UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                   For the Fiscal Quarter Ended March 31, 1999

                                       or

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

             For the Transition period from _________ to _________.


                         Commission file number: 0-26620


                                   ACCOM, INC.
             (Exact name of registrant as specified in its charter)

           Delaware                                             94-3055907
(State or other jurisdiction of                               (IRS Employer
 incorporation or organization)                           Identification Number)

                               1490 O'Brien Drive
                          Menlo Park, California 94025
                    (Address of principal executive offices)

               Registrant's telephone number, including area code:
                                 (650) 328-3818

         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 at least the past 90 days.

         Yes _X_                                                        No ___

As of May 5, 1999,  10,123,247 shares of the Registrant's  common stock,  $0.001
par value, were outstanding.


<PAGE>


                                   ACCOM, INC.

                 FORM 10-Q For the Quarter Ended March 31, 1999

                                      INDEX

                                                                            Page

         Facing sheet                                                          1
         Index                                                                 2
Part I.  Financial Information (unaudited)
Item 1.  a) Condensed consolidated interim balance sheets at
            March 31, 1999 and December 31, 1998                               3
         b) Condensed consolidated interim statements of
            operations for the three month periods                             4
            ended March 31, 1999 and March 31, 1998
         c) Condensed consolidated interim statements of
            cash flows for the three month periods ended
            March 31, 1999 and March 31, 1998                                  5
         d) Notes to condensed consolidated interim financial statements       6
Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                             8
Item 3   Quantitative and Qualitative Disclosures About Market Risks          13
Part II. Other Information                                                    14
Item 1   Legal Proceedings                                                    14
Item 2   Changes in Securities and Use of Proceeds                            14
Item 3   Defaults Upon Senior Securities                                      14
Item 4   Submission of Matters to a Vote of Security Holders                  14
Item 5   Other Information                                                    14
Item 6   Exhibits and Reports on Form 8-K                                     14
         Signature                                                            16

                                      -2-

<PAGE>


<TABLE>
                                           PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                                                    ACCOM, INC.
                                   CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
                                       (In thousands, except per share data)

<CAPTION>
                                                                                                As of
                                                                                                -----
                                                                                       March 31,       December 31,
                                                                                       ---------       ------------
                                                                                         1999              1998
                                                                                       --------          --------
                                                                                      (Unaudited)         (Note)
<S>                                                                                    <C>               <C>
                                    Assets
Current assets:
     Cash and cash equivalents                                                         $    342          $   --
     Accounts receivable, net                                                             4,476             3,578
     Inventories                                                                          3,847             5,345
     Other current assets                                                                 1,566               535
                                                                                       --------          --------
         Total current assets                                                            10,231             9,458
Property and equipment, net                                                               2,889             3,299
Intangibles, net                                                                          3,111             3,247
Restricted cash                                                                            --               1,132
Other assets                                                                                 77                77
                                                                                       --------          --------
         Total assets                                                                  $ 16,308          $ 17,213
                                                                                       ========          ========

                     Liabilities and Stockholders' Equity
Current liabilities:
     Bank borrowings - line of credit                                                  $   --            $  3,916
     Current portion of notes payable                                                       750               900
     Accounts  payable                                                                    2,035             2,108
     Accrued liabilities                                                                  3,441             3,823
     Customer deposits                                                                    1,291             1,285
     Deferred revenue                                                                        44                87
                                                                                       --------          --------
         Total current liabilities                                                        7,561            12,119
Long-term loans and notes payable, less current portion                                   4,304             1,165
Stockholders' equity:
     Common stock, $0.001 par value; 20,233 shares authorized; 10,123 and 10,121
         shares issued and outstanding on
         March 31, 1999 and December 31, 1998, respectively                              24,197            24,197
        Notes receivable from stockholders                                                 (630)             (630)
     Accumulated deficit                                                                (19,124)          (19,638)
                                                                                       --------          --------
         Total stockholders' equity                                                       4,443             3,929
                                                                                       --------          --------

         Total liabilities and stockholders' equity                                    $ 16,308          $ 17,213
                                                                                       ========          ========

<FN>
Note:    The condensed  consolidated  balance sheet at December 31, 1998,  has been derived from the audited annual
         consolidated balance sheet at that date but does not include all of the information and footnotes required
         by generally accepted accounting principles for a complete consolidated balance sheet.

         The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</FN>
</TABLE>

                                                        -3-

<PAGE>


<TABLE>
                                          ACCOM, INC.
                    CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
                             (In thousands, except per share data)
                                          (Unaudited)

<CAPTION>
                                                                    Three months ended
                                                                    ------------------
                                                                        March 31,
                                                                        ---------
                                                              1999                    1998
                                                            --------                 --------
<S>                                                         <C>                      <C>
Net sales                                                   $  9,538                 $  3,073

Cost of sales                                                  4,059                    1,363
                                                            --------                 --------

Gross profit                                                   5,479                    1,710
                                                            --------                 --------

Operating expenses:
     Research and development                                  1,945                      835
     Marketing and sales                                       2,100                    1,180
     General and administrative                                  807                      306
                                                            --------                 --------

Total operating expenses                                       4,852                    2,321
                                                            --------                 --------

Operating income (loss)                                          627                     (611)

     Interest and other income (expenses), net                  (111)                      40
                                                            --------                 --------

     Income (loss) before provision
       for income taxes                                          516                     (571)

     Provision for income taxes                                    2                        5
                                                            --------                 --------

Net income (loss)                                           $    514                 $   (576)
                                                            ========                 ========

Net income (loss) per share - basic                         $   0.05                 $  (0.09)
                                                            ========                 ========

Net income (loss) per share - diluted                       $   0.05                 $  (0.09)
                                                            ========                 ========
Shares used in computation of net
     Income (loss) per share - basic                          10,122                    6,669
                                                            ========                 ========
Shares used in computation of net
     Income (loss) per share - diluted                        10,422                    6,669
                                                            ========                 ========

<FN>
 The accompanying notes are an integral part of these condensed consolidated interim financial statements.
</FN>
</TABLE>

                                              -4-

<PAGE>


<TABLE>
                                                   ACCOM, INC.
                             CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
                                                  (In thousands)
                                                   (Unaudited)

<CAPTION>
                                                                                          Three Months Ended
                                                                                          ------------------
                                                                                               March 31,
                                                                                               ---------
                                                                                         1999              1998
                                                                                       -------           -------
<S>                                                                                    <C>               <C>
                     Cash flows from operating activities:
Net income (loss)                                                                      $   514           $  (576)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
     Depreciation and amortization                                                         422               145
     Changes in operating assets and liabilities:
         Accounts receivable                                                              (898)              835
         Inventories                                                                     1,498              (608)
         Other current assets                                                           (1,031)               17
         Accounts payable                                                                  (73)             (340)
         Accrued liabilities                                                              (382)              (45)
         Customer deposits                                                                   6                 7
         Deferred revenue                                                                  (43)              (28)
                                                                                       -------           -------
           Net cash provided by (used in) operating activities                              13              (593)
                                                                                       -------           -------

                     Cash flows from investing activities:
Expenditures for property and equipment                                                    (36)             (161)
Proceeds from disposal of property and equipment                                           160              --
                                                                                       -------           -------
           Net cash provided by (used in) investing activities                             124              (161)
                                                                                       -------           -------

                     Cash flows from financing activities:
Repayment of line of credit                                                             (3,916)             --
Repayment of notes payable                                                                (300)              (10)
Proceeds from long-term notes                                                            3,289              --
Issuance of common stock                                                                  --                  11
Restricted cash                                                                          1,132              --
                                                                                       -------           -------
           Net cash provided by financing activities                                       205                 1
                                                                                       -------           -------

Net increase (decrease) in cash and cash equivalents                                       342              (753)
Cash and cash equivalents at beginning of period                                          --               5,640
                                                                                       -------           -------
           Cash and cash equivalents at end of period                                  $   342           $ 4,887
                                                                                       =======           =======

<FN>
     The accompanying notes are an integral part of these condensed consolidated interim financial statements
</FN>
</TABLE>

                                                       -5-

<PAGE>


          NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  Basis of Preparation

         The condensed  consolidated interim balance sheet as of March 31, 1999,
and the condensed  consolidated  interim statements of operations and cash flows
for the three month periods ended March 31, 1999 and 1998, have been prepared by
the Company and are  unaudited.  In the opinion of management,  all  adjustments
(consisting  of normal  accruals)  necessary  to present  fairly  the  financial
position as March 31, 1999 and the results of operations  and cash for the three
month periods ended March 31, 1999 and 1998, have been made.

         These condensed  consolidated  interim  financial  statements should be
reviewed  in  conjunction  with  the  audited   consolidated   annual  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the three months ended December 31, 1998. The results of operations for
the three month periods ended March 31, 1999, are not necessarily  indicative of
the operating results for any future period.


Note 2.  Comprehensive Income

         Comprehensive income is equal to net income for the three month periods
ended March 31, 1999 and 1998.


Note 3.  Inventories

         Inventories consist of the following (in thousands):

                                                    March 31,     December 31,
                                                    ---------     ------------
                                                      1999            1998
                                                     ------          ------
Purchased parts and materials                        $1,261          $2,399
Work-in-process                                         150             394
Finished goods                                          114             151
Demonstration inventory                               2,322           2,401
                                                     ------          ------
                                                     $3,847          $5,345
                                                     ======          ======


Note 4.  Debt

         The  Company  has a  revolving  line of credit  with  LaSalle  Business
Credit,  Inc.  ("LBC") that allows for borrowings up to $7.5 million  subject to
the level of eligible  accounts  receivable and the levels of certain  inventory
items. As of March 31, 1999, the Company had  availability of $2.5 million under
the line. There were no borrowings outstanding under this line of credit.

         Indebtedness  under the line of credit accrues  interest at LBC's prime
rate plus 125 basis points. The term of the original agreement which established
the line of credit is three years and is renewable on a yearly basis thereafter.
The revolving loans are secured by all assets of the Company.

         Borrowings  under  the line are  subject  to  compliance  with  certain
financial  covenants.   The  Company  is  currently  in  compliance  with  these
covenants.

         On March 12, 1999,  the Company  completed a private  placement of $3.5
million in senior subordinated  convertible notes with a group of investors. The
notes  have a coupon  rate of 6% per  year,  mature  in the year  2004,  and are
convertible,  at any time, into shares of Accom common stock at a price of $1.30
per share.  The  proceeds  from  these  notes were used to repay the LBC line of
credit.

                                      -6-

<PAGE>


         In conjunction with the sale of convertible  notes, the Company and the
investors  entered into an  Investors  Rights  Agreement.  The  Investors  Right
Agreement grants the investors,  among other things, certain rights with respect
to the common stock of the Company issuable upon conversion of the notes.

         The  Company has two  subordinated  promissory  notes of  $750,000  and
$1,315,000 issued to Scitex as partial consideration for the purchase of certain
assets and  liabilities  and the business of Scitex  Digital  Video in December,
1998.  The first note is due in April,  2000.  Principal is to be paid  together
with  interest  in arrears on the unpaid  principal  balance at a variable  rate
equal to the  Merrill  Lynch Money  Market  Rate.  The second  note  consists of
$900,000  due in 1999 and  $415,000  due in 2000.  Payments  are to be made on a
quarterly  basis  starting on March 31, 1999.  Principal is to be paid  together
with  interest in arrears on the unpaid  principal  balance at an annual rate of
10%,  increasing by 100 basis points at the  beginning of every fiscal  quarter,
starting  July 1, 1999.  During the quarter  ended March 31,  1999,  the Company
repaid $300,000 under the latter promissory note.

Note 5.  Net Income (Loss) Per Share

<TABLE>
         The following table sets forth the computation of basis and diluted net
income (loss) per share (in thousands, except for per share amounts):

<CAPTION>
                                                                                        For the Three Months Ended
                                                                                        --------------------------
                                                                                                 March 31,
                                                                                                 ---------
                                                                                           1999            1998
                                                                                          -------         -------
<S>                                                                                       <C>             <C>
Net income (loss)                                                                         $   514         $  (576)
                                                                                          -------         -------
Shares used in computing basic net income (loss) per share                                 10,122           6,669
                                                                                          -------         -------
Basic net income (loss) per share                                                         $  0.05         $ (0.09)
                                                                                          -------         -------
Calculation of shares  outstanding  for computing  diluted net income (loss) per
share:
  Shares used in computing basic net income (loss) per share                               10,122           6,669
  Shares used to reflect the effect of the assumed conversion of:
       Employee stock options                                                                 300            --
                                                                                          -------         -------
Shares used in computing fully-diluted net income (loss) per share                         10,422           6,669
                                                                                          -------         -------
Diluted net income (loss) per share                                                       $  0.05         $ (0.09)
                                                                                          -------         -------
</TABLE>


Note 6.  Segment Information

Management  has organized the business into four market  sub-segments  under one
industry   segment   which   includes   activities   relating  to   development,
manufacturing  and marketing of digital  video  equipment.  The chief  operating
decision maker relies primarily on revenue to assess market segment performance.
The following table presents revenue by market (in thousands):


                                                      For the Three Months Ended
                                                      --------------------------
                                                                March 31,
                                                                ---------
        Market                                          1999               1998
        ------                                         ------             ------
Production                                             $1,224             $1,838
Post Production                                         5,379                935
Distribution                                            1,887                 68
Other                                                   1,048                232
                                                       ------             ------
                                                       $9,538             $3,073
                                                       ======             ======

Substantially all of the Company's assets are in the United States. All sales to
external customers are accepted and approved in the United States.

                                      -7-

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

         The  following  Management's   Discussion  and  Analysis  of  Financial
Condition  and  Results of  Operations  should be read in  conjunction  with the
Company's  Consolidated  Financial  Statements  as  of  December  31,  1998  and
September 30, 1998 and 1997 and for the  three-month  periods ended December 31,
1998 and 1997 and the  twelve-month  periods ended September 30, 1998, 1997, and
1996, included in its Transition Report on Form 10-K for the
Transition Period from October 1, 1998 to December 31, 1998.

         Additionally,  the following  Management's  Discussion  and Analysis of
Financial Condition and Results of Operations  contains certain  forward-looking
statements.  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
the  Company's  Transition  Report on Form 10-K for the  Transition  Period from
October 1, 1998 to  December  31,  1998,  under the  sections in Item 1 entitled
"Manufacturing and Suppliers," "Competition,"  "Proprietary Rights and Licenses"
and  "Additional  Factors  That May  Affect  Future  Results,"  as well as other
factors,  could affect future  results and have  affected the  Company's  actual
results in the past and could cause the  Company's  results for future  years or
quarters  to differ  materially  from  those  expressed  in any  forward-looking
statements made by or on behalf of the Company,  including  without  limitation,
those  contained  in  this  10-Q  report.   Forward-looking  statements  can  be
identified  by   forward-looking   words  such  as  "may,"   "will,"   "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words.

Overview

         Accom  designs,  manufactures,  sells,  and supports a complete line of
digital video signal processing,  editing,  and disk recording,  and virtual set
tools,  primarily  for  the  worldwide,   professional  video  production,  post
production   and  live   broadcasting,   and  computer   video   production  and
post-production,  marketplaces. The Company's systems are designed to be used by
video  professionals  to create,  edit and broadcast  high quality video content
such as television shows, commercials, news, music videos and video games.
<TABLE>
         The following table  summarizes the Company's  products and the primary
marketplaces they address:
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
           MARKETS / Product                                         Primary Applications
----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>
PRODUCTION:
----------------------------------------------------------------------------------------------------------------------------------
Virtual Set Production Tools
----------------------------------------------------------------------------------------------------------------------------------
     ELSET(R) Virtual Set                    Virtual sets for high-end video content creation Production in real time
----------------------------------------------------------------------------------------------------------------------------------
Computer Graphics and Animation
Digital Disk Recorders
----------------------------------------------------------------------------------------------------------------------------------
     WSD(R)/2Xtreme                         Desktop computer graphics and animation production
----------------------------------------------------------------------------------------------------------------------------------
POST PRODUCTION:
----------------------------------------------------------------------------------------------------------------------------------
Digital Signal Processors
----------------------------------------------------------------------------------------------------------------------------------
     8150 Digital Switcher                   Digital  switcher for on-line post  production  editing for commercials and long form
                                             television programs
----------------------------------------------------------------------------------------------------------------------------------
Digital Editors
----------------------------------------------------------------------------------------------------------------------------------
     Axial(R) 3000                           Edit  controller for on-line post  production  editing for  commercials and long form
                                             television programs

     Sphere family of products               Integrated  non-linear  editing  workstation  for long and short  form  programs  and
                                             commercials
----------------------------------------------------------------------------------------------------------------------------------
Video Digital Disk Recorders
----------------------------------------------------------------------------------------------------------------------------------
     APR(TM)/Attache                         On-line  post  production  editing and effects  and on-air  playback of graphics  for
                                             broadcast
----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION:
----------------------------------------------------------------------------------------------------------------------------------
     Digital Signal Processors
----------------------------------------------------------------------------------------------------------------------------------
          Dveous(TM) and Brutus              Digital Video  Effects  systems for news and sports
----------------------------------------------------------------------------------------------------------------------------------
     Digital News Graphics and Clip Servers
----------------------------------------------------------------------------------------------------------------------------------
          Axess(TM)                          Creation and broadcast distribution of news graphics and short video segments
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                                      -8-
<PAGE>


         The Company's  revenues are currently  derived  primarily  from product
sales.  The Company  generally  recognizes  revenue  upon product  shipment.  If
significant  obligations exist at the time of shipment,  revenue  recognition is
deferred until obligations are met.

         The Company's gross margin has historically  fluctuated from quarter to
quarter.  Gross  margins  are  dependent  on the mix of higher and  lower-priced
products  having  various gross margin  percentages  and the percentage of sales
made through direct and indirect distribution channels.

Results of Operations

Three Months Ended March 31, 1999 and March 31, 1998

<TABLE>
         The  following  table  presents the  Company's  Condensed  Consolidated
Interim  Statements of Operations  for the three months ended March 31, 1999 and
1998 as reported (dollar amounts in thousands, except per share data):

<CAPTION>
                                                           Three Months Ended
                                                           ------------------
                                                                March 31,                 Increase (Decrease)
                                                                ---------                 -------------------
                                                         1999             1998             Amount         Percent
                                                        -------          -------          -------         -------
<S>                                                     <C>              <C>              <C>                <C>
Net sales                                               $ 9,538          $ 3,073          $ 6,465            210.4%
Cost of sales                                             4,059            1,363            2,696            197.8%
                                                        -------          -------          -------            -----
     Gross profit                                         5,479            1,710            3,769            220.4%
Operating expenses:
  Research and development                                1,945              835            1,110            132.9%
  Marketing and sales                                     2,100            1,180              920             78.0%
  General and administrative                                807              306              501            163.7%
                                                        -------          -------          -------            -----
  Total operating expenses                                4,852            2,321            2,531            109.0%
                                                        -------          -------          -------            -----
Operating income (loss)                                     627             (611)           1,238            202.6%
Interest and other income (expenses), net                  (111)              40             (151)          (377.5%)
                                                        -------          -------          -------            -----
Income (loss) before provision for income taxes             516             (571)           1,087            190.4%
Provision for income taxes                                    2                5               (3)           (60.0%)
                                                        -------          -------          -------            -----
Net income (loss)                                       $   514          $  (576)           1,090            189.2%
                                                        =======          =======          =======            =====
</TABLE>
         The  following  table  presents the  Company's  Condensed  Consolidated
Interim  Statements of Operations  for the three months ended March 31, 1999 and
1998, as a percentage of net sales, as reported:

                                                  Three Months Ended
                                                  ------------------
                                                       March 31,       Increase
                                                       ---------       --------
                                                   1999        1998   (Decrease)
                                                   ----        ----   ----------
Net sales                                          100.0%    100.0%     0.0%
Cost of sales                                       42.6%     44.3%    (1.7)%
                                                   -----     -----    -----
           Gross margin                             57.4%     55.7%     1.7%
Operating expenses:
     Research and development                       20.4%     27.2%    (6.8)%
     Marketing and sales                            22.0%     38.4%   (16.4)%
     General and administrative                      8.4%     10.0%    (1.6)%
                                                   -----     -----    -----
     Total operating expenses                       50.8%     75.6%   (24.8)%
                                                   -----     -----    -----
Operating income (loss)                              6.6%    (19.9)%   26.5%
Interest and other income (expenses),  net          (1.2)%     1.3%    (2.5)%
                                                   -----     -----    -----
Income (loss) before provision for income taxes      5.4%    (18.6)%   24.0%
Provision for income taxes                           --        0.1%   (0.1)%
                                                   -----     -----    -----
Net income (loss)                                    5.4%    (18.7)%   24.1%
                                                   =====     =====    =====


         Net sales.  The  increase in net sales  during the three  months  ended
March 31,  1999,  from levels for the same period in 1998 was  primarily  due to
increased sales in the post production and distribution

                                      -9-

<PAGE>


marketplaces as well as increased customer service revenues. The increased sales
resulted  largely from sales from product lines  acquired in the Scitex  Digital
Video acquisition. International sales for the three months ended March 31, 1999
and 1998, represented 34.4% and 50.5% of net sales, respectively.

         The  following  table  presents net sales  dollar  volume for the three
months ended March 31, 1999 and 1998, by market and related percentages of total
net sales (dollar amounts in thousands):

                                              Three Months Ended
                                              ------------------
                                                   March 31,
                                                   ---------
                                        1999                        1998
                                        ----                        ----
       Marketplace             Amount         Percent     Amount         Percent
       -----------             ------         -------     ------         -------
Production                     $1,224           12.8%     $1,838           59.8%
Post Production                 5,379           56.4%        935           30.4%
Distribution                    1,887           19.8%         68            2.2%
Other                           1,048           11.0%        232            7.6%
                               ------          -----      ------          -----
                               $9,538          100.0%     $3,073          100.0%
                               ======          =====      ======          =====

         Cost of sales.  Cost of sales, as a percentage of sales,  decreased for
the three months  ended March 31,  1999,  from levels for the three months ended
March 31, 1998, as a result of increased  overall sales and a higher  proportion
of higher-margin, customer service sales.

         Research and  development.  Research and  development  expenses for the
three months ended March 31, 1999,  increased over levels for the same period in
1998 primarily due to increases in headcount, consultant expenses, and materials
and services related to specific project development.  The increase in headcount
was primarily a result of the acquisition of the Scitex Digital Video assets and
business in December, 1998.

         Marketing and sales.  Marketing and sales expenses for the three months
ended March 31, 1999  increased over levels for the three months ended March 31,
1998,  primarily due to increases in headcount and related overhead expenses and
sales commission  expenses.  The increase in headcount was primarily a result of
the  acquisition  of the Scitex  Digital  Video assets and business in December,
1998.

         General and administrative.  The increase in general and administrative
expenses  for the three  months  ended  March 31,  1999 from levels for the same
period in 1998 was primarily due to increases in headcount,  professional  fees,
and  amortization  of  intangibles.  The increase in headcount  was  primarily a
result of the  acquisition  of the Scitex  Digital  Video assets and business in
December, 1998.

         Interest and other income, net. Interest and other income, net, for the
three months ended March 31,  1999,  decreased  over levels for the three months
ended  March 31,  1998,  due to a  decrease  in the  levels  of  interest-paying
investments  as well as an  increase  in debt  taken  on,  in part,  to fund the
acquisition of the Scitex Digital Video assets and business.

         Provision for income  taxes.  For the three months ended March 31, 1999
and 1998, the Company was in a net operating loss carryforward position.

                                      -10-

<PAGE>


Liquidity and Capital Resources

         Since   inception,   the  Company  has  financed  its   operations  and
expenditures  for  property  and  equipment  through the sale of capital  stock,
borrowings under a bank line of credit and term loans. As of March 31, 1998, the
Company had $342,000 of cash and cash equivalents.

         Operating  activities  provided $13,000 in net cash in the three months
ended March 31,  1999,  and used  $593,000 in net cash in the three months ended
March 31, 1998.  Net cash provided by operations in the three months ended March
31, 1999, was due primarily to net income and a decrease in  inventories  offset
primarily  by an increase  in  accounts  receivable  and other  current  assets.
Proceeds  from  long-term  loans,  together  with  cash  provided  by  operating
activities,  were used in  financing  activities  for the  repayment  of amounts
borrowed  previously under a line of credit.  Net cash used by operations in the
three months ended March 31, 1998 was primarily due to the net loss, an increase
in  inventories,  and a  decrease  in  accounts  payable  partially  offset by a
decrease  in  accounts  receivable.   Additional  cash  was  used  in  investing
activities for the purchase of property and equipment.

         On December 10,  1998,  the Company  signed an  agreement  with LaSalle
Business  Credit,  Inc., a member of the ABN AMRO group, for a revolving line of
credit for up to $7.5 million.  The agreement was amended on March 11, 1999. The
credit line is secured by all the assets of the Company.  The availability under
this line is primarily  calculated  based on eligible  accounts  receivable  and
certain  inventory  items.  Borrowings  under the line are  subject  to  certain
financial  covenants  and, as of March 31, 1999,  the Company was in  compliance
with these  covenants.  As of March 31,  1999,  the  Company  had no  borrowings
outstanding under the line.

         On March 12, 1999,  the Company  completed a private  placement of $3.5
million in senior subordinated  convertible notes with a group of investors. The
notes have a coupon rate of 6% per year, mature in 2004, and are convertible, at
any time,  into  shares  of Accom  common  stock at a price of $1.30 per  share.
Proceeds from the private  placement were used to partially  repay the revolving
line of credit.

         Based on current revenue levels, the Company believes that its existing
cash and cash equivalents  will be sufficient to meet its cash  requirements for
at least the next twelve months.  Although operating activities may provide cash
in certain periods, to the extent the Company grows in the future, its operating
and investing activities may use cash and, consequently, such growth may require
the Company to obtain additional sources of financing. There can be no assurance
that any  necessary  additional  financing  will be  available to the Company on
commercially reasonable terms, if at all.

Status of Progress in Becoming Year 2000 Compatible

         The "Year 2000 Issue" is typically the result of software being written
using two  digits  rather  than  four to  define  the  applicable  year.  If the
Company's  software with  date-sensitive  functions are not Year 2000 compliant,
they may recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations  causing disruptions of
operations,  including,  among  other  things,  interruptions  in  manufacturing
operations,  a temporary inability to process  transactions,  send invoices,  or
engage in similar normal business activities.

         The Company has made a preliminary  review of the most  pertinent  Year
2000 issues which have been  identified as potentially  having a material impact
on the Company's operations and financial condition. More comprehensive study in
certain areas is still to be undertaken.

         The Company  has  identified  three areas  relating to Year 2000 issues
which may materially affect the Company's business:  1) Information  Technology,
addressing  internal software and business systems;  2) the Company's  Products;
and 3) Third Party, addressing the preparedness of suppliers.

                                      -11-

<PAGE>


         Information  Technology Program:  Internal applications systems such as
inventory and  financial  accounting  software,  computer  network  hardware and
software,  and software  applications programs may have Year 2000 problems. As a
result of the  acquisition  of Scitex  Digital Video (SDV) on December 10, 1998,
the  Company  decided to use the Man-Man  software  already in use at SDV as its
main inventory and accounting software. The Man-Man software currently in use is
version 10.2 which is not Year 2000 compliant.  Version 11.3, an upgrade of this
software, is Year 2000 compliant and has been procured by the Company by renewal
of its  Man-Man  license  at a cost of  $67,000.  Total cost to  implement  this
upgrade is estimated to be less than  $100,000.  As of March 31, 1999,  at least
$20,000 of expected  costs had been  identified  which related to replacement of
software  applications  and  operating  systems  (which  currently  are  readily
available for licensing by the Company) which the Company  anticipates will take
place in the third quarter of 1999. Related to these software upgrades, hardware
on certain  computers may also need to be replaced to make them  compatible with
the upgraded software. The estimated cost of replacing such hardware is $50,000.
If required  modifications to existing  software and hardware and conversions to
new software are not made,  or are not  completed in a timely way, the Year 2000
Issue could have a material  impact on the  operations of the Company due to the
inability to accurately  and  effectively  track  inventory and other  financial
results.

         Product Readiness Program: Certain products the Company sells have been
identified to have Year 2000  problems  which must be corrected to permit smooth
operation by the user. The Year 2000 solution consists of software changes which
will be transmitted to customers by way of CD-ROMs and floppy diskettes. Certain
of these changes have been completed and  transmitted to customers;  others have
been completed but not yet  transmitted to customers,  but should be transmitted
in the first half of 1999. The Company  believes the costs associated with these
activities  will be immaterial  given the  relatively  low cost of the media and
small amount of internal  labor that will be utilized.  The Company is currently
assessing its exposure to  contingencies  related to the Year 2000 Issue for the
products  it has sold;  however,  it does not  expect  these to have a  material
impact on the operations of the Company.

         Third  Party  Program:  The Company  relies on numerous  vendors in the
course of operating the business.  If these vendors encounter Year 2000 problems
which impact  their  ability to deliver  goods and services to the Company,  the
Company's business might be materially and adversely  affected.  The Company has
not to date conducted a  comprehensive  survey of its vendors to determine their
Year 2000  readiness,  but  anticipates  doing so in the first half of 1999. The
Company has not yet determined the extent to which the Company's  operations are
vulnerable  to those third  parties'  failure to  remediate  their own Year 2000
issues. In order to protect against the acquisition of additional  non-compliant
products,  the Company will require that certain hardware and software suppliers
providing  goods and  services to the Company  after June,  1999,  warrant  that
products sold or licensed to the Company are Year 2000 compliant.  Finally,  the
Company is also  vulnerable  to  external  forces  that might  generally  affect
industry  and  commerce,  such as utility or  transportation  company  Year 2000
compliance failures and related service interruptions.

         The Company anticipates addressing and remedying the critical Year 2000
issues by the third quarter of 1999, which is prior to any anticipated impact on
its operating  systems and expects the Year 2000 project to continue  beyond the
year 2000 with respect to resolution  of  non-critical  issues.  These dates are
contingent  upon the timeliness  and accuracy of software and hardware  upgrades
from vendors,  adequacy and quality of resources available to work on completion
of the project and any other unforeseen factors.  There can be no assurance that
the Company  will be  successful  in its efforts to resolve any Year 2000 issues
and to  continue  operations  in the year 2000.  The  failure of the  Company to
successfully  resolve  such issues  could result in a shutdown of some or all of
the  Company's  operations,  which would have a material  adverse  effect on the
Company.

                                      -12-

<PAGE>


Contingency Plans.

         The  Company  has not  yet  developed  a  contingency  plan to  address
situations  that may  result  if the  Company  is unable  to  achieve  Year 2000
readiness of its critical  operations  but  anticipates  developing  such a plan
during the third  quarter of 1999.  There can be no  assurance  that the Company
will be able to develop a contingency  plan that will adequately  address issues
that may arise in the year  2000.  The  failure of the  Company  to develop  and
implement,  if necessary,  an appropriate contingency plan could have a material
impact on the operations of the Company.

Costs.

         The total expense of the Year 2000 project is currently estimated to be
less than approximately $200,000 which is not material to the Company's business
operations or financial  condition.  The Company has not yet fully estimated all
the Year 2000 costs,  in particular,  those  associated  with the replacement of
software running on personal  computers and the costs of modifying,  testing and
distributing  updates to ensure its own  products are Year 2000  compliant.  The
amount incurred to date was not material.

         There can be no assurance  that these costs will not be material to the
Company  or that the  Company  will be able to  resolve  in a timely  manner any
issues that may arise in these areas.  The expenses of the Year 2000 project are
being funded through operating cash flows.

         The costs of the project and the date on which the Company  believes it
will  complete  the Year  2000  modifications  are  based on  management's  best
estimates,  which were derived utilizing numerous  assumptions of future events,
including  the  continued   availability  of  certain   resources,   third-party
modification  plans and other  factors.  There can be no  assurance  that  these
estimates will be achieved and actual results could differ materially from those
anticipated.


Item 3.  Quantitative and Qualitative Disclosures About Market Risks

         Accom  develops  its  technology  in the  United  States  and sells its
products primarily in North America,  Europe, and the Far East. As a result, the
Company's  financial  results  could be affected  by factors  such as changes in
foreign currency exchange rates or weak economic  conditions in foreign markets.
As  all  of  the  Company's  sales  are  currently  made  in  U.S.  dollars,   a
strengthening  of the dollar could make the Company's  products less competitive
in foreign markets.  The Company's  interest expense on short-term notes payable
and  long-term  loans and notes  payable are sensitive to changes in the general
level of interest rates.  Due to the nature of the Company's  debts, the Company
has  concluded  that  there is  currently  no  material  market  risk  exposure.
Therefore, no quantitative tabular disclosures have been presented.

                                      -13-

<PAGE>


                           Part II. Other Information

Item 1. Legal Proceedings

None.


Item 2. Changes in Securities and Use of Proceeds

None.


Item 3. Defaults Upon Senior Securities

None.


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

None.


Item 5. Other Information

None.


Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits.

         4.6*  Amendment No. 4 to Preferred Shares Rights Agreement, dated as of
               May  4,  1999,  between  the  Company  and  U.S.  Stock  Transfer
               Corporation

        27.1   Financial Data Schedule (EDGAR filed version only)

        *Incorporated  by  reference  to an  exhibit  filed  with the  Company's
        Amendment  No. 3 to  Registration  Statement  on Form  8-A/A  (File  No.
        0-26620), filed on May 7, 1999.

(b) Reports on Form 8-K.

        On December 23, 1998,  the Company filed a Current Report on Form 8-K to
        report the Company's  acquisition of the assets of Scitex Digital Video,
        Inc.  ("Scitex")  and  certain  of  Scitex's  affiliates  as well as the
        details  of  the  financing  the  Company   obtained   related  to  such
        acquisition,  including a loan agreement and a sale of common stock. The
        Company did not file the audited historical  financial statements of the
        acquired business and the pro forma financial statements of the combined
        businesses  required to be filed as an  amendment to the Form 8-K within
        60 days after the original filing due date because the audited financial
        statements for Scitex Digital Video did not exist. The Company currently
        is in the  process  of  arranging  for the  preparation  of the  audited
        financials  of  Scitex   Digital  Video  and  will  file  the  financial
        statements  required by such Form 8-K as soon as  practicable  after the
        audit is complete.

        On March 26,  1999,  the Company  filed a Current  Report on Form 8-K to
        report the  issuance  of senior  subordinated  convertible  notes in the
        aggregate principal amount of $3,500,000 (the "notes") to a group of six
        investors led by American Bankers Insurance Group, Inc. The notes

                                      -14-

<PAGE>


        mature on March 12, 2004 and bear  interest at the rate of 6% per annum,
        payable  quarterly  beginning  on June 30,  1999.  The Company  used the
        proceeds   from  the  issuance  of  the  notes  for  the   repayment  of
        indebtedness.  The notes are  convertible  into shares of the  Company's
        common  stock at any time at the  option of the  holders.  The number of
        shares of the Company's  common stock to be received upon  conversion is
        calculated by dividing the outstanding  principal amount of the notes by
        a conversion price of $1.30, subject to certain adjustments.

                                      -15-

<PAGE>


                                    SIGNATURE

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


         ACCOM, INC.


         By: /s/  JUNAID SHEIKH
             ----------------------------
                   (Junaid Sheikh)
         Chairman, President and Chief Executive Officer
         (Principal Executive Officer)


         By: /s/  DONALD K. McCAULEY
             ----------------------------
                  (Donald K. McCauley)
         Senior Vice President, Finance and Chief Financial Officer
         (Principal Financial and Accounting Officer)


         Date:  May 13, 1999

                                      -16-