<PAGE>  
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                      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 QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       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 000-23305
  
                                   FVC.COM, INC.
                     (formerly First Virtual Corporation)
            (Exact name of registrant as specified in its charter)
  
  
                DELAWARE                          77-0357037
    (State or other jurisdiction of            (I.R.S. Employer
    incorporation or organization)          Identification Number)
  

                              3393 OCTAVIUS DRIVE
                                   SUITE 102
                            SANTA CLARA, CA  95054
                   (Address of principal executive offices)
                            ----------------------
                                       
                                (408) 567-7200
             (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 / /
  
  Common Stock, $0.001 Par Value                      15,940,792
  ------------------------------          -------------------------------
            (Class)                       Outstanding as of June 30, 1998
  -----------------------------------------------------------------------
  -----------------------------------------------------------------------

<PAGE>
                                  FVC.COM, INC.

                                   FORM 10-Q

                                     INDEX


PART I. FINANCIAL INFORMATION                                              PAGE


Item 1. Condensed Consolidated Financial Statements

        Condensed Consolidated Balance Sheets
        at June 30, 1998 and December 31, 1997 ........................     3

        Condensed Consolidated Statements of Operations
        for the three and six months ended June 30, 1998 and 1997 .....     4

        Condensed Consolidated Statements of Cash Flows
        for the six months ended June 30, 1998 and 1997 ...............     5

        Notes to Condensed Consolidated Financial Statements ..........     6

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations .....................................     9


PART II.OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds .....................    15

Item 5. Other Information .............................................    16

Item 6. Exhibits and Reports on Form 8-K ..............................    16

SIGNATURES ............................................................    17

Exhibit Index .........................................................    18
 
                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                  FVC.COM, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                  (IN THOUSANDS, EXCEPT SHARE DATA; UNAUDITED)


<TABLE>
<CAPTION>  
                                                                                   JUNE 30,         DECEMBER 31,
                                                                                    1998                1997
                                                                                  ----------       ------------

                                                    ASSETS
  <S>                                                                             <C>               <C>
  
  Current assets:
    Cash and cash equivalents                                                      $  32,034         $  2,500
    Accounts receivable, net                                                           5,704            2,469
    Inventory                                                                          3,336            4,178
    Prepaid expenses and other current assets                                            547              627
                                                                                   ----------        ---------
       Total current assets                                                           41,621            9,774
  Property and equipment, net                                                          1,593            1,043
  Other assets                                                                         1,709              287
                                                                                   ----------        ---------
                                                                                   $  44,923        $  11,104
                                                                                   ----------        ---------
                                                                                   ----------        ---------
  
                                              LIABILITIES AND STOCKHOLDERS' EQUITY
  
  Current liabilities:
    Borrowings under short-term credit facilities                                      $  -         $  1,306
    Current portion of long-term debt                                                    63              848
    Accounts payable                                                                  3,321            4,141
    Accrued liabilities                                                               1,560            1,326
    Deferred revenue                                                                    105              262
                                                                                   ----------        ---------
       Total current liabilities                                                      5,049            7,883
                                                                                   ----------        ---------
  Long-term debt, net of current portion                                                105            1,312
                                                                                   ----------        ---------
  Stockholders' equity:
       Convertible Preferred Stock, $.001 par value; 5,000,000 and
       10,000,000 shares authorized, respectively; 0 and
    8,040,153 shares issued and outstanding, respectively                                  -               8
   Common Stock, $.001 par value; 35,000,000 and 30,000,000
    shares authorized, respectively; 15,940,792 and
    4,824,684 shares issued and outstanding, respectively                                16                5
   Additional paid-in capital                                                        55,423           17,267
   Notes receivable from stockholders                                                  (765)            (837)
   Accumulated deficit                                                              (14,905)         (14,534)
                                                                                   ----------        ---------
       Total stockholders' equity                                                    39,769            1,909
                                                                                   ----------        ---------
                                                                                  $  44,923        $  11,104
                                                                                   ----------        ---------
                                                                                   ----------        ---------
  
</TABLE>

       See accompanying notes to condensed consolidated financial statements.

                                       3

<PAGE>

                                  FVC.COM, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (IN THOUSANDS, EXCEPT PER SHARE DATA; UNAUDITED)

<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED             SIX MONTHS ENDED
                                                               JUNE 30,                       JUNE 30,
                                                      --------------------------      -----------------------
                                                          1998           1997           1998           1997
                                                      -----------     ----------      ---------     ---------
<S>                                                  <C>             <C>           <C>             <C>

Revenues                                              $  10,991       $  3,413      $  20,033       $  6,143
Cost of revenues                                          5,973          1,898         10,805          3,475
                                                      -----------     ----------      ---------     ---------
    Gross profit                                          5,018          1,515          9,228          2,668
                                                      -----------     ----------      ---------     ---------
Operating expenses:
    Research and development                              1,987          1,252          3,871          2,205
    Selling, general and administrative                   2,730          1,598          5,347          2,948
                                                      -----------     ----------      ---------     ---------
             Total operating expenses                     4,717          2,850          9,218          5,153
                                                      -----------     ----------      ---------     ---------
Operating income (loss)                                     301        (1,335)             10         (2,485)
Other income (expense), net                                (180)          (35)           (381)           (51)
                                                      -----------     ----------      ---------     ---------
Net Income (loss)                                     $     121     $  (1,370)      $    (371)     $  (2,536)
                                                      -----------     ----------      ---------     ---------
                                                      -----------     ----------      ---------     ---------
Earnings (loss) per share:
    Basic                                             $    0.01     $   (0.47)      $   (0.05)     $   (0.91)
                                                      -----------     ----------      ---------     ---------
                                                      -----------     ----------      ---------     ---------
    Diluted                                           $    0.01     $   (0.47)      $   (0.05)     $   (0.91)
                                                      -----------     ----------      ---------     ---------
                                                      -----------     ----------      ---------     ---------
Shares used to compute earnings
    (loss) per share:

    Basic                                                10,597         2,912           7,504          2,780
                                                      -----------     ----------      ---------     ---------
                                                      -----------     ----------      ---------     ---------
    Diluted                                              15,478         2,912           7,504          2,780
                                                      -----------     ----------      ---------     ---------
                                                      -----------     ----------      ---------     ---------


</TABLE>

    See accompanying notes to condensed consolidated financial statements.
  
                                       4

<PAGE>

                                  FVC.COM, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (IN THOUSANDS; UNAUDITED)


<TABLE>
<CAPTION>

 
                                                                                 SIX MONTHS ENDED
                                                                                     JUNE 30,
                                                                             ----------------------------
                                                                                  1998           1997
                                                                             ----------------------------
<S>                                                                           <C>            <C>
 Cash flows from operating activities:
      Net loss                                                                 $  (371)       $  (2,536)
         Adjustments to reconcile net loss to net cash
            provided by (used in) operating activities:
      Depreciation and amortization                                                749              247
      Non-cash stock compensation                                                  678              251
      Other                                                                        228                -
               Changes in assets and liabilities:
         Accounts receivable                                                    (3,419)             172
         Inventory                                                                 842              407
         Prepaid expenses and other current assets                                  80                -
         Other assets                                                             (458)               4
         Accounts payable                                                         (820)            (584)
         Accrued liabilities                                                       234              317
         Deferred revenue                                                         (157)              10
                                                                                -------          --------
               Net cash used in operating activities                            (2,414)          (1,712)
                                                                                -------          --------
 Cash flows used in investing activities
      for acquisition of property and equipment                                   (921)            (345)
                                                                                -------          --------
 Cash flows from financing activities:
      Borrowings under short-term credit facilities                              3,600              801
      Repayment of short-term credit facilities                                 (4,906)            (494)
      Proceeds from long-term debt                                                   -            1,250
      Repayment of long-term debt                                               (2,014)             (41)
      Proceeds from issuance of stock, net                                      36,299              128
      Repayment of capital lease obligations                                      (110)             (90)
                                                                                -------          --------
               Net cash provided by financing activities                        32,869            1,554
                                                                                -------          --------
 Net increase (decrease) in cash and cash equivalents                           29,534             (503)
 Cash and cash equivalents at beginning of period                                2,500              676
                                                                                -------          --------
 Cash and cash equivalents at end of period                                  $  32,034           $  173
                                                                                -------          --------
                                                                                -------          --------
 
 Supplemental cash flow information:
      Cash paid for interest                                                    $  192            $  84
      Issuance of warrants to third parties                                      1,213              159
 
</TABLE>

    See accompanying notes to condensed consolidated financial statements.

                                       5

<PAGE>

                                  FVC.COM, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                       
                                       
1.   Change of Name

     On August 3, 1998, the Company changed its name from First Virtual 
Corporation to FVC.COM, Inc.

2.   Basis of Presentation

     The unaudited condensed consolidated financial statements included 
herein reflect all adjustments, consisting only of normal recurring 
adjustments, which in the opinion of management are necessary to fairly state 
the Company's consolidated financial position, results of operations and cash 
flows for the periods presented.  These consolidated financial statements 
should be read in conjunction with the Company's audited consolidated 
financial statements included in the Company's Registration Statement on Form 
S-1, File No. 333-38755, declared effective on April 29, 19988.The results 
of operations for the period ended June 30, 1998 are not necessarily 
indicative of the results to be expected for any subsequent quarter or for 
the entire year ending December 31, 1998.  The December 31, 1997 balance 
sheet was derived from audited financial statements, but does not include all 
disclosures required by generally accepted accounting principles.

3.   Inventory

     Inventories as of June 30, 1998 and December 31, 1997 were as follows 
(in thousands):

-------------------------------------------------------------------------------
                                               June 30,            December 31,
                                                 1998                  1997
-------------------------------------------------------------------------------
Raw materials                                 $  1,338             $  1,418
Finished goods                                   1,998                2,760
-------------------------------------------------------------------------------
Total inventory                               $  3,336             $  4,178
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

4.   Earnings (Loss) Per Share

     Earnings (loss) per share is computed in accordance with Statement of 
Financial Accounting Standards No. 128 "Earnings Per Share" ("FAS 128").  FAS 
128 requires the Company to report both basic earnings (loss) per share, 
which is based on the weighted-average number of common shares outstanding 
excluding contingently issuable or returnable shares such as shares of 
unvested restricted Common Stock, and diluted earnings (loss) per share, 
which is based on the weighted-average number of common shares outstanding 
and dilutive potential common shares outstanding.

     As a result of the losses incurred by the Company for the three months 
ended June 30, 1997 and the six months ended June 30, 1998 and 1997, all 
potential common shares were anti-dilutive and were excluded from the diluted 
net loss per share calculations for such periods.

                                       6

<PAGE>
     
     The following table sets forth a reconciliation of the computation of 
basic and diluted earnings (loss) per share under the provisions of FAS 128 
(in thousands, except per share data):

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                     JUNE 30,                        JUNE 30,
                                                            --------------------------     -------------------------
                                                            1998             1997           1998            1997
                                                            --------------------------     -------------------------
<S>                                                         <C>        <C>                <C>             <C>

Net income (loss)                                          $    121     $  (1,370)         $  (371)       $  (2,536)
                                                           --------     ----------         --------       ----------
                                                           --------     ----------         --------       ----------
Weighted-average common shares outstanding
   (excluding unvested restricted common stock)              10,597         2,912            7,504            2,780

Effect of dilutive potential common shares:
   Unvested restricted common stock                             866             -                -               -
   Convertible preferred stock                                2,680             -                -               -
   Stock options                                              1,301             -                -               -
   Warrants                                                      34             -                -               -
                                                           --------     ----------         --------       ----------
Weighted-average common and dilutive
   potential common shares outstanding                       15,478         2,912            7,504           2,780
                                                           --------     ----------         --------       ----------
                                                           --------     ----------         --------       ----------
Earnings (loss) per share:
   Basic                                                   $   0.01     $   (0.47)      $    (0.05)      $   (0.91)
   Diluted                                                 $   0.01     $   (0.47)      $    (0.05)      $   (0.91)

</TABLE>


     The potential common shares related to unvested restricted Common Stock 
represent stock that has been issued but which is subject to repurchase to 
the extent the holder does not remain associated with the Company until such 
shares are vested.  The potential common shares related to Convertible 
Preferred Stock are attributable to 8,040,153 shares of Convertible Preferred 
Stock which, upon completion of the Company's initial public offering in May 
1998, automatically converted into the same number of shares of Common Stock. 
 Substantially all outstanding stock options and warrants were included in 
the computation of diluted earnings per share for the three months ended June 
30, 1998.

5.   Credit Facilities

     In February 1998, the Company agreed in principle to enter into a 
transaction with Hambrecht & Quist Guaranty Finance, LLC ("Guaranty 
Finance"), whereby Guaranty Finance would loan the Company up to $5 million.  
Under the related agreements which were executed on March 12, 1998 and 
subsequently amended on April 24, 1998, (i) Guaranty Finance agreed to lend 
the Company up to $5 million at an interest rate of 12% per annum, $1.1 
million of which was loaned to the Company in March 1998 and $1.5 million of 
which was loaned to the Company in April 1998 (the "Loan") and (ii) Guaranty 
Finance purchased from the Company for $1,250 a warrant to purchase 125,000 
shares of the Company's Common Stock at a per share purchase price equal to 
the initial public offering price of $13.00.  The warrant is exercisable 
through March 1, 2003.  The fair value of this warrant was estimated to be 

                                       7

<PAGE>

$563,000 and is being expensed as an additional cost of financing in 1998.  
The Company also paid a $100,000 fee to Guaranty Finance in consideration for 
entering into the Loan.

     In June 1998, the Company amended its working capital line of credit 
agreement with a bank.  The amended agreement provides for borrowings of up 
to $10 million.  Borrowings under the line of credit are limited to a 
specified percentage of eligible accounts receivable and inventory, and are 
secured by substantially all of the Company's accounts receivable and 
inventory.  Interest on borrowings is set at the bank's prime rate (8.5% at 
June 30, 1998).  Among other provisions, the Company is required to maintain 
certain financial covenants and is prohibited from paying dividends.  The 
line of credit agreement expires in June 2000.  As of June 30, 1998, the 
Company had no borrowings outstanding under this line.

6.   Initial Public Offering

     In May 1998, the Company completed its initial public offering whereby 
the Company sold 3,132,000 shares of Common Stock.  Net proceeds to the 
Company aggregated $36.3 million.  The Company used $6.9 million of the net 
proceeds from the offering to repay outstanding indebtedness, including $2.3 
million for borrowings under the working capital line of credit and $2.6 
million for the outstanding balance of the Loan.

7.   New Accounting Pronouncement

     In June 1998, the FASB issued Statement of Financial Accounting 
Standards No. 133, "Accounting for Derivative Instruments and Hedging 
Activities" (FAS 133).  The new standard requires companies to record 
derivatives on the balance sheet as assets or liabilities, measured at fair 
value.  Under FAS 133, gains or losses resulting from changes in the values 
of derivatives are to be reported in the statement of operations or as a 
deferred item, depending on the use of the derivatives and whether they 
qualify for hedge accounting.  The key criterion for hedge accounting is that 
the derivative must be highly effective in achieving offsetting changes in 
fair value or cash flows of the hedged items during the term of the hedge.  
The Company is required to adopt FAS 133 in the first quarter of 2000 and is 
currently evaluating the effect, if any, of adopting the new standard.

8.   Subsequent Event

     On July 30, 1998, the Company entered into an agreement to acquire ICAST 
Corporation ("ICAST") in exchange for 425,000 shares of the Company's Common 
Stock and the assumption of certain liabilities and outstanding ICAST stock 
options.  ICAST develops, markets and supports software designed for Internet 
and Intranet broadcasting of real-time video, audio and data.  The 
acquisition, which is expected to be consummated in August 1998, will be 
accounted for under the purchase method of accounting.  The Company currently 
anticipates that the acquisition, when completed, will result in a 
significant charge to earnings for in-process research and development.

                                       8

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
         
     THE COMPANY NOTES THAT, EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED 
HEREIN, THE MATTERS DISCUSSED BELOW CONTAIN FORWARD-LOOKING STATEMENTS WHICH 
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 ANY FUTURE RESULTS, 
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING 
STATEMENTS.  THE COMPANY EXPRESSLY DISCLAIMS ANY OBLIGATION TO UPDATE THIS 
INFORMATION OR PUBLICLY RELEASE ANY REVISIONS OR REFLECT EVENTS OR 
CIRCUMSTANCES AFTER THE DATE OF THIS REPORT.  SUCH FACTORS INCLUDE, AMONG 
OTHERS: THE COMPANY'S LIMITED OPERATING HISTORY AND VARIABILITY OF OPERATING 
RESULTS, MARKET ACCEPTANCE OF VIDEO TECHNOLOGY, DEPENDENCE ON ATM BACKBONE 
TECHNOLOGY AND THE NEXT GENERATION INTERNET, POTENTIAL INABILITY TO MAINTAIN 
BUSINESS RELATIONSHIPS WITH DISTRIBUTORS AND SUPPLIERS, RAPID TECHNOLOGICAL 
CHANGES, COMPETITION IN THE VIDEO NETWORKING INDUSTRY, THE IMPORTANCE OF 
ATTRACTING AND RETAINING PERSONNEL, MANAGEMENT OF THE COMPANY'S GROWTH, 
CONSOLIDATION AND COST PRESSURES IN THE VIDEO NETWORKING INDUSTRY, DEPENDENCE 
ON KEY EMPLOYEES, THE RISK THAT THE ICAST ACQUISITION WILL NOT BE CONSUMMATED 
ON SCHEDULE, OR AT ALL, THE RISK THAT THE INTEGRATION OF THE COMPANY'S AND 
ICAST'S RESPECTIVE BUSINESS OPERATIONS WILL NOT BE ACHIEVED IN A TIMELY AND 
EXPECTED MANNER, OR THAT KEY PERSONNEL OF ICAST ARE NOT SUCCESSFULLY 
RETAINED, AND OTHER RISK FACTORS REFERENCED IN THE COMPANY'S REGISTRATION 
STATEMENT ON FORM S-1, FILE NO. 333-38755, DECLARED EFFECTIVE ON APRIL 29, 
1998.

OVERVIEW

     The Company provides a high quality, cost effective video networking 
solution for the Next Generation Internet that integrates video with voice 
and data, while leveraging existing network infrastructures.  The Company's 
products enable end-to-end video in a wide range of room and desktop 
environments for video applications such as distance learning, distance 
meetings and distance medicine.  The Company was incorporated in California 
in October 1993 and reincorporated in Delaware in December 1997.  The Company 
first shipped its video networking products in 1995.

     The Company sells its products worldwide through original equipment 
manufacturer ("OEM") partners, distributors and resellers.  The Company 
established strategic relationships with Bay Networks, Inc. ("Bay Networks") 
in November 1995, Northern Telecom, Inc. ("Nortel") in May 1997 and Ascend 
Communications, Inc. ("Ascend Communications") in May 1998.  In November 
1995, the Company granted Bay Networks the worldwide non-exclusive right to 
market and sell certain of the Company's products.  In September 1996, the 
Company granted Bay Networks the worldwide non-exclusive right to market and 
sell all of the Company's current and future products, under both the 
Company's and Bay Networks' names.  In May 1997, the Company granted similar 
rights to Nortel to market the Company's products under the Company's name.  
In May 1998, the Company granted rights to Ascend Communications to market 
and sell certain of the Company's products under the Company's name on a 
world-wide non-exclusive basis.  Sales through Bay Networks represented 54%, 
64% and 29% of the Company's revenues in the six months ended June 30, 1998 
and the years ended December 31, 1997 and 1996, respectively.  Sales by 
Nortel and Ascend Communications have not been significant to date.  The 
Company also plans to enter into additional distribution agreements.

     Nortel recently announced its plans to acquire Bay Networks.  The 
Company does not believe that the acquisition of Bay Networks by Nortel will 
have a material adverse effect on its future operating results.

                                       9

<PAGE>

     The Company recognizes revenues upon shipment of products to customers, 
provided that no significant obligations remain and collectibility is 
probable. The OEM partners generally have no rights of return and have 
historically carried limited amounts of inventories of the Company's 
products.  Agreements with certain distribution partners contain price 
protection provisions and certain return rights.  Accordingly, the Company 
records a provision for estimated future returns and price protection upon 
revenue recognition.  To date, returns and charges for price protection have 
not been material.

     Direct sales from shipments to customers outside of North America 
accounted for approximately 20%, 20% and 36% of the Company's revenues in the 
six months ended June 30, 1998, and the years ended December 31, 1997 and 
1996, respectively.  The Company expects that direct sales from shipments to 
customers outside of North America will continue to represent a significant 
portion of its future revenues.  In addition, the Company believes that a 
small portion of its sales through Bay Networks and other distribution 
partners is sold to international end-users.  Revenues from the Company's 
international operations are subject to various risks.  To date, the Company 
has not engaged in any foreign currency hedging activity.

     The Company has in the past experienced, and may from time to time in 
the future experience, fluctuations in revenues, gross margins and operating 
results.  The Company adopted a strategy in the fourth quarter of 1996 to 
focus on a limited number of substantial end-user projects, rather than on 
the implementation of a large number of evaluation and demonstration 
projects.  The initial impact of this change of strategy was a decrease in 
revenues from $3.9 million in the fourth quarter of 1996 to $2.7 million in 
the first quarter of 1997.  The Company's focus on a limited number of large 
end-user projects has resulted in, and may in the future result in, 
significant fluctuations in quarterly revenues.  There can be no assurance 
that revenues will increase on a quarterly basis or at all. The Company's 
gross margins have also historically fluctuated from period to period and are 
expected to continue to fluctuate in the future. Gross margins are 
significantly influenced by a variety of factors, including product mix, 
percentage of revenues derived from OEM partners versus distributors or 
resellers, pricing within the video networking industry and the prices of 
significant components used in the Company's products.  The Company generally 
recognizes higher margins from video products and value added switch modules 
and lower margins from base model V-Switches and adapter cards.

     Various factors, in addition to those discussed above, contribute to the 
fluctuations in revenues, gross margins and operating results, including but 
not limited to the development of the market for video networking and for the 
Company's products, the Company's success in developing, introducing and 
shipping new products and product enhancements, the Company's success in 
accurately forecasting demand for new orders, new product introductions and 
price reductions by the Company's competitors. Further, a significant portion 
of the Company's expenses is fixed in advance.  The Company expects that 
operating expenses will increase in the future to fund expanded operations. 
To the extent that these increased expenses are not accompanied by an 
increase in revenues, the Company's business, financial condition and results 
of operations would be materially adversely affected.  If revenues or gross 
margins were below Company expectations in any given period, the Company's 
inability to adjust operating expenses in response would adversely affect 
operating results.

     The Company outsources certain functions to independent service 
providers. The Company's products are manufactured primarily by Tanon 
Manufacturing, Inc. and accounting and data processing functions are 
performed by KPMG Peat Marwick LLP.

     On July 30, 1998, the Company entered into an agreement to acquire ICAST 
Corporation ("ICAST") in exchange for 425,000 shares of First Virtual Common 
Stock and the assumption of certain

                                       10

<PAGE>

liabilities and outstanding ICAST stock options.  ICAST develops, markets and 
supports software designed for Internet and Intranet broadcasting of 
real-time video, audio and data.  The acquisition, which is expected to be 
consummated in August 1998, will be accounted for under the purchase method 
of accounting.  The Company currently anticipates that the acquisition, when 
completed, will result in a significant charge to earnings for in-process 
research and development.

RESULTS OF OPERATIONS

     The following table sets forth certain items from the Company's condensed
     consolidated statements of operations as a percentage of total revenues
     for the periods indicated.
     
<TABLE>
<CAPTION>

                                                                   THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                          JUNE 30,                        JUNE 30,
                                                                --------------------------------------------------------
                                                                   1998           1997           1998            1997
                                                                ----------     ----------     ----------      ----------
<S>                                                             <C>            <C>            <C>            <C>
Revenues                                                         100.0%         100.0%         100.0%         100.0%
Cost of revenues                                                  54.3%          55.6%          53.9%          56.6%
                                                                ----------     ----------     ----------      ----------
       Gross profit                                               45.7%          44.4%          46.1%          43.4%
                                                                ----------     ----------     ----------      ----------

Operating expenses:
       Research and development                                   18.1%          36.7%          19.3%          35.9%
       Selling, general and administrative                        24.8%          46.8%          26.7%          48.0%
                                                                ----------     ----------     ----------      ----------
             Total operating expenses                             42.9%          83.5%          46.0%          83.9%
                                                                ----------     ----------     ----------      ----------
Operating income (loss)                                            2.7%         (39.1%)          0.0%         (40.5%)
Other income (expense), net                                       (1.6%)         (1.0%)         (1.9%)         (0.8%)
                                                                ----------     ----------     ----------      ----------

Net income (loss)                                                  1.1%         (40.1%)         (1.9%)        (41.3%)
                                                                ----------     ----------     ----------      ----------
                                                                ----------     ----------     ----------      ----------
</TABLE>

 (1) Operating expenses include non-cash employee stock compensation charges of
  $262,000 (2.4% of total revenues) and $112,000 (3.3% of total revenues) for
  the three months ended June 30, 1998 and 1997, respectively, and $678,000
  (3.4% of total revenues) and $251,000 (4.0% of total revenues) for the six
  months ended June 30, 1998 and 1997, respectively.
  
     REVENUES.  Revenues increased 222%, to $11.0 million for the three 
months ended June 30, 1998, from $3.4 million for the three months ended June 
30, 1997.  Revenues increased 226%, to $20.0 million for the six months ended 
June 30, 1998, from $6.1 million for the six months ended June 30, 1997. The 
increases in revenues for both the three and six month periods resulted from 
wider acceptance of the Company's products as a result of marketing efforts 
of the Company and its strategic partners.  Sales through Bay Networks 
increased 316%, to $6.6 million for the three months ended June 30, 1998, 
from $1.6 million for the three months ended June 30, 1997, and increased 
268%, to $10.8 million for the six months ended June 30, 1998, from $2.9 
million for the six months ended June 30, 1997.

     GROSS PROFIT.  Gross profit consists of revenues less the cost of 
revenues, which consists primarily of costs associated with the manufacture
of the Company's products by Tanon Manufacturing,

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<PAGE>

Inc. and other manufacturers and related costs of freight, inventory 
obsolescence, royalty and warranty.  These manufacturers procure the majority 
of materials, except for certain key components which the Company purchases 
from third-party vendors.

     Gross profit increased to $5.0 million for the three months ended June 
30, 1998, from $1.5 million for the three months ended June 30, 1997.  Gross 
margin (gross profit as a percentage of revenues) increased to 45.7% for the 
three months ended June 30, 1998, from 44.4% for the three months ended June 
30, 1997.  Gross profit increased to $9.2 million for the six months ended 
June 30, 1998, from $2.7 million for the six months ended June 30, 1997.  
Gross margin increased to 46.1% for the six months ended June 30, 1998, from 
43.4% for the six months ended June 30, 1997.  The increases in gross profit 
for both the three and six month periods ended June 30, 1998 over the 
comparable periods in 1997 were primarily due to the related increases in 
revenues.  The increases in gross margin for both the three and six month 
periods ended June 30, 1998 over the comparable periods in 1997 were due to a 
shift in mix to higher margin products, as well as decreases in product costs 
for certain of the Company's products.

     RESEARCH AND DEVELOPMENT.  Research and development expenses consist 
primarily of personnel costs, costs of contracts and outside consultants, 
supplies and material expenses, equipment depreciation and overhead costs. 
Research and development expenses increased 59%, to $2.0 million for the 
three months ended June 30, 1998, from $1.3 million for the three months 
ended June 30, 1997.  As a percentage of total revenues, research and 
development expenses decreased to 18.1% for the three months ended June 30, 
1998, from 36.7% for the three months ended June 30, 1997.  Research and 
development expenses increased 76%, to $3.9 million for the six months ended 
June 30, 1998, from $2.2 million for the six months ended June 30, 1997.  As 
a percentage of total revenues, research and development expenses decreased 
to 19.3% for the six months ended June 30, 1998, from 35.9% for the six 
months ended June 30, 1997.  The increases in absolute dollars were the 
result of hiring additional engineers and consultants for product development 
and non-cash compensation charges relating to the Company's employee stock 
plans, which increased to $111,000 and $285,000, respectively, for the three 
and six month periods ended June 30, 1998, from $55,000 and $120,000, 
respectively, for the three and six month periods ended June 30, 1997.  The 
decreases as a percentage of revenues were due to the relatively greater 
increases in revenues for the three and six month periods ended June 30, 1998 
than in the level of research and development expenses for those periods.  
The Company believes that research and development expenses will continue to 
increase in absolute dollars for the foreseeable future.  However, such 
expenses will fluctuate depending on various factors, including the status of 
development projects.

     SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and 
administrative expenses include personnel and related overhead costs for 
sales, marketing, finance, human resources and general management.  Such 
expenses also include costs of outside contractors, advertising, trade shows 
and other marketing and promotional expenses.  Selling, general and 
administrative expenses increased 71%, to $2.7 million for the three months 
ended June 30, 1998, from $1.6 million for the three months ended June 30, 
1997.  As a percentage of total revenues, selling, general and administrative 
expenses decreased to 24.8% for the three months ended June 30, 1998, from 
46.8% for the three months ended June 30, 1997.  Selling, general and 
administrative expenses increased 81%, to $5.3 million for the six months 
ended June 30, 1998, from $2.9 million for the six months ended June 30, 
1997.  As a percentage of total revenues, selling, general and administrative 
expenses decreased to 26.7% for the six months ended June 30, 1998, from 
48.0% for the six months ended June 30, 1997.  The increases in absolute 
dollars were the result of the expansion of the Company's sales and marketing 
infrastructure, in addition to higher marketing and selling costs, and to 
non-cash compensation charges relating to the Company's employee

                                       12

<PAGE>

stock plans, which increased to $152,000 and $394,000, respectively, for the 
three and six month periods ended June 30, 1998, from $57,000 and $131,000, 
respectively, for the three and six month periods ended June 30, 1997.  The 
decreases as a percentage of revenues were due to the relatively greater 
increases in revenues for the three and six month periods ended June 30, 1998 
than in the level of selling, general and administrative expenses for those 
periods.  The Company anticipates that selling, general and administrative 
expenses will continue to increase in absolute dollars in the foreseeable 
future as the Company expands its selling and marketing efforts and incurs 
the administrative costs associated with being a publicly-held company.

     OTHER INCOME (EXPENSE) NET.  Other income (expense), net consists 
primarily of interest expense relating to the Company's credit facilities and 
long-term debt, offset in part by interest income earned on cash balances. 
Other income (expense), net increased to a net expense of $180,000 for the 
three months ended June 30, 1998, from a net expense of $35,000 for the three 
months ended June 30, 1997. Other income (expense), net increased to a net 
expense of $381,000 for the six months ended June 30, 1998, from a net 
expense of $51,000 for the six months ended June 30, 1997.  The increases for 
both the three and six month periods ended June 30, 1998 resulted from the 
relatively higher level of borrowings during the 1998 periods as compared to 
the corresponding 1997 periods.

     INCOME TAXES.  The Company has incurred losses since inception.  No 
benefit has been recorded for income taxes for any of the periods presented 
as the Company believes that, based on the history of such losses and other 
factors, the weight of available evidence indicates that it is more likely 
than not that it will not be able to realize the benefit of these net 
operating losses, and thus a full valuation reserve has been recorded.

LIQUIDITY AND CAPITAL RESOURCES

     Since inception through completion of its initial public offering in May 
1998, the Company financed its operations primarily through private 
placements of equity securities, raising an aggregate of approximately $14.8 
million, net of issuance costs, and to a lesser extent through certain credit 
facilities and long-term debt.  As of June 30, 1998, the Company had cash and 
cash equivalents of  $32.0 million and working capital of $36.6 million.

     During the six months ended June 30, 1998, the Company used $2.4 million 
in its operating activities, primarily to fund an increase in accounts 
receivable of $3.4 million offset in part by a decrease in inventory of 
$842,000.  The increase in accounts receivable was due to increased sales. 
During the six months ended June 30, 1997, the Company had a net loss of $2.5 
million which was offset in part by a decrease in inventory of $407,000, 
resulting in $1.7 million of cash used in operating activities.

     Cash used for investing activities for acquisition of property and 
equipment was $921,000 for the six months ended June 30, 1998, compared to 
$345,000 for the six months ended June 30, 1997.  The capital expenditures 
consisted of purchases of computers and related equipment, furniture and 
fixtures necessary to support the Company's growth.  To date the Company has 
not made significant outlays for capital expenditures because of its strategy 
to outsource manufacturing and certain other functions.

     The Company has a working capital line of credit with a bank, which 
provides for borrowings of up to $10 million.  Borrowings under the line of 
credit bear interest at the bank's prime rate (8.5% at June 30, 1998), are 
secured by certain assets of the Company and are limited to certain 
percentages of the Company's accounts receivable and inventory balances.  As 
of June 30, 1998, the Company had no borrowings outstanding under this line.  
The line, which expires in June 2000, requires the Company to

                                       13

<PAGE>

comply with certain financial ratios and covenants, and also limits the 
Company's ability to pay dividends.

     In February 1998, the Company agreed in principle to enter into a 
transaction with Hambrecht & Quist Guaranty Finance, LLC ("Guaranty 
Finance"), whereby Guaranty Finance would loan the Company up to $5 million.  
Under the related agreements which were executed on March 12, 1998 and 
subsequently amended on April 24, 1998, (i) Guaranty Finance agreed to lend 
the Company up to $5 million at an interest rate of 12% per annum, $1.1 
million of which was loaned to the Company in March 1998 and $1.5 million of 
which was loaned to the Company in April 1998 (the "Loan") and (ii) Guaranty 
Finance purchased from the Company for $1,250 a warrant to purchase 125,000 
shares of the Company's Common Stock at a per share purchase price equal to 
the initial public offering price of $13.00.  The warrant is exercisable 
through March 1, 2003.  The fair value of this warrant was estimated to be 
$563,000 and is being expensed as an additional cost of financing in 1998.  
The Company also paid a $100,000 fee to Guaranty Finance in consideration for 
entering into the Loan.

     In May 1998, the Company completed its initial public offering whereby 
the Company sold 3,132,000 shares of Common Stock.  Net proceeds to the 
Company aggregated $36.3 million.  The Company used $6.9 million of the net 
proceeds from its initial public offering to repay outstanding indebtedness, 
including $2.3 million for borrowings under the working capital line of 
credit and $2.6 million for the outstanding balance of the Loan.

     The Company believes that its cash and cash equivalents of $32.0 million 
at June 30, 1998, together with existing sources of liquidity, will provide 
adequate cash to fund its operations for at least the next 12 months. 
Thereafter, if cash generated by operations is insufficient to satisfy the 
Company's liquidity requirements, the Company may be required to sell 
additional equity or debt securities or increase its lines of credit.  The 
sale of additional equity or convertible debt securities may result in 
additional dilution to the Company's stockholders.

YEAR 2000 COMPLIANCE

     The Company uses a significant number of computer software programs and 
operating systems in its internal operations, as well as its products.  The 
use of computer programs that rely on two-digit date programs to perform 
computations and decision-making functions may cause computer systems to 
malfunction in the year 2000 and lead to significant business delays and 
disruptions.  While the Company believes that the software applications that 
it uses or has developed are year 2000 compliant, to the extent that any of 
these software applications contain source code that is unable to 
appropriately interpret the upcoming calendar year 2000, some level of 
modification or possible replacement of such source code or applications will 
be necessary. The Company has analyzed the software applications that it uses 
or has developed and, as a result, the Company at this time does not 
anticipate any significant expense in ensuring that they are year 2000 
compliant.  However, until the year 2000 arrives, the Company cannot be 
absolutely certain that its analysis is correct.  Additionally, there can be 
no assurance that the Company's suppliers, vendors or other enterprises with 
which the Company interacts are or will be year 2000 compliant.  Failure of 
third-party enterprises with which the Company interacts to achieve year 2000 
compliance could have a material adverse effect on the Company's business, 
financial condition and results of operations.

                                       14

<PAGE>

PART II.  OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS.

(c)  In May 18, 1998, as part of an agreement entered into between the 
Company and Tanon Manufacturing, Inc. ("Tanon"), the Company issued to Tanon 
a warrant to purchase 100,000 shares of Common Stock at a per share exercise 
price equal to $9.00 (the "Securities").  The warrant is exercisable through 
May 18, 2001. The fair value of this warrant was estimated to be $650,000 and 
is being expensed as an element of cost of sales.

     The issuance and sale of the Securities was intended to be exempt from 
registration and prospectus delivery requirements under the Securities Act of 
1933, as amended (the "Securities Act"), by virtue of Section 4(2) thereof 
due to, among other things, (i) the limited number of persons to whom the 
Securities were issued, (ii) the distribution of disclosure documents to the 
investor, (iii) the fact that such entity represented and warranted to the 
Company, among other things, that such entity was acquiring the Securities 
for investment only and not with a view to the resale or distribution 
thereof, and (iv) the fact that a certificate representing the Securities was 
issued with a legend to the effect that such Securities had not been 
registered under the Securities Act or any state securities laws and could 
not be sold or transferred in the absence of such registration or an 
exemption therefrom.

(d)  The effective date of the Company's registration statement, filed on 
Form S-1 under the Securities Act of 1933 (File No. 333-38755), was April 29, 
1998 (the "Registration Statement").  The class of securities registered was 
Common Stock and all securities registered were sold in the offering.  The 
managing underwriters for the offering were BancAmerica Robertson Stephens; 
Bear, Stearns & Co. Inc.; and Hambrecht & Quist LLC.  Pursuant to the 
Registration Statement, the Company sold 3,132,000 shares of its Common Stock 
for an aggregate offering price of $40,716,000.  Also pursuant to the 
Registration Statement, certain selling stockholders of the Company sold 
180,000 shares of Common Stock of the Company for an aggregate offering price 
of $2,340,000.

     In connection with the public offering, the Company incurred expenses of 
approximately $4.7 million, of which approximately $2.9 million represented 
underwriting discounts and commissions and approximately $1.8 million 
represented other expenses related to the offering.  All such expenses were 
direct or indirect payments to others.  The net offering proceeds to the 
Company and the selling stockholders after total expenses were $36.3 million 
and $2.2 million, respectively.

     Through June 30, 1998, the Company has used $6.9 million of the net 
proceeds from the offering to repay outstanding indebtedness, including $2.3 
million for borrowings under the working capital line of credit and $2.6 
million for the outstanding balance of the Loan, and $7.2 million for working 
capital and general corporate purposes.  The Company has invested the 
remainder of the net proceeds in short-term, investment-grade, interest 
bearing financial instruments. The use of the proceeds from the offering does 
not represent a material change in the use of the proceeds described in the 
Registration Statement.

                                       15

<PAGE>

ITEM 5.  OTHER INFORMATION

     Pursuant to the Company's bylaws, stockholders who wish to bring matters
or propose nominees for director at the Company's 1999 annual meeting of
stockholders (the "1999 Annual Meeting") must provide specified information to
the Company not earlier than the close of business on the 90th day prior to the
1999 Annual Meeting and not later than the close of business on the 60th day
prior to the 1999 Annual Meeting, or, in the event of a public announcement of
the date of the 1999 Annual Meeting fewer than 70 days prior to the date of the
1999 Annual Meeting, not later than the close of business on the 10th day
following public announcement of the date of such meeting (unless such matters
are included in the Company's proxy statement pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended).

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  EXHIBITS

    EXHIBIT
    NUMBER                   DESCRIPTION OF DOCUMENTS

    3.1(1)      Amended and Restated Certificate of Incorporation
    3.1(i)      Certificate of Ownership and Merger, effective August 3, 1998
    3.2(1)      Bylaws of the Registrant
    4.1         Specimen Common Stock Certificate
    10.10(i)    Amendment to Loan and Security Agreement between the Company
                and Silicon Valley Bank, dated June 10, 1998
    11.1(2)     Statement of Computation of Earnings (Loss) Per Share
    27.1        Financial Data Schedule
    
    (1)  Filed as an exhibit to the Company's Registration Statement on
         Form S-1, File No. 333-38755, declared effective on April 29, 1998,
         incorporated herein by reference.
    (2)  See Note 4 to Condensed Consolidated Financial Statements.
     
     (b)  REPORTS ON FORM 8-K

          No reports on Form 8-K were filed during the quarter ended June 30,
          1998.


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<PAGE>

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

Date:  August 10, 1998             FVC.COM, INC.



                              By:  /s/ James O. Mitchell
                                 ----------------------------
                                 James O. Mitchell
                                 Chief Financial Officer
                                 (Duly Authorized Officer and Principal
                                 Financial and Accounting Officer)

                                       17
<PAGE>

                                 EXHIBIT INDEX
                                       
    EXHIBIT
    NUMBER      DESCRIPTION OF DOCUMENTS

    3.1(1)      Amended and Restated Certificate of Incorporation
    3.1(i)      Certificate of Ownership and Merger, effective August 3, 1998
    3.2(1)      Bylaws of the Registrant
    4.1         Specimen Common Stock Certificate
    10.10(i)    Amendment to Loan and Security Agreement between the Company
                and Silicon Valley Bank, dated June 10, 1998
    11.1(2)     Statement of Computation of Earnings (Loss) Per Share
    27.1        Financial Data Schedule


    (1)  Filed as an exhibit to the Company's Registration Statement on
         Form S-1, File No. 333-38755, declared effective on April 29,
         1998, incorporated herein by reference.
    (2)  See Note 4 to Condensed Consolidated Financial Statements.

                                       18