares pursuant to the Company's 1999 Stock Option
Plan. During fiscal year 2000, the Company granted options to purchase 30,000
shares of its common stock to both Edward R. Olson and Thomas G. Amon. After the
end of fiscal year 2000, the Board granted Mr. Amon options to purchase an
additional 50,000 shares of common stock for his professional assistance in the
acquisition of Cronus. The Chairman of the Board receives no compensation for
serving in such capacity.


                                       33
<PAGE>   66


SHAREHOLDER RETURN PERFORMANCE GRAPH

The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Stock with that of the
cumulative total return of the NASDAQ Stock Market - US Index ("NASDAQ STOCK
MRKT - US") and the NASDAQ Telecommunications Index ("NASDAQ TELECOM") for the
five year period ended on April 30, 2000. The information below is based on an
investment of $100, on April 30, 1995, in the Company's Common Stock, the NASDAQ
STOCK MRKT - US and the NASDAQ TELECOM. The Company's Management consistently
cautions that the stock price performance shown in the graph below should not be
considered indicative of potential future stock price performance.

The Company's shares are quoted on the OTC Bulletin Board under the symbol
FSCX.OB.

                  COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
                   AMONG FASTCOMM COMMUNICATIONS CORPORATION,
                     THE NASDAQ STOCK MARKET (U.S.) INDEX,
              THE NASDAQ TELECOMMUNICATIONS INDEX AND A PEER GROUP

                                    [GRAPH]


                                       34
<PAGE>   67


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

At July 5, 2000, there were 26,388,699 shares of Common Stock of the Company
issued and outstanding. As of such date, options to purchase 3,351,666 shares of
Common Stock were outstanding.

Each holder of shares of Common Stock, but not holders of unexercised options,
is entitled to one vote per share on each matter, which may be presented at a
meeting of shareholders. Cumulative voting is not allowed. The Company's shares
are quoted on the OTC Bulletin Board under the symbol FSCX. OB.

The following table sets forth information regarding ownership of Common Stock
of the Company at July 5, 2000, by each person who is known by management of the
Company to own beneficially more than five percent of the Common Stock (setting
forth the address of each such person), by each director, by the Named Executive
Officers of the Company identified in "Item 11. Executive Compensation," and by
all directors and Named Executive Officers of the Company as a group. Shares
issuable on exercise of options exercisable within 60 days of July 5, 2000 are
deemed to be outstanding for the purpose of computing the percentage ownership
of persons beneficially owning such warrants or options, but have not been
deemed to be outstanding for the purpose of computing the percentage ownership
of any other person. Except as otherwise indicated, the persons indicated below
have sole voting and investment power with respect to the shares indicated as
owned by them except as otherwise stated in the notes to the table.

<TABLE>
<CAPTION>
                                               Amount and Nature
Name and address of Beneficial Owner        of Beneficial Ownership       Percent of Class
------------------------------------        -----------------------       ----------------
<S>                                         <C>                           <C>
Peter C. Madsen (1)                              2,180,343(2)                   8.12%
     Sterling, Virginia

Edward R. Olson (1)                                 36,666(3)                   0.14%
     Reston, Virginia

Thomas G. Amon (1)                                 102,161(4)                   0.39%
     New York, New York

Mark H. Rafferty (1)                               375,086(5)                   1.40%
     Centreville, Virginia

William A. Grant                                   184,999(6)                   0.70%
     Ashburn, Virginia

Roy Wainwright                                      48,254                      0.18%
     Fairfax, Virginia

Safa Alkateb                                       230,445(7)                   0.87%
     Sterling, Virginia

Darlene Greenhaw                                     8,632                      0.03%
     Fairfax, Virginia

Thomas Colligan                                    403,000(8)                   1.53%
     Irvington, Virginia

Kenneth A. Bloom                                   759,149(9)                   2.87%
     Norwalk, Connecticut

                                                 4,328,735                     11.83%
</TABLE>

1)   Director

2)   Gives effect to 456,666 options owned by Mr. Madsen exercisable within 60
     days

3)   Gives effect to 30,000 options owned by Mr. Olson exercisable within 60
     days


                                       35
<PAGE>   68


4)   6,667 Shares are owned by the Thomas G. Amon Pension and Profit Sharing
     Plans. Gives effect to 83,333 options owned by Mr. Amon exercisable within
     60 days

5)   Gives effect to 331,666 options owned by Mr. Rafferty exercisable within 60
     days

6)   Gives effect to 148,332 options owned by Mr. Grant exercisable within 60
     days

7)   Gives effect to 228,445 options owned by Mr. Alkateb exercisable within 60
     days

8)   Includes 78,000 shares owned by Mr. Colligan's wife

9)   Gives effect to 40,000 options owned by Dr. Bloom exercisable within 60
     days

10)  Percent of Class based upon 26,388,699 shares outstanding at July 5, 2000



The Company is unaware of any arrangement the operation of which could at a
subsequent date result in a change in control of the Company.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


The Company paid the law firm of Sokolow, Dunaud, Mercadier and Carreras LLP
$153,045 in the fiscal year ended April 30, 2000. Thomas G. Amon, a Director of
the Company since December 1994, is a partner in this law firm.

During fiscal year 2000, the Company loaned $50,000, under normal terms and
conditions, to one of its senior officers.

The terms of the transactions described above were negotiated at arms length
such that the terms were as favorable to the Company as could have been obtained
from an unaffiliated third party.

The Company has entered into separate indemnification agreements with each of
its directors and executive officers that may require the Company, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors or officers.


                                       36
<PAGE>   69


                                    PART IV.


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

          (a)(1) and (a)(2) Financial Statements and Schedules.

The financial statements and financial statement schedules filed as a part of
this Report are listed beneath Item 8 of this Report.

          (a)(3) Exhibits.

The exhibits filed as a part of this Report are listed on the Exhibit Index at
page 33 of this Report.

          (b) Reports on Form 8-K.

The Company filed one report on Form 8-K during the fiscal year ended April 30,
2000 announcing the acquisition of Cronus Technology, Inc.


                                       37
<PAGE>   70


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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, on July 31, 2000.


                                             FASTCOMM COMMUNICATIONS CORPORATION


                                             By: /s/ Peter C. Madsen
                                                 -------------------------------
                                                 Peter C. Madsen
                                                 President


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant in
the capacities indicated on July 31, 2000.

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Peter C. Madsen and Mark H. Rafferty, his
attorney-in-fact, with the power of substitution, for him in any and all
capacities, to sign any amendments to this Report on Form 10-K, and to file the
same, with the exhibits thereto and other documents in connection therewith with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney- in-fact, or his substitute or substitutes may do or cause to be
done by virtue hereof.


<TABLE>
<S>                                     <C>
/s/ Peter C. Madsen                     President (Principal Executive Officer)
---------------------------------       and Director
          Peter C Madsen


/s/ Mark H. Rafferty                    Vice President - Finance, Secretary, Treasurer and
---------------------------------       Director
          Mark H. Rafferty              (Principal Financial and Accounting Officer)


/s/ Thomas G. Amon                      Director
---------------------------------
          Thomas G. Amon


/s/ Edward R. Olson                     Director
---------------------------------
          Edward R. Olson
</TABLE>


                                       38
<PAGE>   71



                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO.           DESCRIPTION
-------       -----------
<S>           <C>
3.1*          Amendment to Restated Articles of Incorporation

3.2**         By-laws, as amended

4.1****       Form of Securities Purchase Agreement between the Company and Capital Ventures, International,
              Nelson Partners, Olympus Securities, Ltd. and CC Investments, LDC.

4.2****       Registration Rights Agreement between the Company and Richard L. Apel.

4.3****       Registration Rights Agreement between the Company and Capital Ventures, International, Nelson
              Partners, Olympus Securities, Ltd. and CC Investments, LDC.

4.4****       Form of Convertible Debenture

4.5****       Form of Warrant

4.6****       Proposed Form of Certificate of Designations, Preference and Rights

4.7(d)        Registration Rights Agreement made by FastComm Communications Corporation,
              in favor of the holders of common stock of Cronus Technology, Inc., dated as of
              March 31, 2000

4.8(d)        Form of Registration Rights Agreement between FastComm Communications
              Corporation, in favor of certain individuals and a subordinated debt holder, dated as
              of March 31, 2000.


10.0**        Employment Agreement between the Company and Robert C. Abbott

10.1**        October 15, 1987 License Agreement between
              the Company and Data Race, Inc.

10.2***       February 27, 1991 Lease Agreement between the Company and
              Dulles/Route 28 Limited Partnership with respect to the premises
              at 45472 Holiday Drive, Sterling, VA 22110

10.3***       Employment Agreement between the Company and William Flanagan

10.4***       Technology Transfer Agreement with Sigma Technology

10.5***       Agreement in Principle with Watch Hill Research

10.6***       Technology License Agreement with Protocom Devices

10.7***       Loan Agreement with Sovran Bank
</TABLE>


                                       39
<PAGE>   72


<TABLE>
<S>           <C>
10.8***       Employment Agreement among the Company, Robert N. Dennis and
              Edward R. Olson, as the "Current Directors," and Peter C. Madsen.

10.9***       Option Agreement by the Company in favor of Charles L. Deslaurier.

10.10***      Option Agreement by the Company in favor of Rick Sampley.

10.11***      Amended and Restated Employment Agreement
              between the Company and Robert N. Dennis.

10.12*        Exclusive Master Distribution Agreement for FastComm Products
              between FastComm Communications Corporation and Daitel Technologies

10.13*        Distribution Agreement for products between FastComm Communications
              Corporation and C&L Communications, Inc.

10.14*        Distributor Agreement for FastComm products between FastComm
              Communications Corporation and Tadiran, Ltd.

10.15*        Distribution Agreement between the Company and Sumitronics, Inc.

10.16*        Consulting Agreement between Gary H. Davison and Newbridge Networks Inc.

10.17*        Agreement between the Company and ZyBel Microsystems, Inc.

10.18(a)      Plan of Reorganization Under Chapter 11

10.19(b)      Acquisition Agreement, KG Data Systems, Inc.

10.20(c)      Employment Agreement of Dr. Kenneth A. Bloom

10.21(d)      Agreement and Plan of Reorganization by and among FastComm Communications
              Corporation, Cronus Technology, Inc., Cronus Communications, Inc., and certain
              principal Stockholders, dated as of March 27, 2000.

10.22(d)      Form of Warrant Agreement between FastComm Communications Corporation in
              favor of certain individuals, dated as of March 31, 2000.

10.23(d)      Investment Banking Agreement between FastComm Communications Corporation
              and Kaufman Bros. LLP, dated January 24, 2000.

10.24(d)      Financial Advisor Agreement between FastComm Communications Corporation and
              Kaufman Bros. LLP, dated March 14, 2000.

10.25(d)      Warrant Agreement between FastComm Communications Corporation and Kaufman
              Bros. LLP, dated February 1, 2000.

11.0*         Statement re: Computation of per share earnings.
</TABLE>

----------

*    Filed with revised form 10KA filed August 12, 1994.

**   These exhibits are incorporated by reference from the corresponding
     exhibits to the Company's Form S-18 Registration Statement, SEC File Number
     333-19758.

***  These exhibits are incorporated by reference from the corresponding
     exhibits to the Company's Form S-3 Registration Statement, SEC File No.
     333-43374.

**** These exhibits are incorporated by reference from the corresponding
     exhibits to the Company's Form S-3 Registration Statement, see File No.
     333-26459

(a)  Filed with Form 8K dated April 6, 1999

(b)  Filed with Form 8K dated April 21, 1999

(c)  Filed with Form 8K dated April 21, 1999

(d)  Filed with Form 8K dated April 14, 2000


                                       40