<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

                  For The Quarterly Period Ended:    MAY 31, 1999

         [ ]      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: 0-14779

                                 MEDIA 100 INC.
             -------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            DELAWARE                                          04-2532613
--------------------------------------------            -----------------------
(State or other jurisdiction of organization                (I.R.S. Employer
    or incorporation)                                   Identification Number)


                           290 DONALD LYNCH BOULEVARD
                           MARLBOROUGH, MASSACHUSETTS
                    ----------------------------------------
                    (Address of principal executive offices)

                                   01752-4748
                    ----------------------------------------
                                   (Zip code)

                                 (508) 460-1600
                    ----------------------------------------
              (Registrant's telephone number, including area code)



          Indicate by check mark whether the registrant (1) has filed all
          reports required to be filed by Section 13 or 15(d) of the Securities
          Exchange Act of 1934 during the preceding 12 months (or for such
          shorter period that the registrant was required to file such reports),
          and (2) has been subject to such filing requirements for the past 90
          days.

                Yes    /X/                  No    / /

          Indicate the number of shares outstanding of each of the issuer's
     classes of common stock, as of the latest practicable date.

COMMON STOCK, PAR VALUE $.01 PER SHARE             8,306,486 SHARES
--------------------------------------      ------------------------------------
             Class                              Outstanding at June 30, 1999



<PAGE>


                         MEDIA 100 INC. AND SUBSIDIARIES



                                      INDEX
<TABLE>
<CAPTION>
                                                                                     PAGE
                                                                                    NUMBER
                                                                                    ------
<S>                                                                                <C>
PART I - FINANCIAL INFORMATION
    ITEM 1      Consolidated Financial Statements:
                Consolidated Balance Sheets as of
                   May 31, 1999 and November 30, 1998                                 3

                Consolidated Statements of Operations for the three and
                   six months ended May 31, 1999 and  May 31, 1998                    4

                Consolidated Statements of Cash Flows for the six
                   months ended May 31, 1999 and May 31, 1998                         5

                Notes to Consolidated Financial Statements                          6 - 9

    ITEM 2      Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                             10 - 16


PART II - OTHER INFORMATION
    ITEM 1      Legal Proceedings                                                     17

    ITEM 4      Submission of Matters to a vote of Security Holders                   17

    ITEM 6      Exhibits and Reports on Form 8-K                                      18

SIGNATURES                                                                            19

EXHIBIT INDEX                                                                         20
</TABLE>

                                       2

<PAGE>


                         PART I - FINANCIAL INFORMATION

                         MEDIA 100 INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                    May 31,   November 30,
                                                                                       1999        1998
                                                                                   --------    --------
                                                                                 (unaudited)
<S>                                                                                <C>         <C>
ASSETS
Current assets:
               Cash and cash equivalents                                           $  6,760    $  7,249
               Marketable securities                                                 21,165      25,185
               Accounts receivable, net of allowance for doubtful
                 accounts of $374 in 1999 and $395 in 1998                            5,825       5,372
               Income tax refund receivable                                             280         280
               Inventories                                                            1,726         967
               Prepaid expenses                                                         865         743
                                                                                   --------    --------
                    Total current assets                                             36,621      39,796

Equipment, net                                                                        7,706       8,363

Other assets, net                                                                       283         313

                                                                                   --------    --------
Total assets                                                                       $ 44,610    $ 48,472
                                                                                   --------    --------
                                                                                   --------    --------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
               Accounts payable                                                    $  2,031    $  2,259
               Accrued expenses                                                       7,338       9,692
               Deferred revenue                                                       5,851       6,048
                                                                                   --------    --------
                    Total current liabilities                                        15,220      17,999

Contingencies (Note 8)                                                                 --          --

Stockholders' equity:
               Preferred stock                                                         --          --
               Common stock                                                              84          83
               Capital in excess of par value                                        41,130      40,917
               Accumulated deficit                                                  (11,110)    (10,598)
               Cumulative translation adjustment                                       (222)        (37)
               Treasury stock, at cost                                                 (399)       (163)
               Unrealized holding gain (loss) on
                  available for sale securities                                         (93)        271
                                                                                   --------    --------

                    Total stockholders' equity                                       29,390      30,473
                                                                                   --------    --------

Total liabilities and stockholders' equity                                         $ 44,610    $ 48,472
                                                                                   --------    --------
                                                                                   --------    --------

</TABLE>

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

                                       3

<PAGE>




                         MEDIA 100 INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

                                   (unaudited)
<TABLE>
<CAPTION>


                                                       Three Months Ended May 31,     Six Months Ended May 31,
(in thousands, except per share data)                        1999        1998                1999        1998
                                                         --------    --------           ---------    --------

<S>                                                      <C>         <C>                 <C>          <C>
Net sales:
   Products                                              $ 10,400    $  7,940            $ 20,404    $ 16,871
   Services                                                 2,137       1,697               4,272       3,287
                                                         --------    --------            --------     -------
Total net sales                                            12,537       9,637              24,676      20,158

Cost of sales                                               4,863       4,026               9,627       8,345
                                                         --------    --------            --------     -------

        Gross profit                                        7,674       5,611              15,049      11,813
                                                         --------    --------            --------     -------

Operating expenses:
     Research and development                               3,142       4,774               7,136       7,765
     Selling and marketing                                  3,759       3,473               7,288       6,909
     General and administrative                               935       1,130               1,868       2,070
                                                         --------    --------            --------     -------
        Total operating expenses                            7,836       9,377              16,292      16,744
                                                         --------    --------            --------     -------

     Operating loss                                          (162)     (3,766)             (1,243)     (4,931)

Interest income                                               339         416                 731         841
                                                         --------    --------            --------     -------

     Income (loss) before tax
        provision                                             177      (3,350)               (512)     (4,090)

Tax provision                                                --          --                  --            12
                                                         --------    --------            --------     -------

        Net income (loss)                                $    177    $ (3,350)           $   (512)   $ (4,102)
                                                         --------    --------            --------     -------
                                                         --------    --------            --------     -------
Net Income (loss) per share:

   Basic                                                 $    .02    $   (.41)           $   (.06)    $  (.50)
                                                         --------    --------            --------     -------
                                                         --------    --------            --------     -------

   Diluted                                               $    .02    $   (.41)           $   (.06)    $  (.50)
                                                         --------    --------            --------     -------
                                                         --------    --------            --------     -------

Weighted average common shares outstanding:

   Basic                                                    8,300       8,258               8,296       8,245
                                                         --------    --------            --------     -------
                                                         --------    --------            --------     -------

  Diluted                                                   8,609       8,258               8,296       8,245
                                                         --------    --------            --------     -------
                                                         --------    --------            --------     -------
</TABLE>



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

                                       4

<PAGE>


                         MEDIA 100 INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (in thousands)

                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                            Six Months Ended May 31,
                                                                                                1999        1998
                                                                                            --------    --------
<S>                                                                                         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                                  $   (512)   $ (4,102)
  Adjustments to reconcile net loss to net cash
   (used in) provided by operating activities
                Depreciation and amortization                                                  1,753       1,333
                Gain on sale of marketable securities                                            (16)        (11)

  Changes in assets and liabilities
                Accounts receivable                                                             (453)      1,842
                Inventories                                                                     (759)         35
                Prepaid expenses                                                                (122)         88
                Accounts payable                                                                (228)       (294)
                Accrued expenses                                                              (2,354)      2,376
                Deferred revenue                                                                (197)      1,260
                                                                                            --------    --------

  Net cash (used in) provided by operating activities                                       $ (2,888)   $  2,527
                                                                                            --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
                Purchases of equipment, net                                                   (1,096)     (1,923)
                Other assets                                                                      30        --
                Purchases of marketable securities                                           (22,407)    (60,319)
                Proceeds from sales of marketable securities                                  26,079      58,430
                                                                                            --------    --------

  Net cash provided by (used in) investing activities                                       $  2,606    $ (3,812)
                                                                                            --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
                Proceeds from stock plans                                                        214         268
                Purchase of treasury stock                                                      (236)       --
                                                                                            --------    --------

  Net cash (used in) provided by financing activities                                       $    (22)   $    268
                                                                                            --------    --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                         (185)        (41)
                                                                                            --------    --------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                                   $   (489)   $ (1,058)

CASH AND CASH EQUIVALENTS, beginning of period                                                 7,249       4,042
                                                                                            --------    --------

CASH AND CASH EQUIVALENTS, end of period                                                    $  6,760    $  2,984
                                                                                            --------    --------
                                                                                            --------    --------


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                Cash paid for income taxes                                                  $      1    $     62
                                                                                            --------    --------
                                                                                            --------    --------
OTHER TRANSACTIONS NOT PROVIDING (USING) CASH:
                (Decrease) Increase in value of marketable securities                       $   (364)   $    126
                                                                                            --------    --------
                                                                                            --------    --------
</TABLE>


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

                                       5

<PAGE>




                         MEDIA 100 INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (UNAUDITED, EXCEPT FOR NOVEMBER 30, 1998 AMOUNTS)


1.  Basis of Presentation

The accompanying interim consolidated financial statements include the
accounts of Media 100 Inc. ("the Company") and its wholly-owned subsidiaries.
The interim financial statements are unaudited. However, in the opinion of
management, the interim consolidated financial statements and disclosures
reflect all adjustments necessary for fair presentation. Interim results are
not necessarily indicative of results expected for a full year or for any
other interim period. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. These
consolidated condensed financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto included in
the Company's latest audited financial statements, which are included in the
Company's Annual Report on Form 10-K for the fiscal year ended November 30,
1998, filed with the Securities and Exchange Commission.

The Company's 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
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.

Media 100 Inc. develops, markets, sells and supports digital video systems that
enable a wide range of professional communicators in business, education, and
video post production to create complete, television-quality video productions
quickly, easily, and with great creative flexibility. The Company markets and
delivers its products to end users through a worldwide channel of specialized
value-added resellers that sell, assemble and install turnkey systems using high
performance personal computers, disk drives, and ancillary video equipment.

2.  Principles of Consolidation

The consolidated financial statements include the Company and its subsidiaries.
All material intercompany transactions and balances have been eliminated in
consolidation.

3.  Reclassifications

Certain amounts in the prior year's financial statements have been reclassified
to conform with the current year's presentation.

4.  Cash Equivalents and Marketable Securities

Cash equivalents are carried at cost, which approximates market value, and have
original maturities of less than three months. Cash equivalents include money
market accounts.

The Company accounts for marketable securities in accordance with Statement
of Financial Accounting Standards No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS
IN DEBT AND EQUITY SECURITIES (SFAS No. 115). Under this standard, the
Company is required to classify all investments in debt and equity securities
into one or more of the following three categories: held-to-maturity,
available-for-sale or trading. Available-for-sale securities are recorded at
fair market value with unrealized gains and losses excluded from earnings and
reported as a separate component of stockholders' equity. All of the
Company's marketable securities are classified as available-for-sale.

                                       6

<PAGE>


4.  Cash Equivalents and Marketable Securities (continued)

Marketable securities held as of May 31, 1999 and November 30, 1998 consist of
the following (in thousands):

<TABLE>
<CAPTION>

                                                              Maturity              1999          1998
<S>                                                                             <C>            <C>
    Investments available for sale:
        U.S. Treasury Notes                                less than 1 year     $     1,542    $   1,535
        U.S. Treasury Notes                                1 - 5 years                4,568        5,760
                                                                                -----------    ---------
           Total U.S. Treasury Notes                                                  6,110        7,295

        Municipal Bonds                                    less than 1 year           1,199        3,837
        Municipal Bonds                                    1 - 5 years                1,060        1,067
                                                                                -----------    ---------
           Total Municipal Bonds                                                      2,259        4,904

        U.S. Agency Bonds                                  less than 1 year           1,766        4,298
        U.S. Agency Bonds                                  1 - 5 years                4,055        4,136
                                                                                -----------    ---------
           Total U.S. Agency Bonds                                                    5,821        8,434

        Money Market Instruments                           less than 1 year           4,079        3,395

        Corporate Obligations                              less than 1 year           1,113          516
        Corporate Obligations                              1 - 5 years                5,862        6,847
                                                                                -----------    ---------
           Total Corporate Obligations                                                6,975        7,363

        Total investments available for sale                                         25,244       31,391
        Less: cash and cash equivalents                                              (4,079)      (6,206)
                                                                                -----------    ---------
        Total marketable securities                                             $    21,165   $  25,185
                                                                                -----------    ---------
                                                                                -----------    ---------
</TABLE>


Marketable securities, including cash and cash equivalents of $4,079 and
$6,206, had a cost of $25,337 and $31,120, and a market value, excluding cash
and cash equivalents, of $21,165 and $25,185 at May 31, 1999 and November 30,
1998, respectively.

5.  Inventories

Inventories are stated at the lower of first-in, first-out (FIFO) cost or market
and consist of the following (in thousands):

<TABLE>
<CAPTION>

                                                 May 31,      November 30,
                                                  1999           1998
                                               ----------      ---------
<S>                                            <C>             <C>
           Raw materials                       $      370      $     230
           Work-in-process                            521            336
           Finished goods                             835            401
                                               ----------      ---------
                                               $    1,726      $     967
                                               ----------      ---------
                                               ----------      ---------
</TABLE>

Work-in-process and finished goods inventories include material, labor and
manufacturing overhead. Management performs periodic reviews of inventory and
disposes of items not required by their manufacturing plan.

                                       7

<PAGE>


6.  Equipment, net

Equipment, net is stated at cost, less accumulated depreciation and
amortization, and consists of the following (in thousands):

<TABLE>
<CAPTION>

                                                            May 31,         November 30,
                                                                1999           1998
                                                            ----------      ---------
<S>                                                         <C>             <C>
       Machinery and equipment                              $    7,880      $   7,174
       Purchased software                                        3,852          3,616
       Furniture and fixtures                                    1,240          1,240
       Vehicles                                                      -             12
       Leasehold improvements                                    1,548          1,482
                                                            ----------      ---------


                                                            $   14,520      $  13,524
       Less accumulated depreciation and amortization            6,814          5,161
                                                            ----------      ---------
                                                            $    7,706      $   8,363
                                                            ----------      ---------
                                                            ----------      ---------
</TABLE>


7.  Net Income (Loss) Per Common Share

Effective December 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, EARNINGS PER SHARE (SFAS No. 128). In
accordance with SFAS No. 128, basic net income (loss) per share is computed
by using the weighted-average number of common shares outstanding. Diluted
income (loss) per share is computed by using the weighted-average number of
common shares outstanding and potential common shares from the assumed
exercise of stock options outstanding during the period, if any, using the
treasury stock method.

The following is a reconciliation of the shares used in the computation of
basic and diluted net income (loss) per share (in thousands):

<TABLE>
<CAPTION>

                                                                 Three months ended May 31,   Six months ended May 31,
                                                                           1999        1998        1999        1998
                                                                  -------------------------------------------------------
<S>                                                                     <C>       <C>           <C>         <C>
Basic net income (loss)  - weighted average shares
  of common stock outstanding                                             8,300       8,258       8,296       8,245

Effect of potential common shares - stock options
  outstanding (unless antidilutive)                                         309        --          --          --
                                                                  -------------------------------------------------------

Diluted net income (loss)  - weighted average
  shares and potential common shares outstanding                          8,609       8,258       8,296       8,245
                                                                  -------------------------------------------------------

 Options not included in computation of diluted net
  income (loss) per share due to their dilutive effect                      244       1,006         293         539
                                                                  -------------------------------------------------------
</TABLE>


8.  Contingencies

(i) On June 7, 1995, a lawsuit was filed against the Company by Avid
    Technology, Inc. ("Avid") in the United States District Court for the
    District of Massachusetts. The complaint generally alleges patent
    infringement by the Company arising from the manufacture, sale, and use of
    the Company's Media 100 products. The complaint includes requests for
    injunctive relief, treble damages, interest, costs and fees. In July 1995,
    the Company filed an answer and counterclaim denying any infringement and
    asserting that the Avid patent in question is invalid. The Company intends
    to vigorously defend the lawsuit. In addition, Avid is seeking reissue of
    the patent, including claims that it asserts are broader than in the
    existing patent, and these reissue proceedings remain pending before the
    U.S. Patent and Trademark Office. On January 16, 1998, the court dismissed
    the lawsuit without prejudice to either party moving to restore it to the
    docket upon completion of all matters pending before the U.S. Patent and
    Trademark Office. There can be no assurance that the Company will prevail
    in the lawsuit asserted by Avid or that the expense or other effects of the
    lawsuit, whether or not the Company prevails, will not have a material
    adverse effect on the Company's business, operating results and financial
    condition.

                                       8

<PAGE>


(ii) From time to time the Company is involved in other disputes and/or
     litigation encountered in its normal course of business. The Company does
     not believe that the ultimate impact of the resolution of such other
     outstanding matters will have a material effect on the Company's business,
     operating results or financial condition.

9.   Capitalized Software Development Costs

The Company capitalizes certain computer software development costs.
Capitalization of costs commences upon establishing technological feasibility.
Capitalized costs, net of accumulated amortization, were approximately $59,000
and $89,000, respectively, as of May 31, 1999 and November 30, 1998, and are
included in other assets. These costs are amortized on a straight-line basis
over two years, which approximates the economic life of the product.
Amortization expense, included in cost of sales in the accompanying consolidated
statements of operations, was approximately $15,000 and $30,000 for the three
and six months ended May 31, 1999, respectively.

10.  Income Taxes

The Company did not record a tax provision for the three and six months ended
May 31, 1999 due to the net loss incurred for the six months then ended.

11.  Accrued Expenses

Accrued expenses at May 31, 1999 and November 30, 1998 consist of the following
(in thousands):

<TABLE>
<CAPTION>

                                               May 31,      November 30,
                                                1999            1998
                                             -----------    ------------
<S>                                          <C>            <C>
       Payroll and related taxes             $     1,687    $      1,691

       Accrued warranty                              463             463
       Accrued product development                   176           2,220
       Accrued selling and marketing                 634             878
       Accrued legal and other                     4,378           4,440
                                             -----------    ------------
                                             $     7,338    $      9,692
                                             -----------    ------------
                                             -----------    ------------
</TABLE>

12.      Recent Accounting Pronouncements

Effective December 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME (SFAS No. 130).
SFAS No. 130 establishes standards for the display of comprehensive income and
its components in a full set of financial statements. Comprehensive income
includes all changes in equity during a period except those resulting from the
issuance of shares of stock and distributions to shareholders. SFAS No. 130
requires that an enterprise display the components of comprehensive income for
each period presented.

The components of the Company's comprehensive income (loss) were as follows:

<TABLE>
<CAPTION>

                                         Three months ended May 31,        Six months ended May 31,
                                               1999       1998                   1999       1998
                                            -------    -------                -------    -------
<S>                                         <C>        <C>                    <C>        <C>
Net income (loss)                           $   177    $(3,350)               $  (512)   $(4,102)

Cummulative translation adjustment             (109)      (284)                  (185)       (41)
Unrealized holding gain (loss) on
   available for sale securities               (112)         7                   (364)       126
                                            -------    -------                -------    -------

Total comprehensive loss                    $   (44)   $(3,073)               $(1,061)   $(4,017)
                                            -------    -------                -------    -------
                                            -------    -------                -------    -------

</TABLE>

13.      Subsequent Events

On May 6, 1999, the Company entered into a definitive agreement to acquire
Terran Interactive, Inc. of Los Gatos, California, a leading supplier of
software tools for high-quality Internet and DVD video. The Company will
treat the acquisition as a purchase for accounting purposes. The transaction
was completed on June 28, 1999.

                                       9

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS



Overview

Except for the historical information contained herein, the matters discussed in
this Quarterly Report on Form 10-Q are forward-looking statements based on
current expectations, and involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from those
expressed in such forward-looking statements. The risks and uncertainties
associated with such statements have been described under the heading "Certain
Factors That May Affect Future Results" in this Form 10-Q and the Company's
Annual Report on Form 10-K for the fiscal year ended November 30, 1998.

Media 100 Inc. develops, markets, sells and supports digital video systems that
enable a wide range of professional communicators in business, education, and
video post production to create complete, television-quality video productions
quickly, easily, and with great creative flexibility. The Company markets and
delivers its products to end users through a worldwide channel of specialized
value-added resellers that sell, assemble and install turnkey systems using high
performance personal computers, disk drives, and ancillary video equipment.

Results of Operations

The following table shows certain consolidated statements of operations data as
a percentage of net sales.

<TABLE>
<CAPTION>

                                             Three months ended May 31,           Six months ended May 31,
                                                      1999     1998                   1999     1998
                                                     -----     -----                 -----     -----
<S>                                                  <C>       <C>                   <C>       <C>
Net sales:
   Products                                           83.0  %   82.4  %               82.7  %   83.7  %
   Services                                           17.0      17.6                  17.3      16.3
                                                     -----     -----                 -----     -----
Total net sales                                      100.0     100.0                 100.0     100.0
Cost of sales                                         38.8      41.8                  39.0      41.4
                                                     -----     -----                 -----     -----
     Gross profit                                     61.2      58.2                  61.0      58.6
Operating expenses:
     Research and development                         25.1      49.6                  28.9      38.5
     Selling and marketing                            30.0      36.0                  29.5      34.3
     General and administrative                        7.4      11.7                   7.6      10.3
                                                     -----     -----                 -----     -----
         Total operating expenses                     62.5      97.3                  66.0      83.1
Operating loss                                        (1.3)    (39.1)                 (5.0)    (24.5)
Interest income                                        2.7       4.3                   2.9       4.2
                                                     -----     -----                 -----     -----
Income (loss) before tax provision                     1.4     (34.8)                 (2.1)    (20.3)
Tax provision                                           --        --                    --        --
                                                     -----     -----                 -----     -----

Net income (loss)                                      1.4  %  (34.8) %               (2.1) %  (20.3) %
                                                     -----     -----                 -----     -----
                                                     -----     -----                 -----     -----
</TABLE>


Comparison of Second Fiscal Quarter of 1999 to Second Fiscal Quarter of 1998

Net sales for the second fiscal quarter ended May 31, 1999 were $12,537,000,
an increase of $2,900,000, or 30.0%, from the same period a year ago. Net
sales from products for the second fiscal quarter ended May 31, 1999 were
$10,400,000, an increase of $2,460,000 or 31.0%, from the same period a year
ago. The increase in net sales from products is due primarily to the shipment
of Finish, the Company's new high performance Windows NT-based product line,
along with first customer shipments of the new version 5.5 release of Media
100 for Macintosh. In conjunction with the version 5.5 release, the Company
introduced SDI Option, a new product which supports the serial digital
interface standard allowing customers to work with broadcast-standard
SDI-devices. The Finish product line currently comprises four models: Finish
V20, Finish V40, Finish V60 and Finish V80. The Media 100 product line
currently comprises five models: Media 100 le, Media 100 lx, Media xe, Media
xs and Media xr.

                                       10

<PAGE>


Comparison of Second Fiscal Quarter of 1999 to Second Fiscal Quarter of 1998
(continued)

Net sales from services for the second fiscal quarter ended May 31, 1999 were
$2,137,000, an increase of $440,000, or 25.9%, from the same period a year ago.
The increase in net sales from services is due to new customers purchasing and
existing customers renewing their support contracts.

Gross profit for the second quarter ended May 31, 1999 was 61.2% compared to
58.2% in the comparable quarter a year ago. In the first quarter of fiscal
1999, the Company reclassified certain costs associated with its Platinum
support services. The Company now classifies these costs as part of cost of
goods sold. The change in presentation had the affect of increasing cost of
goods sold and reducing selling and marketing expenses by the same amount.
Certain amounts in the comparable period last year have been reclassified to
conform with the current year's presentation. The increase in gross profit as
a percentage of net sales is due to the increase in the Company's Platinum
Support Services, which generate higher gross profit than products, and
reductions in the cost of key component parts used in the manufacture of the
Company's hardware.

Operating expenses for the second fiscal quarter ended May 31, 1999 were
$7,836,000, a decrease of $1,541,000, or 16.4%, from the same period a year
ago. Research and development expenses for the second fiscal quarter ended
May 31, 1999 were $3,142,000, a decrease of $1,632,000, or 34.2%, from the
same period a year ago. The majority of the decrease in research and
development expenses represented lower development costs due to the
completion of Finish, the Company's new family of high performance digital
video systems for the Windows NT platform, which shipped earlier this year.
Research and development expenses decreased from the first quarter of 1999 by
$852,000 as the initial development of the new Windows NT products was
completed. The Company currently anticipates that research and development
expenses will increase in 1999 on a quarterly basis, in absolute dollars, due
to the acquisition of Terran Interactive, Inc. However, the Company currently
plans lower research and development expenses from year ago levels in
absolute dollars, since the initial development of the new Windows NT
products was completed and these products were introduced to the market.
Selling and marketing expenses for the second fiscal quarter ended May 31,
1999 were $3,759,000, an increase of $286,000, or 8.2%, from the same period
a year ago. As noted above, the Company has changed the manner of
presentation for costs associated with its Platinum support services. The
Company now classifies these costs as part of cost of goods sold. The change
in presentation had the affect of increasing cost of goods sold and reducing
selling and marketing expenses by the same amount. Certain amounts in the
comparable period last year have been reclassified to conform with the
current year's presentation. The Company plans to maintain its current level
of selling and marketing expenditures for the remainder of the fiscal year to
support the rollout and promotion of the new Windows NT products and to
promote new products acquired as a result of the Terran Interactive, Inc.
acquisition. General and administrative expenses for the second fiscal
quarter ended May 31, 1999 were $935,000, a decrease of $195,000, or 17.3%,
from the same period a year ago. The Company currently anticipates that its
general and administrative expenses will increase modestly, in absolute
dollars, in fiscal 1999 compared to fiscal 1998 in support of the new Windows
NT products and the additional administrative expenses associated with the
Terran Interactive, Inc. acquisition.

The operating loss for the second fiscal quarter ended May 31, 1999 was
$162,000, a decrease of $3,604,000, or 95.7%, from the same period a year ago.
The decrease in the operating loss for the second fiscal quarter ended May 31,
1999 was due to an increase in sales and gross profit, as well as a reduction in
operating expenses.

Interest income for the second fiscal quarter ended May 31, 1999 was
$339,000, a decrease of $77,000, or 18.5%, from the comparable quarter a year
ago. The decrease in interest income is due to lower cash and cash
equivalents and marketable securities in the second fiscal quarter of 1999,
compared to the second fiscal quarter of 1998.

The Company did not record a tax provision for the second fiscal quarter
ended May 31, 1999 due to the net loss incurred for the first six months of
the fiscal year.

The net income for the second fiscal quarter ended May 31, 1999 was $177,000, or
$0.02 per share, compared to a net loss of $3,350,000, or $.41 per share, for
the same period a year ago.

                                       11

<PAGE>


Comparison of First Six Months of 1999 to First Six Months of 1998

Net sales for the six months ended May 31, 1999 were $24,676,000, an increase
of $4,518,000, or 22.4%, from the same period a year ago. Net sales from
products for the six months ended May 31, 1999 were $20,404,000, an increase
of 21.0% from the same period a year ago. The increase in net sales from
products is due primarily to the shipment of Finish, the Company's new high
performance Windows NT-based product line, along with shipments of several
new versions of the Media 100 product line for Macintosh and a new product,
named DV Option. The Finish product line currently comprises four models:
Finish V20, Finish V40, Finish V60 and Finish V80. The Media 100 product line
currently comprises five models: Media 100 le, Media 100 lx, Media xe, Media
xs and Media xr. In November 1998, the Company began shipping its new digital
DV product, named DV Option. DV Option is available for all Media 100 and
Finish systems, from Media 100 le to Media 100 xr and from Finish V20 to
Finish V80. Net sales from services for the six months ended May 31, 1999
were $4,272,000, an increase of $985,000, or 30.0%, from the same period a
year ago. The increase in net sales from services is due to new customers
purchasing and existing customers renewing their support contracts.

Gross profit for the six months ended May 31, 1999 was 61.0% compared to
58.6% in the comparable quarter a year ago. In the first quarter, the Company
reclassified certain costs associated with its Platinum support services. The
Company now classifies these costs as part of cost of goods sold. The change
in presentation had the affect of increasing cost of goods sold and reducing
selling and marketing expenses by the same amount. Certain amounts in the
comparable period last year have been reclassified to conform with the
current year's presentation. The increase in gross profit as a percentage of
net sales is due to the increase in the Company's Platinum support services,
which generate higher gross profit than products, and reductions in the cost
of key component parts used in the manufacture of the Company's hardware.

Operating expenses for the six months ended May 31, 1999 were $16,292,000, a
decrease of $452,000, or 2.7%, from the same period a year ago. Research and
development expenses for the six months ended May 31, 1999 were $7,136,000, a
decrease of $629,000, or 8.1%, from the same period a year ago. The majority
of the decrease in research and development expenses represented lower
development costs due to the completion of Finish, the Company's new family
of high performance digital video systems for the Windows NT platform, which
shipped earlier this year. The Company currently anticipates that research
and development expenses will increase in 1999 on a quarterly basis, in
absolute dollars, due to the acquisition of Terran Interactive, Inc. However,
the Company currently plans lower research and development expenses from year
ago levels in absolute dollars, since the initial development of the new
Windows NT products was completed and these products were introduced to the
market. Selling and marketing expenses for the six months ended May 31, 1999
were $7,288,000, an increase of $379,000, or 5.5%, from the same period a
year ago. As noted above, the Company has changed the manner of presentation
for costs associated with its Platinum support services. The Company now
classifies these costs as part of cost of goods sold. The change in
presentation had the affect of increasing cost of goods sold and reducing
selling and marketing expenses by the same amount. Certain amounts in the
comparable period last year have been reclassified to conform with the
current year's presentation. The Company plans to maintain its current level
of selling and marketing expenditures for the remainder of the fiscal year to
support the rollout and promotion of the new Windows NT products and to
promote new products acquired as a result of the Terran Interactive, Inc.
acquisition. General and administrative expenses for the six months ended May
31, 1999 were $1,868,000, a decrease of $202,000, or 9.8%, from the same
period a year ago. The Company currently anticipates that its general and
administrative expenses will increase modestly, in absolute dollars, in
fiscal 1999 compared to fiscal 1998 in support of the new Windows NT products
and additional administrative expenses associated with the Terran
Interactive, Inc. acquisition.

The operating loss for the six months ended May 31, 1999 was $1,243,000, a
decrease of $3,688,000, or 74.8%, from the same period a year ago. The decrease
in the operating loss for the six months ended May 31, 19999 was due to an
increase in sales and gross profit, and a reduction in operating expenses.

Interest income for the six months ended May 31, 1999 was $731,000, a
decrease of $110,000, or 13.1%, from the comparable quarter a year ago. The
decrease in interest income is due to lower cash and cash equivalents and
marketable securities in the first six months of 1999, compared to the first
six months of 1998.

The Company did not record a tax provision for the six months ended May 31,
1999 due to the net loss incurred in the first six months of the fiscal year.

                                       12

<PAGE>


Comparison of First Six Months of 1999 to First Six Months of 1998 (continued)

The net loss for the six months ended May 31, 1999 was $512,000 or $0.06 per
share, compared to a net loss of $4,102,000, or $.50 per share, for the same
period a year ago.

Liquidity and Capital Resources

The Company has funded its operations to date primarily from public offerings of
equity securities and cash flows from operations. As of May 31, 1999, the
Company's principal sources of liquidity included cash and cash equivalents and
marketable securities totaling approximately $27,925,000.

For the six months ended May 31, 1999, cash used in operating activities was
approximately $2,888,000 compared to cash provided by operations of
approximately $2,527,000 for the same period a year ago. Cash used in
operations during the first six months of fiscal 1999 was due to increases in
accounts receivable of $453,000, inventory of $759,000, prepaid expenses of
$122,000 and decreases in accounts payable of $228,000, accrued expenses of
$2,354,000 and deferred revenue of $197,000. Net cash provided by investing
activities was approximately $2,606,000 during the first six months of fiscal
1999, compared to cash used in investing activities of approximately
$3,812,000 for the same period a year ago. Cash provided by investing
activities during the six month period ended May 31, 1999 was primarily from
net proceeds of marketable securities of approximately $3,672,000 offset by
purchases of equipment of approximately $1,096,000. Cash used in financing
activities during the first six months of fiscal 1999 was approximately
$22,000, compared to cash provided by financing activities of $268,000 for
the same period a year ago. Cash provided by financing activities of $214,000
in the first six months of fiscal 1999 came from proceeds from the Company's
stock plans. The Company used approximately $236,000 to repurchase Media 100
Inc. common stock during the six months ended May 31, 1999.

The Company believes its existing cash balance, cash equivalents and
marketable securities will be sufficient to meet the Company's cash
requirements for at least the next twelve months.

On May 6, 1999, the Company entered into a definitive agreement to acquire
Terran Interactive, Inc. of Los Gatos, California, a leading supplier of
software tools for high-quality Internet and DVD video. The Company will
treat the acquisition as a purchase for accounting purposes. The transaction
was completed on June 28, 1999.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS


Except for the historical information contained herein, the matters discussed in
this Form 10-Q are forward-looking statements, and are based on current
expectations, and involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Company, or industry results, to be materially different from those expressed in
such forward-looking statements. The risks and uncertainties associated with
such statements include the following:


SIGNIFICANT FLUCTUATIONS AND UNPREDICTABILITY OF OPERATING RESULTS. The
Company's quarterly operating results may vary significantly for a number of
reasons, including new product announcements and introductions by the Company or
its competitors, changes in pricing, and the volume and timing of orders
received during the quarter. Historically a significant percentage of the
Company's net sales has resulted from orders booked and shipped during the third
month of its fiscal quarter, a substantial portion of which occur in the latter
half of that month. The Company has also in the past experienced delays in the
development of new products and enhancements, and such delays may occur in the
future. These factors make the forecasting of revenue inherently uncertain.
Additionally, a significant portion of the Company's operating expenses is
relatively fixed, and operating expense levels are based primarily on internal
expectations of future revenue. As a consequence, quarterly operating expense
levels cannot be reduced rapidly in the event that quarterly revenue levels fail
to meet internal expectations. Therefore, if quarterly revenue levels fail to
meet internal expectations, the Company's operating results would be adversely
affected.


CONCENTRATION OF SALES ON THE MACINTOSH PLATFORM. To date, a majority of the
Company's sales relate to a single family of products running on the Macintosh
platform. A decline in demand for these systems, or a failure of such systems to
maintain market acceptance, as a result of competition, technological change or
other factors, would have a material adverse effect on the Company's business
and operating results.

                                       13

<PAGE>


Some of the Company's products operate only on Apple Macintosh computers. The
Company believes that the market of users of the Company's products
increasingly views Microsoft's Windows NT operating system as an alternative
platform for new digital video products. As a result of the foregoing, there
can be no assurance that resellers and customers will not delay purchases of
Apple-based products or purchase substitute products based on non-Macintosh
operating systems, the occurrence of any of which could have a material
adverse effect on the Company's business and operating results. The Company
currently anticipates significant growth in quarterly revenues of the Company
will not occur until new products based on the Windows NT platform have
gained market acceptance.

RAPID TECHNOLOGICAL CHANGE. The market for the Company's products is
characterized by rapidly changing technology, evolving industry standards and
frequent new product introductions. The Company's future success will depend
in part upon its ability to enhance its existing products and to introduce
new products and features in a timely manner to address customer
requirements, respond to competitive offerings, adapt to new emerging
industry standards and take advantage of new enabling technologies that could
render the Company's existing products obsolete. In this regard, the Company
is developing new products that will operate on the Windows NT platform. The
Company currently anticipates that some of these new products will become
commercially available during the second half of the Company's current fiscal
year. The Company also plans in fiscal 1999 to continue its investment in
research and development, primarily in connection with the development of new
Windows NT-based hardware and software products. Any delay or failure of the
Company in developing such additional new products or any delay or failure of
such new products to achieve market acceptance, as a result of competition,
blocking proprietary rights of third parties or other factors, could have a
material adverse effect on the Company's business and operating results.

RISKS ASSOCIATED WITH DEVELOPMENT AND INTRODUCTION OF NEW PRODUCTS. New product
announcements by the Company's competitors and by the Company itself could have
the effect of reducing customer demand for the Company's existing products. The
introduction of new or enhanced products by the Company also requires the
Company to manage the transitions from existing products. New product
introductions require the Company to devote time and resources to the training
of its sales channel in the features and target customers for such new products,
which efforts could result in less selling efforts being made by the sales
channel during such training period. New product announcements or introductions
could contribute to significant quarterly fluctuations in operating results as
orders for new products commence and orders for existing products decline.


DEPENDENCE ON PROPRIETY TECHNOLOGY. The Company's ability to compete
successfully and achieve future revenue growth will depend, in part, on its
ability to protect its proprietary technology and operate without infringing the
rights of others. The Company has in the past received, and may in the future
continue to receive, communications suggesting that its products may infringe
patents or other intellectual property rights of third parties. The Company's
policy is to investigate the factual basis of such communications and negotiate
licenses where appropriate. While it may be necessary or desirable in the future
to obtain licenses relating to one or more products, or relating to current or
future technologies, there can be no assurance that the Company will be able to
do so on commercially reasonable terms or at all. There can be no assurance that
these or other future communications can be settled on commercially reasonable
terms or that they will not result in protracted and costly litigation.


RISKS OF THIRD-PARTY CLAIMS OF INFRINGEMENT. There has been substantial industry
litigation regarding patent, trademark and other intellectual property rights
involving technology companies. In the future, litigation may be necessary to
enforce any patents issued to the Company or to enforce trade secrets,
trademarks and other intellectual property rights owned by the Company, to
defend the Company against claimed infringement of the rights of others and to
determine the scope and validity of the proprietary rights of others. For a
description of certain pending litigation instituted against the Company, see
Item III, Legal Proceedings and Note 6 to the Consolidated Financial Statements
in Form 10-K for the year ended November 30, 1998. Any such litigation could be
costly and a diversion of management's attention, which could adversely affect
the Company's business, operating results and financial condition. Adverse
determinations in any such litigation could result in the loss of the Company's
proprietary rights, subject the Company to significant liabilities, require the
Company to seek licenses from third parties or prevent the Company from
manufacturing or selling its products, any of which could adversely affect the
Company's business, operating results and financial condition.

                                       14

<PAGE>


EMERGING MARKETS. The broadcast, post-production, business, and institution
digital video segments to which the Company is targeting its products are an
emerging market. Many of the current users in this market rely on analog video
tape processes. Digital editing alternatives are relatively new and currently
account for a small portion of this market of current users. The Company also
believes that this market includes a potential market of new users who currently
out-source their video production requirements. The Company's future growth will
depend, in part, on the rate at which existing users convert to digital editing
processes and the rate at which new users adopt digital video systems as a
communications resource. There can be no assurance that the use of digital video
products like the ones offered by the Company will expand among existing users
of alternative video production processes or the market for new users, and any
failure of the Company's products to achieve market acceptance in these markets,
as a result of competition, technological change or other factors, could have a
material adverse effect on the Company's business and operating results.


COMPETITION. The market for the Company's products is highly competitive and
characterized by pressure to reduce prices, incorporate new features and
accelerate the release of new products. A number of companies currently offer
products that compete directly or indirectly with the Company's products,
including Accom, Inc., Apple Computer Inc., Autodesk, Inc., Avid Technology,
Inc., FAST Electronic GmbH, Matrox Electronic Systems Ltd., Pinnacle Systems,
Inc., and Truevision, Inc. In addition, the Company expects much larger
vendors, such as Matsushita Electric Industrial Company Ltd., Microsoft
Corporation, and Sony Corporation, to develop and introduce digital editing
systems that may compete with the Company's products. Many of these current
and potential competitors have greater financial, technical and marketing
resources than the Company. As a result, such competitors may be able to
develop products comparable to or superior to the Company's products, adapt
more quickly than the Company to new technologies, evolving industry
standards or customer requirements, or lower their product costs and thus be
able to lower prices to levels at which the Company could not operate
profitably, the occurrence of any of which could have a material adverse
effect on the Company's business and operating results. In this regard, the
Company believes that it will continue to experience competitive pressure to
reduce prices, particularly for its high data rate systems. The Company has
historically realized higher gross profit on the sale of its high data rate
systems than its entry-level systems, and such continued competitive pricing
pressure could result in lower sales and gross margin, which in turn could
adversely affect the Company's operating results.

DEPENDENCE ON SINGLE OR LIMITED SOURCE SUPPLIERS. The Company is dependent on
single or limited source suppliers for several key components used in its
products. The availability of many of these components is dependent on the
Company's ability to provide suppliers with accurate forecasts of its future
requirements, and certain components used by the Company have been subject to
industry-wide shortages. The Company does not carry significant inventories of
these components and has no guaranteed supply arrangements with such suppliers.
There can be no assurance that the Company's inventories would be adequate to
meet the Company's production needs during any interruption of supply. The
Company's inability to develop alternative supply sources, if required, or a
reduction or stoppage in supply, could delay product shipments until new sources
of supply become available, and any such delay could adversely affect the
Company's business and operating results in any given period.


DEPENDENCE ON RESELLERS. The Company relies primarily on its worldwide network
of independent VARs to distribute and sell its products to end users. The
Company's resellers generally offer products of several different companies,
including in some cases products which are competitive with the Company's
products. In addition, many of these VARs are small organizations with limited
capital resources. There can be no assurance that the Company's resellers will
continue to purchase the Company's products or provide them with adequate levels
of support, or that the Company's efforts to expand its VAR network will be
successful, any significant failure of which could have a material adverse
effect on the Company's business and operating results.


RELIANCE ON INTERNATIONAL SALES. International sales and operations may be
subject to risks such as the imposition of government controls, export
license requirements, restrictions on the export of critical technology, less
effective enforcement of proprietary rights; currency exchange fluctuations,
generally longer collection periods, political instability, trade
restrictions, changes in tariffs, difficulties in staffing and managing
international operations, potential insolvency of international resellers and
difficulty in collecting accounts receivable. The Company's international
sales are also subject to more seasonal fluctuation than domestic sales. In
this regard, the traditional summer vacation period, which occurs during the
Company's third fiscal quarter, may result in a decrease in sales,
particularly in Europe. There can be no assurance that these factors will not
have an adverse effect on the Company's future international operations and
consequently, on the Company's business and operating results.

YEAR 2000 READINESS DISCLOSURE. The year 2000 issue is the potential for system
and processing failure of date-related data and the result of
computer-controlled systems using two digits rather than four to define the
applicable year. For example, computer programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This

                                       15

<PAGE>


could result in system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.


To address these year 2000 issues with its major information technology
systems, the Company has initiated a program that is designed to deal with
the Company's internal management information technology systems. The
activities included in this program are intended to encompass all major
categories of information technology systems used by the Company, including
manufacturing, sales, order entry, accounting and financial reporting. The
Company has spent more than $2,500,000 over the past two years upgrading its
internal management information technology systems. The Company has
substantially completed an assessment of these information technology systems
and believes that its information technology systems are year 2000 compliant.
However, the Company utilizes third-party equipment and software that may not
be year 2000 compliant. Failure of third-party equipment or software to
operate properly with regard to the year 2000 and thereafter could require
the Company to incur unanticipated expenses to remedy any problems, which
could have a material adverse effect on the Company's business, results of
operations and financial condition. The Company may also be vulnerable to any
failures by its major suppliers, service providers and customers to remedy
their own internal information technology systems due to year 2000 issues
which could, among other things, have a material and adverse affect on the
Company's supplies and orders. The Company is unable to estimate the nature
or extent of any potential adverse impact resulting from the failure of third
parties, such as suppliers, service providers and customers, to achieve year
2000 compliance. Moreover, such third parties, even if year 2000 compliant,
could experience difficulties resulting from year 2000 issues that may affect
their suppliers, service providers and customers. As a result, although the
Company does not currently anticipate that it will experience any material
shipment delays from their major product suppliers or any material sales
delays to its customers due to year 2000 issues, these third parties may
experience year 2000 problems. Any such problems could have a material
adverse affect on the Company's business, results of operations and financial
condition.

Other than the activities described above, the Company does not have and does
not plan to develop a contingency plan to address year 2000 issues. Should any
unanticipated significant year 2000 issues arise, the Company's failure to
implement such a contingency plan could have a material adverse affect on its
business, results of operations and financial condition.


To assist customers in evaluating their year 2000 issues as they may relate to
the Company's products, the Company has assessed the capability of its current
products and products no longer produced, to handle the year 2000 issue. As a
result of this assessment, the Company believes that all current products
shipping are year 2000 compliant, however, their can be no assurance that the
failure to ensure year 2000 capability for the Company's products will not have
a material adverse affect on the Company.


Based on information currently available to the Company, it does not believe
that the year 2000 issues discussed above related to internal information
technology systems or products sold to customers will have a material adverse
impact on the Company's business, results of operations or financial condition;
however, it is uncertain to what extent the Company may be affected by such
matters. In addition, their can be no assurance that the failure to ensure year
2000 capability by the Company, its suppliers or other third parties will not
have a material adverse affect on the Company.


EURO CONVERSION. On January 1, 1999, 11 of the 15 member countries of the
European Union established fixed conversion rates between their existing
sovereign currencies and the euro. As of January 1, 2002, the transition to the
euro will be complete. The Company has operations within the European Union and
has prepared for the euro conversion. The Company does not expect the costs
associated with the transition to be material. The Company's functional currency
for accounting purposes is the U. S. Dollar. The overall effect of the
transition to the euro may have a material adverse affect on the Company's
business, financial condition and financial results.

DEPENDENCE ON KEY PERSONNEL. Competition for employees with the skills required
by the Company is intense in the geographic areas in which the Company's
operations are located. The Company believes that its future success will depend
on its continued ability to attract and retain qualified employees, especially
in research and development.


ACQUISITION RELATED RISKS In June 1999, the Company completed the Terran
Interactive, Inc. acquisition. The Company's business and results of
operations could be materially adversely affected in the event the Company
fails to successfully integrate the business and operations of Terran
Interactive, Inc. The Company may continue in the future to acquire existing
businesses, products, and technologies to enhance and expand its line of
products. Such acquisitions may be material in size and in scope. There can
be no assurance that the Company will be able to identify, acquire, or
profitably manage additional business o r successfully integrate any acquired
businesses into the Company without substantial expenses, delays, or other
operational or financial problems. Acquisitions involve a number of special
risks and factors, including increasing competition for attractive
acquisition candidates in the Company's markets, the technological
enhancement and incorporation of acquired products into existing product
lines and services, the assimilation of the operations and personnel of the
acquired companies, failure to retain key acquired personnel, adverse
short-term effects on reported operating results, the amortization of
acquired intangible assets, the assumption of undisclosed liabilities of any
acquired companies, the failure to achieve anticipated benefits such as cost
savings and synergies, as well as the diversion of management's attention
during the acquisition and integration process. Some or all of these special
risks and factors may have a material adverse impact on the Company's
business, operating results, and financial condition.

Derivative financial Instruments, Other Financial Instruments and Derivative
Commodity Instruments. The Company does not participate in derivative
financial instruments, other financial instruments for which the fair value
disclosure would be required under SFAS No.107, or derivative commodity
instruments. All of the Company's investments are in short-term, investment
grade commercial paper, certificates of deposit and U.S. Government and
agency securities that are carried at fair value on the Company's books.
Accordingly, the Company has no quantitative information concerning the
market risk of participating in such investments.

Primary Market Risk Exposures. The Company's primary market risk exposures
are in the area of interest rate risk and foreign currency exchange rate
risk. The Company's investment portfolio of cash equivalents is subject to
interest rate fluctuations, but the Company believes this risk is immaterial
due to the short-term nature of these investments. The Company's business
outside the United States is conducted in local currency transaction. The
Company has no foreign exchange contracts, option contracts or other foreign
hedging arrangements. However, the Company estimates that any market risk
associated with its foreign operations is not significant and is unlikely to
have a material adverse effect on the Company's business, results of
operations, or financial condition.

                                       16

<PAGE>


                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings

On June 7, 1995, a lawsuit was filed against the Company by Avid Technology,
Inc. ("Avid") in the United States District Court for the District of
Massachusetts. The complaint generally alleges patent infringement by the
Company arising from the manufacture, sale, and use of the Company's Media 100
products. The complaint includes requests for injunctive relief, treble damages,
interest, costs and fees. In July 1995, the Company filed an answer and
counterclaim denying any infringement and asserting that the Avid patent in
question is invalid. The Company intends to vigorously defend the lawsuit. In
addition, Avid is seeking reissue of the patent, including claims that it
asserts are broader than in the existing patent, and these reissue proceedings
remain pending before the U.S. Patent and Trademark Office. On January 16, 1998,
the court dismissed the lawsuit without prejudice to either party moving to
restore it to the docket upon completion of all matters pending before the U.S.
Patent and Trademark Office. There can be no assurance that the Company will
prevail in the lawsuit asserted by Avid or that the expense or other effects of
the lawsuit, whether or not the Company prevails, will not have a material
adverse effect on the Company's business, operating results and financial
condition.

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

The Company held an annual meeting of stockholders on April 14, 1999, at which
the stockholders approved the following proposals by the number of shares of
Common Stock voted below:

PROPOSAL
<TABLE>
<CAPTION>

(1)  Election of Directors                     NUMBER OF SHARES
                                               ----------------
                                         VOTED FOR               AGAINST
                                         ---------               -------
<S>                                      <C>                     <C>
     John A. Molinari                    5,538,185               811,544
     Roger Redmond                       5,542,508               807,221
     Maurice L. Castonguay               5,542,100               807,629
     Bruce I. Sachs                      5,542,466               807,263
     Paul J. Severino                    5,541,800               807,929
     B. Robert Feingold                  5,540,619               809,110
</TABLE>

<TABLE>
<CAPTION>

                                                                                     NUMBER OF SHARES
                                                                                     ----------------
      (2)                                                       VOTED FOR     VOTED AGAINST      ABSTAINED     BROKER NON-VOTE
                                                                ---------     -------------      ---------     ---------------
<S>                                                             <C>               <C>              <C>             <C>
      Increase by 200,000 the number of shares of the
      Company's common stock, $.01 par value per
      share available for issuance under the 1986
      Employee Stock Purchase Plan for a total of
      800,000 shares available under such plan:                 5,893,649         359,448          12,022          84,610
</TABLE>

<TABLE>
<CAPTION>

      (3)
<S>                                                             <C>               <C>              <C>             <C>
      Increase by 200,000 the number of shares of the
      Company's common stock, $.01 par value per
      share available for issuance under the Key
      Employee Incentive Plan (1992) for a total of
      2,200,000 shares available under such plan:               4,959,032        1,294,506         11,581          84,610

</TABLE>

                                       17

<PAGE>


Item 6. Exhibits and Reports on Form 8-K

a)  Exhibits

Exhibits required as part of this Quarterly Report on Form 10-Q are listed in
the exhibit index on page 20.

b)  Reports on Form 8-K

No reports on Form 8-K have been filed during the quarter for which this report
is filed.

                                       18

<PAGE>


                                   SIGNATURES


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


                                   Media 100 Inc.




Date:    July 15, 1999             By:
                                      -----------------------------
                                             Steven D. Shea
                                      Vice President of  Finance and
                                      Treasurer
                                      (Principal Financial Officer)

                                       19

<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>


     NUMBER                         DESCRIPTION
     ------                         -----------
<S>           <C>

     10.2     1986 Employee Stock Purchase Plan, as amended through
              April 14, 1999

     10.3     Key Employee Incentive Plan (1992), as amended through
              April 14, 1999

     10.10    Agreement and Plan of Merger and Reorganization, dated May 6, 1999
              with Terran Interactive, Inc

     27       Financial Data Schedule

</TABLE>

                                       20