<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

[ ]         REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       or

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

                   For the fiscal year ended December 31, 1999

                                       or

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

              For the transition period from           to
                                              --------    --------

                         Commission File number 0-20738

                            ------------------------

                                   OLICOM A/S
             (Exact name of registrant as specified in its charter)

              N/A                                THE KINGDOM OF DENMARK
 (Translation of Registrant's               (Jurisdiction of incorporation or
      name into English)                              organization)

                            ------------------------

                                  NYBROVEJ 110
                                 DK-2800 LYNGBY
                                     DENMARK
                    (Address of principal executive offices)

                            ------------------------

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

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

                                                       NAME OF EACH EXCHANGE ON
            TITLE OF EACH CLASS                            WHICH REGISTERED
Common Shares, nominal value DKK 0.25 each              Nasdaq National Market
Common Stock Purchase Warrants                          Nasdaq National Market

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                         Common Shares, nominal value DKK 0.25 each
                         Common Stock Purchase Warrants

                            ------------------------

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:

                         Common Shares, nominal value DKK 0.25 each: 17,863,604
                         Common Stock Purchase Warrants: 922,388

Indicate by check mark whether the Registrant (1) has filed all reports 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 by check mark which financial statement item the Registrant has elected
to follow:

                         Item 17 [ ]   Item 18 [X]

<PAGE>   2



                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.


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<PAGE>   3


ITEM 1. DESCRIPTION OF BUSINESS.

         Certain statements included in this Report include trend analysis and
are forward-looking statements (within the meaning of Section 27A of the United
States Securities Act of 1933, as amended (the "Securities Act") and Section 21E
of the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act")), including, without limitation, statements containing the words
"believes", "anticipates", "expects", "plans", "may", "will", "should",
"objective", "target", "goal", "strategy" or "continue" or the negative of such
terms or other words of similar import. Such forward-looking statements relate
to future events, the future financial performance of the Company, and involve
known and unknown risks, uncertainties and other factors that 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. Prospective investors
should specifically consider the various factors identified in this Report that
could cause actual results to differ, including, without limitation, those
discussed in the following section, as well as in the section titled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". The Company is under no duty to update any such factors or to
update any of the forward-looking statements after the date of this Report to
conform such statements to actual results.

OVERVIEW

         Owing to several significant transactions undertaken by Olicom A/S
("Olicom" or the "Company") during 1999 (the "1999 Transactions"), the nature of
the Company's business has changed significantly. While this Report will
summarize the more material developments in the Company's business during the
past five years, such description must be viewed with reference to the 1999
Transactions. As a result of the 1999 Transactions and the attendant change in
the nature of the Company's business as a result thereof, the nature of the
Company's business prior to the 1999 Transactions has limited relevance.

         Prior to the 1999 Transactions, the Company developed, marketed and
supported network software and hardware products that enabled personal and
work-group computer users to communicate, exchange data and share computing
resources in local area networks ("LANs"), in wide area networks ("WANs") and
over the Internet. The Company's products were marketed worldwide, primarily
through distributors, value-added resellers (including dealers, systems
integrators and other resellers) ("VARs") and original equipment manufacturer
customers ("OEMs").

COMPANY HISTORY

         Olicom was organized in the Kingdom of Denmark in 1985, and offered its
shares publicly in the United States in 1992. Since December 1997, the Company's
shares have been listed on the Copenhagen Stock Exchange. Beginning in 1987,
Olicom was involved in the design, development and production of high-quality
networking products. In 1988, Olicom began marketing an increasingly broader
range of network interface cards ("NICs" or "adapters"), internetworking
products, hubs and cabling components, repeaters, converters, filters and
associated software drivers. The Company established Olicom, Inc. ("Olicom USA")
in 1990, with its headquarters in metropolitan Dallas, to coordinate marketing
in North and South America. In late 1991, Olicom introduced a line of Token-Ring
bridging products. In 1992, an acquisition enabled Olicom to broaden its product
line to Ethernet networks, and in 1995, Olicom began shipping 155 Mbps
Asychronous Transfer Mode ("ATM") NICs.



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<PAGE>   4


         In June 1997, with the acquisition of CrossComm Corporation
("CrossComm"), Olicom acquired a chassis-based integrated networking platform
for its Token-Ring, Ethernet and ATM solutions. In September 1997, Olicom
introduced advanced Token-Ring and ATM switching solutions, including the
CrossFire(R) 8600 Token Ring Switch.

         In November 1998, the Company announced a strategy of focusing on the
Company's core businesses. Consistent with this strategy, in January 1999,
Olicom divested its interest in Lasat A/S ("Lasat"), a producer of PC modems. In
March 1999, the Company announced a suite of Fast Ethernet switching products
designed for customers migrating from Token-Ring to Fast Ethernet.

         During the first six months of 1999, the Token-Ring market experienced
a dramatic and accelerating decline, leading to a significant reduction in
Olicom sales and severe operating losses. The Company also began experiencing
significantly increased competition in the Fast Ethernet market. On a continuing
basis during the period, Olicom reviewed its strategic and financial position,
and began investigating a broad spectrum of possibilities, including entering
into strategic alliances focused on Fast Ethernet technology and the sale of
Olicom as a whole. Such inquiries failed to generate suitable potential
relationships. As a result, the Company decided to divest its activities on a
piecemeal basis.

1999 TRANSACTIONS

         On August 31, 1999, the Company announced the sale of its Token-Ring
business to Madge Networks N.V. ("Madge"). On September 19, 1999, Intel
Corporation ("Intel") purchased certain intellectual property and other assets
of the Company and acquired Olicom's development group. Finally, on October 27,
1999, Olicom announced the sale of all of its interest in Digianswer A/S
("Digianswer") to Motorola, Inc. ("Motorola"). In late 1999, Olicom relocated
its international corporate headquarters to a smaller facility adjacent to its
previous facilities. In addition, the Company is in the process of closing down
its U.S. headquarters and other U.S. and international offices.

         Although the transactions with Intel, Madge and Motorola have
contributed to the improvement in Olicom's financial position, significant
operational losses during 1999 and substantial asset write-downs, and other
charges associated with the 1999 Transactions, resulted in a substantial
decrease in Olicom's shareholders' equity as at December 31, 1999, compared with
the same date in 1998. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations".

         Since the closing of the 1999 transactions, the Company's main focus
has been on the fulfillment of various product delivery and associated warranty
and service obligations, primarily through various agreements with Madge and
Intel, a warranty and support agreement with VITAL Network Services ("VITAL"),
and agreements and arrangements with Olicom's other business partners and
service providers.

         With the divestiture to Madge, Intel and Motorola, the Company's assets
at December 31, 1999, were comprised mainly of, cash and cash equivalents,
accounts receivables, inventories and certain intellectual property. In
addition, there will be certain other assets and contingent payments related to
the 1999 Transactions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a further discussion of the 1999
Transactions.



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<PAGE>   5

         In connection with the reduction of its operating activities and the
consummation of the 1999 Transactions, the Company will retain certain
contingent liabilities, primarily relating to the return of products from United
States distributors, product warranty and support obligations (relating to the
transaction with Madge), indemnification obligations with respect to
representations, warranties and other obligations, and non-competition covenants
relating to all of the divestitures. In addition, the Company continued to have
certain lease commitments.

         PRODUCTS

         Prior to the 1999 Transactions, the Company's strategic focus was to
address the local area networking needs of large and medium size enterprises as
they transitioned from shared, medium speed network topologies like 16 Mbps
Token-Ring and 10 Mbps Ethernet to switched, high-speed networks. The Company's
products were fully compatible with applicable industry standards and provided
connectivity to all major PC architectures and network operating systems. The
main product lines included the following:

         Desktop Network Interface Cards. NICs provide connectivity between a PC
         and the network. Olicom NICs provided support for industry standard
         speeds and features, as well as support for leading network operating
         systems developed by major vendors.

         Notebook Connectivity Products. Olicom's GoCard(R)range of PC Card
         adapters provided network connectivity for the rapidly growing portable
         computing market.

         Network System Products. Olicom's network systems products included LAN
         switches, routers, router switches and network management products.

         Network Services. Olicom network services included network monitoring,
         training, installation and on-call site maintenance. These services
         were sold by Olicom and performed by selected partners such as VITAL
         and other VARs around the world.

         With the sale of the Token-Ring business to Madge in August 1999,
Olicom divested a substantial part of its Token-Ring product lines, including:

         Token-Ring Desktop Network Interface Cards
         Token-Ring Notebook Connectivity Products
         Token-Ring Hub Products
         CrossFire Token-Ring Switch Products

         The transfer of these product lines was implemented during September,
October and November 1999. Olicom continued to support Madge with maintenance
activities with respect to the transferred products on technical support
projects that Madge escalates to Olicom, until this maintenance support
obligation terminated at the end of February 2000.

         In September 1999, Olicom announced discontinuation of the CrossFire
ATM Switch product line. To support existing partners and customers, end-of-life
sales were arranged at reduced prices at the same time. Sales of these products
effectively ceased in December 1999.


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<PAGE>   6

         In January 2000 Olicom announced discontinuation of the following
additional product lines:

         ATM Network Interface Cards and associated software products
         CrossFire Fast Ethernet Switch Products
         Fast Ethernet Hub Products
         Fast Ethernet Desktop Network Interface Cards
         Fast Ethernet Notebook Connectivity Products
         XL Router and Switch Products (former CrossComm products)

         To support existing partners and customers, an end-of-life sales
campaign began with respect to the foregoing products. The Company anticipates
that sales of these products will effectively cease by February 29, 2000.

         Beginning approximately April 2000, the Company anticipates that it
will cease to market and sell products; however, the Company expects that it
will continue to fulfil product warranty obligations and technical support
obligations for Ethernet products, ATM products and XL products. Such
obligations will be performed through agreements with VITAL Network Services.

         Olicom is no longer involved in the network service business. Customers
seeking network services (including general support, product replacement,
network monitoring, training, installation and on-site support for products sold
by Olicom) are referred to Madge, VITAL Network Services or NWorks (a
Denmark-based start-up service company established by former Olicom employees).

PRODUCT SALES AND MARKETING

         Prior to the consummation of the 1999 Transactions, Olicom marketed and
sold its products through indirect distribution channels that included
distributors, VARs and OEMs. As is common in the LAN industry, the Company's
agreements with distributors and VARs were terminable on prior notice and
provided for the right upon such termination to return products that were
unopened and undamaged.

         The Company has received notice from Ingram Micro Inc. and Tech Data
Corporation, the Company's largest distributors, of their exercise of the right
to return products. The Company has created reserves with respect to the
financial impact associated with right of distributors to return products. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".

         Olicom product sales during the first quarter of 2000 will be limited
to sales of Token-Ring products to Madge from pre-existing finished goods and
certain component inventories. In addition, end-of-life sales are ongoing for a
range of recently discontinued ATM, Ethernet and XL products. It is anticipated
that Olicom will cease to sell products sometime during fiscal year 2000. Except
for the ongoing end-of-life sales program, the Company has no active marketing
programs with respect to products formerly produced by it.

         Pursuant to rights obtained in connection with its agreement with the
Company, Madge may continue to manufacture, market and sell several
Olicom-branded Token-Ring products.


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<PAGE>   7

PRODUCT SUPPORT

         Prior to the 1999 Transactions, the Company's distribution partners
supported the Company's products. These distribution partners had access to the
Company's sales support engineers and field engineers for end-user support. The
Company's resellers and large accounts received sales and technical training
from the Company at its training centers in greater Copenhagen, Denmark,
Marlborough, Massachusetts and Richardson, Texas.

         The performance of technical support obligations retained by Olicom
after the 1999 Transactions is now being provided through VITAL and NWorks.
On-line information access is currently provided through the World Wide Web and
electronic bulletin boards as well as additional technical support available
through VITAL by telephone and telefax during extended business hours. For
Olicom products that were purchased or licensed by Madge, technical support
services are now being provided by Madge's technical support organization.

         Depending on the distribution channel, the Company's products generally
have been warranted free of defects in materials and workmanship for one to
three years. Selected NIC products have a limited lifetime warranty. Before the
expiration of the product warranty period, the Company is offering parts
replacement services through VITAL for the product lines that have remained with
the Company, and Madge is providing similar services for the product lines that
it purchased or licensed from Olicom.

         Olicom currently refers customers requesting maintenance and support
contracts that include on-site service and 24-hour telephone dial-in support to
Madge, VITAL or NWorks. To date, the Company has not encountered any significant
product maintenance problems.

RESEARCH AND DEVELOPMENT

         Prior to the 1999 Transactions, the Company was developing new products
and enhancements to existing products, with the goal of further improving
performance, assuring continued interoperability and increasing market share. In
this connection, the Company maintained significant research and development
operations in greater Copenhagen and in Gdansk, Poland.

         In connection with the agreement with Intel, Olicom's development group
was transferred to Intel, and approximately 220 Olicom development employees
based in greater Copenhagen and in Gdansk became employees of Intel. After
consummation of the transaction with Intel, and the subsequent sale of Olicom's
shareholding in Digianswer, all Olicom research and development activities were
terminated.

         As part of the agreement with Intel, Olicom has access to former Olicom
engineering resources, both in Copenhagen and in Gdansk, who are now employed by
Intel, in order to handle warranty obligations for Olicom's installed base of
Ethernet, ATM and XL products.

MANUFACTURING AND DISTRIBUTION

         Prior to the 1999 Transactions, Olicom outsourced all of its
manufacturing needs. Its products were manufactured in fully automated,
high-quality ISO 9002 certified production lines utilizing Surface Mount
Technology techniques, and were manufactured to meet Olicom specifications on a
turnkey basis.

         In connection with the sale of the Token-Ring business to Madge, the
Company continued to maintain its contract manufacturing base to support
remaining products, and facilitated the availability of a continued supply of
Token-Ring products to Madge. Following a transition period that extended from



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<PAGE>   8

August until November 1999, Madge assumed direct responsibility for the contract
manufacturers for the product line purchased/licensed from the Company.

         The Company's distribution of products has been consolidated to its
Copenhagen distribution center. The Company's distribution center in Richardson,
Texas, was closed in December 1999, in line with the overall reduction in
activities.

INTELLECTUAL PROPERTY

         The Company has been dependent on its proprietary technology since its
inception. The Company relied upon a combination of copyright and trade secret
laws to establish and maintain proprietary rights to its products.

         The Company has had a program to file applications for and obtain
patents in the United States. During 1999, most of these patent applications
were licensed or transferred to Madge or Intel. In most cases where patent
applications were transferred, Olicom at the same time received a license of the
right to utilize the technology represented by the transferred patent
applications.

         While the Company has not been issued any patents to date, several
original Olicom patent applications are currently pending. There can be no
assurance that patents will be issued from pending applications, or that claims
allowed on any future patents will be sufficiently broad to protect the
Company's technology. In addition, to the extent that patents are issued from
pending applications, there can be no assurance that any of such patents will
not be challenged, invalidated or circumvented, or that any rights granted
thereunder will provide competitive advantages to the Company. Although the
Company believes that its products and technology have not and do not infringe
the proprietary rights of others, and the Company does not have any knowledge
that its products infringe the proprietary rights of any third parties, there
can be no assurance that third parties will not assert infringement claims in
the future or that such claims will not be successful, notwithstanding the
divestitures in connection with the 1999 Transactions.

         It has been the Company's practice to enter into confidentiality
agreements with its customers, suppliers and industry partners, to limit access
to sensitive information. Despite these precautions, it may be technologically
possible for past competitors of the Company to "reverse engineer" or otherwise
obtain information regarding aspects of the Company's products that the Company
regards as proprietary. The laws of some foreign countries in which the Company
sells or may sell its products do not protect the Company's proprietary rights
in its products to the same extent, as do the laws of the Kingdom of Denmark
and/or the United States.

         From time to time the Company has received communications from third
parties asserting that its use of trademarks, or that its products, infringe or
may infringe the rights of third parties. There can be no assurance that any
such claims will not result in protracted and costly litigation; however, based
upon general practice in the industry, the Company believes that such matters
can ordinarily be resolved without any material adverse impact on its business,
financial condition or results of operations. Nevertheless, there can be no
assurance that the necessary licenses would be available on acceptable terms, if
at all, or that the Company would prevail in any such challenge. The inability
to obtain certain licenses or other rights or to obtain such licenses or rights
on favorable terms, or litigation arising out of such other parties' assertion,
could have a material adverse effect on the business, financial condition or
results of operations of the Company, notwithstanding the divestitures in
connection with the 1999 Transactions.



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<PAGE>   9

TRADEMARK AGREEMENT

         The trademark "Olicom" (the "Trademark") is a registered trademark of
Ing. C. Olivetti & C., S.p.A. ("Olivetti"). Pursuant to a Trademark Agreement
dated December 11, 1998, Olivetti extended the grant to the Company of a
worldwide license to use the Trademark. The term of the Trademark Agreement
expires on September 1, 2009, with the Company having the right to extend the
term for an additional ten years. During the term of the Trademark Agreement and
for a period of one year after any termination thereof, Olivetti has agreed not
to use itself or grant to a third party any rights to use the Trademark on
products or services of the type manufactured, marketed or offered by the
Company. Olicom has the right to terminate the Trademark Agreement for
convenience upon the provision of notice, as provided therein.

         In connection with the transactions with Madge, Olivetti, Madge and
Olicom agreed to the licensing of the Trademark on terms substantially similar
to those enjoyed by Olicom under the Trademark Agreement, in order to enable
Madge to market Olicom product lines.

         Olicom has trademarks on several selected products, such as
CellDriver(R), Lanscout(TM) and RapidLan(TM), and on products and services such
as CrossFire(R), GoCard(R), RapidFire(R), ClearServer(R), ClearSession(R),
ClearSight(TM), ClearCare(R), ClearPartner(R), ClearStep(R) and ExpertWatch(R).
Several of these trademarks were licensed to Madge in connection with the 1999
Transactions.

EMPLOYEES

         In connection with the Company's restructuring efforts and the 1999
Transactions, Olicom has reduced staff dramatically.

         As of February 1, 2000, the Company employed or retained (as employees
or independent contractors) approximately 59 persons, including 6 in sales and
marketing, 28 in operations/production (including quality assurance), and 25 in
administration and finance. Of these employees and independent contractors,
approximately 9 were located in the United States, and the remainder were
located in Denmark.

         As of May 1, 2000, the Company anticipates that it will cease to have
personnel in sales and marketing or operations. At such time, the Company will
have limited personnel, primarily in finance and other administrative functions.


ITEM 2. DESCRIPTION OF PROPERTY.

OLICOM A/S LEASES

         Pursuant to the sublease agreement entered into with Intel Denmark ApS
("Intel Denmark"), Olicom has subleased the premises situated at Nybrovej 112,
DK-2800 Lyngby (the "TopDanmark Lease No. 1") to Intel Denmark and the premises
situated at Nybrovej 114, DK-2800 Lyngby (the "TopDanmark Lease No. 2") to Intel
Denmark on the same terms and conditions as agreed in the head leases. The
sublease agreement is for a fixed term terminating on February 1, 2006, for the
TopDanmark Lease No. 1 and on April 1, 2008, for the sublet part of the
TopDanmark Lease No. 2. During these periods, Olicom will remain contingently
liable to TopDanmark Ejendom A/S ("TopDanmark"), as lessor of the premises, for
the performance of lease obligations by its subtenants. While Olicom A/S
provided bank guarantees



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<PAGE>   10

and deposits to TopDanmark as security under the head leases, Intel Corporation
has provided Olicom with a parent company guarantee covering Intel Denmark'
fulfillment of its obligations under the subleases.

         In addition, Intel Denmark is obligated to use reasonable commercial
efforts together with Olicom to procure the assignment of the head leases to
Intel Denmark with the necessary consent of TopDanmark. In this relation, Intel
Denmark is obligated to provide security to TopDanmark sufficient for the
release of the bank guarantees and deposits presently provided as security by
Olicom to TopDanmark.

         Further, Olicom had leased premises situated at Nybrovej 110, DK-2800
Lyngby from Tryg Baltica Forsikring, Pensionsforsikringsselskab A/S. This lease
was transferred from Olicom to Eli Lilly Danmark A/S ("Eli Lilly Danmark") as of
January 1, 2000, and has been accepted by the lessor of the premises. As part of
this transfer, Olicom made a payment to Eli Lilly Danmark for refurbishment of
the leased premises. Further, Olicom has entered into a sublease agreement with
Eli Lilly Danmark, whereby Olicom will sublease 1,046 square meters of the
premises situated at Nybrovej 110, DK-2800 Lyngby. The sublease is
non-terminable until December 31, 2002; however, Olicom may assign this lease or
enter into a further sublease. The sublease with Eli Lilly Danmark may terminate
with at least a 12 months' written notice.

OLICOM USA LEASES

         Pursuant to a Lease Agreement dated October 16, 1997, Olicom USA leased
approximately 40,000 square feet of office space in Richardson, Texas, for a
term expiring on January 30, 2005. Effective November 29, 1999, Olicom USA
assigned its obligations under the Lease Agreement to Nextel of Texas, Inc.
("Nextel Texas"). The parent corporation of Nextel Texas guaranteed its assumed
obligations under the Lease Agreement. Pursuant to such assignment, the landlord
granted Olicom USA a release from substantially all of its obligations under the
Lease Agreement (including the obligation to pay rental). So long as Nextel
Texas is not in default in its obligations under the Lease Agreement, the
landlord has agreed to pay to Olicom USA an aggregate amount of $291,183 in 44
monthly installments, which represents a portion of the increased rental
obtained as a result of the assignment of the Lease Agreement to Nextel Texas.
In connection with the assignment of the Lease Agreement, Nextel Texas also
assumed substantially all of the obligations of Olicom USA regarding the lease
of telephone equipment at the leased premises. However, as the parent of Nextel
Texas did not guarantee the obligations of Nextel Texas under the telephone
lease, the lessor of the telephone equipment did not release Olicom USA from its
obligations under such lease; as a result, Olicom USA agreed to guarantee the
performance of the assumed obligations of Nextel Texas under the telephone
lease. The guaranteed payments are approximately $7,200 per month for a period
of 47 months as of February, 2000 (or a maximum amount of approximately $338,400
as of such date).

         Olicom USA also leases warehouse space in Plano, Texas, for a term
expiring on April 14, 2000. Olicom USA will utilize portions of this space to
handle returned products, and has moved its administrative offices into the
office portion of the warehouse. Owing to the April 2000 expiration date of the
term of such lease, Olicom USA is not endeavoring to sublet these premises at
this time.

         Olicom USA also leases space in Marlborough, Massachusetts, for a term
expiring December 31, 2002. Of the space originally leased by the former
CrossComm, portions have been previously sublet. As part of the sale of the
services business to VITAL Network Services, it agreed to split the cost of any



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<PAGE>   11

unoccupied space. As a result, Olicom USA's estimated share of rental and
operating expense attributable to this premises through 2002 is $476,637. While
Olicom USA is presently trying to sublet the remaining space, it is not
optimistic that it will be successful in doing so.

OLICOM POLAND LEASE

         Pursuant to a Lease Agreement dated December 22, 1997, Olicom Poland
sp. z o.o. ("Olicom Poland") leased office space in Gdansk for a term expiring
on November 28, 2008. Commencing October 25, 1999, these premises were sublet to
Intel Technology Poland on back-to-back terms until the day when all rights and
obligations of Olicom Poland can be assigned to Intel Technology Poland.

         If the lease is not assigned to Intel Technology Poland, Olicom
Poland's liability vis-a-vis the landlord will not expire until November 28,
2008. This liability is covered by guarantees provided by Intel Corporation.


ITEM 3. LEGAL PROCEEDINGS

         From time to time, the Company is involved in litigation relating to
claims arising out of its operations in the normal course of business. As of the
date of this Report, the Company was not a party to any legal proceedings, the
adverse outcome of which, in management's opinion, would have a material adverse
effect on the Company's business, results of operations or financial position.
See also "Description of Business -- Proprietary Rights."

         On or about September 13, 1996, Datapoint Corporation ("Datapoint")
commenced litigation in the United States District Court for the Eastern
District of New York against CrossComm Corporation (now known as Olicom, Inc.
("CrossComm")), Cisco, Plaintree Systems Corporation, Accton Technology
Corporation, Cabletron Systems, Inc., Bay Networks and Asante Technologies,
Inc., individually, and as representatives of a putative class of all
manufacturers, vendors and users of Fast Ethernet dual protocol local area
network products. In its complaint, Datapoint alleges that the defendants have
been, and still are, directly infringing U.S. Patent No. 5,077,732 by making,
using, selling and/or offering for sale products embodying inventions claimed in
that patent. Similarly, Datapoint alleges that the defendants are also
infringing U.S. Patent No. 5,008,879 by using or selling products encompassed
within that patent's claims. Datapoint is seeking a permanent injunction against
all of the defendants, enjoining each of them from making, using or selling any
product that infringes either patent, and is also seeking unspecified damages
(which it claims should be trebled) and its costs and attorneys' fees. On April
15, 1998, the Special Master submitted a report in which he generally supported
the contention of the defendants as to their construction of the claims with
respect to the patents-in-suit. A Stipulated Order and Judgment was filed by the
parties, and subsequent thereto, the Court granted Summary Judgment in favor of
the defendants, finding that the accused products do not infringe the
patents-in-suit. On February 3, 1999, Datapoint filed a notice of appeal to the
United States District Court for the Federal Circuit. On January 6, 2000,
Datapoint filed a motion seeking a stay of the appeal, on the grounds that one
of the two claims that is the subject of the appeal had been rejected by the
United States Patent and Trademark Office during a reexamination.


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<PAGE>   12

ITEM 4. CONTROL OF REGISTRANT.

         As of February 24, 2000, the Company was not aware of any person who
was the beneficial owner of more than 10% of the outstanding shares of the
Company, nominal value DKK 0.25 per share ("Common Shares"). The following table
sets forth as of such date the number of Common Shares beneficially owned by all
directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
                                             Amount of        Percent
                                            Beneficial           of
                                             Ownership        Class(1)
                                             ---------        --------
<S>                                        <C>               <C>
All directors and executive officers
   as a group (consisting of 8 persons)       250,898           1.4%
</TABLE>


----------------

         (1)  Percentages in the foregoing table are based on 17,863,604 Common
              Shares issued and outstanding as of February 24, 2000, excluding
              702,291 Common Shares held in the Company's treasury.


ITEM 5. NATURE OF TRADING MARKET.

         The Common Shares are traded on the Nasdaq National Market (under the
symbol OLCMF) and on the Copenhagen Stock Exchange ("CSE"). The following table
sets forth the high and low sales prices of the Common Shares for the periods
indicated, as reported by the Nasdaq National Market ("Nasdaq") and the
Copenhagen Stock Exchange.

<TABLE>
<CAPTION>
                                                         Nasdaq(1)                        CSE(1)
                                                   --------------------              ----------------
                                                   High             Low              High         Low
                                                   ----             ---              ----         ---
<S>                                                <C>             <C>              <C>          <C>
Calendar 2000
   First Quarter (through February 24, 2000)        1.3             0.8               9.5         5.9
Calendar 1999
   First Quarter                                    7.9             2.9              52.4        21.3
   Second Quarter                                   4.5             3.1              29.6        19.8
   Third Quarter                                    4.4             0.6              29.2         5.8
   Fourth Quarter                                   1.7             0.5               9.4         3.9
Calendar 1998
   First Quarter                                   30.8            24.8             214.0       177.0
   Second Quarter                                  30.8            26.5             210.0       186.0
   Third Quarter                                   28.4            13.7             197.0        82.4
   Fourth Quarter                                  14.5             4.9              87.1        32.5
</TABLE>

----------------

     (1)  Prices reported for Nasdaq are expressed in U.S. dollars; prices
          reported for the CSE are expressed in Danish kroner.


                                       12
<PAGE>   13

         As of February 24, 2000, there were approximately 132 United States
record holders of Common Shares, who held approximately 83% of the outstanding
Common Shares as of such date. The foregoing includes 14,826,060 Common Shares
held of record by Depository Trust Company, as nominee for various beneficial
holders.

         On January 31, 2000, the Company announced that it had received
notification from Nasdaq relating to the failure of the Common Shares to
maintain a minimum bid price of $1.00 during a 30 consecutive trading day
period, as required for continued listing of the shares on Nasdaq. The Company
also announced that it had received notification from Nasdaq relating to the
failure to maintain a minimum of two active market makers for the Company's
common share purchase warrants, as required for continued listing of the
warrants on Nasdaq. The Company appealed Nasdaq's determinations of
noncompliance, and a hearing has been scheduled for February 24, 2000, with
respect to the appeal. As of the close of business on February 25, 2000, the
Company had not been advised of the outcome of the hearing.

         In connection with the Company's acquisition of CrossComm on June 12,
1997, the Company issued three-year warrants ("Warrants") to purchase Common
Shares at an exercise price of $19.74 per whole Common Share. The Warrants are
traded only on the Nasdaq National Market (under the symbol OLCWF). The
following table sets forth the high and low sales prices of the Warrants for the
periods indicated, as reported by Nasdaq.

<TABLE>
<CAPTION>
                                                                              Nasdaq
                                                                     -------------------------
                                                                      High                Low
                                                                     ------              -----
<S>                                                                  <C>                 <C>
Calendar 2000
   First Quarter (through February 24, 2000)                           0.2                0.1
Calender 1999
   First Quarter                                                       0.7                0.3
   Second Quarter                                                      0.4                0.1
   Third Quarter                                                       0.4                0.1
   Fourth Quarter                                                      0.2                0.0
Calendar 1998
   First Quarter                                                      12.8                8.1
   Second Quarter                                                     12.0                7.3
   Third Quarter                                                       9.0                1.0
   Fourth Quarter                                                      1.5                0.1
</TABLE>


----------------


         As of February 24, 2000, there were approximately 88 United States
record holders of Warrants, who held approximately 99% of the Warrants as of
such date. The foregoing includes 918,975 Warrants held by Depository Trust
Company.


ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS.

         There are no governmental laws, decrees or regulations of the Kingdom
of Denmark that restrict the export or import of capital (including, without
limitation, foreign exchange controls), or that affect the


                                       13
<PAGE>   14

remittance of dividends, interest or other payments to nonresident holders of
Common Shares. There are no limitations imposed by the laws of the Kingdom of
Denmark or the Company's Articles of Association (except for the Share Ownership
Limit described below) on the right of nonresident or foreign holders to hold or
vote Common Shares.

         The Articles of Association provide that no person, firm or entity
(each, a "person") may, without obtaining the approval of the Company's Board of
Directors, own more than 33% of the Company's share capital or votes at any time
(the "Share Ownership Limit"). The Company's Board of Directors may condition
its approval on the satisfaction of such conditions that it determines to be
appropriate. For the purpose of determining ownership of Common Shares or votes,
a person will generally be deemed to own Common Shares or votes which are
considered to be beneficially owned by such person under Rule 13d-3 under the
Exchange Act. A person who owns more than 33% of the Company's share capital or
votes at any time who has not obtained the approval of the Board of Directors
cannot be registered or otherwise accepted as a shareholder, and such person
will have no voting rights, rights to dividends or distributions, or any other
rights as a shareholder for the portion of such person's shareholding that
exceeds 33%. The Board of Directors may approve the ownership by a person of
more than 33% of the Company's share capital or votes in (i) the event that such
person has, prior to purchasing more than 33% of the Company's share capital or
votes, requested the approval by the Board of Directors to own more than the
Share Ownership Limit, (ii) the event that such person has made a legally
binding and irrevocable bona fide offer to all shareholders of the Company
(other than such person, to the extent that he or she is a shareholder) to
purchase all the Common Shares and votes in the Company at a price deemed
favorable by the Board of Directors, in its discretion, or (iii) in such other
circumstances, as determined by the Company's Board of Directors.

         Other than the foregoing, there are no limitations by the Company's
Articles of Association on the right of holders to hold or vote Common Shares.


ITEM 7. TAXATION.

         The following summary of certain United States federal and Danish tax
matters is based on tax laws of the United States and Denmark as in effect on
the date of this Report, and is subject to changes in United States and Danish
law, including changes that could have retroactive effect. The following summary
is also based on the current United States-Denmark Double Taxation Convention
which is subject to change. A proposal for a new treaty has been concluded
between USA and Denmark. The treaty must be ratified by the two states before it
can take effect. In Denmark the Gouverment proposed a Bill on the new treaty on
3 November 1999 but the Bill has not yet been passed by the Parliament. This
discussion is based on current laws unless otherwise stated and interpretations
thereof, and there can be no assurance that future legislation, regulations,
administrative rulings or court decisions will not adversely affect the accuracy
of the statements contained herein.

         The following summary does not consider or discuss the tax laws of any
country other than the United States or Denmark. This summary does not describe
United States federal estate and gift tax considerations, nor state, local or
provincial tax considerations. Furthermore, this summary does not address United
States federal income tax or Danish tax considerations relevant to United States
holders of Common Shares or Warrants subject to taxing jurisdictions other than
or in addition to the United States, and does not address all possible
categories of United States holders, some of whom (such as financial


                                       14
<PAGE>   15

institutions, trusts, estates, insurance companies, dealers in securities,
certain retirement plans and tax exempt organizations) may be subject to special
rules.

         This summary contains a description of the material United States
federal income tax and Danish tax consequences of the purchase, ownership and
disposition of Common Shares and Warrants by a beneficial owner that (i) is an
individual citizen or resident in the United States (for United States federal
income tax purposes), a corporation or partnership organized under the laws of
the United States or any state thereof, or estates or trusts the income of which
is subject to United States federal income tax regardless of its source, (ii) is
not also a resident or corporation of Denmark and is not domiciled in Denmark,
(iii) does not hold Common Shares or Warrants in connection with any permanent
establishment or fixed base in Denmark, (iv) does not own, and has not owned
(directly, indirectly or by attribution) at any time, 10% or more of the total
combined voting power or equity of the Company, and (v) holds Common Shares or
Warrants as capital assets. The term "United States holder," as used in this
summary, means a beneficial owner of Common Shares or Warrants meeting these
requirements. UNITED STATES HOLDERS OF COMMON SHARES OR WARRANTS SHOULD CONSULT
THEIR OWN TAX ADVISORS AS TO THE UNITED STATES, DANISH OR OTHER TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF COMMON SHARES AND WARRANTS.

UNITED STATES TAX CONSEQUENCES OF OWNERSHIP OF COMMON SHARES

         Dividends. For United States federal income tax purposes, the gross
amount of all dividends (that is, the amount before reduction for Danish
withholding tax) paid with respect to Common Shares out of the current or
accumulated earnings and profits of Olicom ("E&P") to a United States holder
will be subject to United States federal income taxation as foreign source
dividend income. United States corporations that hold Common Shares will not be
entitled to the dividends received deduction available for dividends received
from United States corporations. To the extent that a distribution exceeds E&P,
it will be treated first as a return of capital to the extent of the United
States holder's basis, and then, as gain from the sale of a capital asset.

         For United States federal income tax purposes, the amount of any
dividend paid in Danish kroner will be the United States dollar value of the
kroner at the exchange rate in effect on the date of receipt, whether or not the
kroner is converted into United States dollars at that time.

         The withholding tax imposed by Denmark generally is a creditable
foreign tax for United States federal income tax purposes. Therefore, a United
States holder generally will be entitled to include the amount withheld as
foreign tax paid in computing a foreign tax credit (or in computing a deduction
for foreign income taxes paid, if the United States holder does not elect to use
the foreign tax credit provisions of the Internal Revenue Code of 1986, as
amended (the "Code")). The Code, however, imposes a number of limitations on the
use of foreign tax credits, based on the particular facts and circumstances of
each taxpayer. United States holders who hold Common Shares should consult their
tax advisors regarding the availability of the foreign tax credit.

         A United States holder also may be subject to backup withholding at the
rate of 31% with respect to dividends paid on or proceeds from the sale or other
disposition of Common Shares, unless the United States holder (i) is a
corporation or comes within certain other exempt categories or (ii) provides a


                                       15
<PAGE>   16


taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules.

         Sale or Other Disposition of Common Shares. Gain or loss recognized by
a United States holder on the sale or other disposition of Common Shares will be
subject to United States federal income taxation as capital gain or loss in an
amount equal to the difference between such United States holder's basis in the
Common Shares and the amount realized upon such disposition. The capital gain or
loss will be long term or short term depending on whether the holder has held
the Common Shares for (i) more than 12 months (which is subject to a maximum
United States federal income tax rate of 20% for certain non-corporate
taxpayers) or (ii) not more than one year (which is subject to a maximum United
States federal income tax rate of 39.6% for certain non-corporate taxpayers).
Capital losses are generally deductible only against capital gains and not
against ordinary income.

         Capital gain recognized by a United States holder on the sale or other
disposition of Common Shares will be United States source gain. Treasury
Regulations have been finalized under which losses from the sale of Common
Shares would generally be sourced in the same manner as gains from the sale of
such Common Shares. However, the final regulations include a dividend recapture
rule and other exceptions that may apply. United States holders of Common Shares
should consult their tax advisors regarding the proper treatment of such losses.

UNITED STATES TAX CONSEQUENCES OF OWNERSHIP OF WARRANTS

         Exercise of Warrants. Generally, no gain or loss will be recognized for
United States federal income tax purposes upon exercise of a Warrant. A holder's
initial tax basis in a Warrant will be equal to the value of the Warrant at the
time the holder receives such Warrant. The tax basis of the Common Shares
acquired upon exercise of a Warrant will be equal to the sum of (i) the holder's
tax basis in such Warrant and (ii) the exercise price. The holding period of the
Common Shares acquired upon exercise of a Warrant will begin on the date of the
exercise of the Warrant.

         Disposition of Warrants. In general, the sale, exchange or other
taxable disposition of a Warrant will result in gain or loss to the holder in an
amount equal to the difference between the amount realized on such sale,
exchange or other disposition and the holder's tax basis in the Warrant. Such
gain or loss generally will be capital gain or loss (so long as the Warrant is a
capital asset in the hands of the holder) and such capital gain or loss will be
long term or short term depending on whether the holder has held the Warrant for
(i) more than 12 months (which is subject to a maximum United States federal
income tax rate of 20% for certain non-corporate taxpayers) or (ii) not more
than one year (which is subject to a maximum United States federal income tax
rate of 39.6% for certain non-corporate taxpayers).

         Expiration. The expiration of a Warrant should generally result in a
capital loss to the holder equal to the holder's tax basis in the Warrant if the
Common Shares issuable upon exercise of the Warrant would have been a capital
asset if acquired by such holder.

         Adjustments to Conversion Ratio. Adjustments made to the number of
Common Shares that may be acquired upon the exercise of a Warrant, or the
failure to make such adjustments, may result in a taxable distribution to the
holder of a Warrant pursuant to Section 305 of the Code.



                                       16
<PAGE>   17


DANISH TAX CONSEQUENCES OF OWNERSHIP OF COMMON SHARES

         Dividends. For Danish income tax purposes, the gross amount of all
distributions made by the Company to its shareholders is taxed as a dividend.
However distributions liquidation proceeds made by the Company to its
shareholders during the calender year in which the Company is finally liquidated
and dissolved are taxed as capital gain. In addition, the gross amount paid by
the Company to redeem Common Shares owned by a shareholder and considerations
paid at purchase of own shares are generally taxed as a dividend. However, a
shareholder may apply to Danish tax authorities for an exemption from the
dividend tax. If the exemption request is granted, the consideration will be
taxed as capital gain. The granting of bonus shares to shareholders, and the
right of shareholders to subscribe for Common Shares at a price that is less
than the current trading value of such Common Shares, are not considered taxable
distributions to shareholders.

         In general, a Danish withholding tax of 25% is levied on all dividends.
However, a United States holder may apply to the Danish tax authorities for a
partial refund of the dividends tax that has been withheld under tax treaty. If
this refund request is granted, the Danish withholding tax on such dividends is
effectively reduced to 15%. Note that under the new treaty the rate is reduced
to 5% for corporate shareholders holding at least 10% of the share capital as
oppose to 90% to the voting power in the current treaty. Further, corporate
shareholders holding at least 25% of the share capital for a consecutive period
of a least one year may be exempt from Danish tax on dividends. The Company does
not presently contemplate the payment of any dividends on Common Shares.
However, should the Company decide to make payment of dividend, the Company will
apply to the Danish tax authorities for a blanket exemption allowing the Company
to withhold only 15% of all gross dividends paid to a United States holder.
While the Company believes that such an exemption will be granted, there can be
no assurance that this will occur. Shareholders eligible for further reduction
must apply individually for such reduction.

         Sale or Other Disposition of Common Shares. Capital gains realized by
United States holders upon the sale or other disposition of Common Shares should
be exempt from Danish taxation.

DANISH TAX CONSEQUENCES OF OWNERSHIP OF WARRANTS

         Exercise of Warrants. Generally, a United States holder should not
recognize taxable gain or loss for Danish income tax purposes upon the exercise
of a Warrant.

         Sale of Warrants. Generally, a United States holder should not
recognize taxable gain or loss for Danish income tax purposes upon the sale of a
Warrant. However if the warrant is disposed of to the Company any (deemed)
consideration will be taxed as dividend, cf. above, unless a ruling allowing for
capital gains treatment has been obtained.

         Expiration. Upon the expiration of a Warrant, a United States holder
should not recognize taxable gain or loss for Danish income tax purposes.

DANISH SHARE TRANSFER DUTY

         No Danish share transfer duty is levied on the disposal of Common
Shares or Warrants.



                                       17
<PAGE>   18

DANISH ESTATE AND GIFT TAXES.

         Generally, if a United States holder acquires or disposes of Common
Shares or Warrants by inheritance, legacy or gift, such holder will not be
subject to Danish gift or inheritance taxes. If a United States holder should
make a gift of such Common Shares or Warrants to a close relative resident in
Denmark other than a spouse, the United States holder could be liable for Danish
gift tax; however the tax is subject to relief under the United States-Denmark
Double Taxation Convention with respect to taxes on estates, inheritance and
gifts.


ITEM 8. SELECTED FINANCIAL DATA.

         The following table sets forth certain financial information with
respect to the Company for the five years ended December 31, 1999. This
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
Consolidated Financial Statements and related notes included elsewhere herein.

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                              -----------------------------------------------------------------
                                                 1995          1996         1997          1998          1999
                                              ----------    ----------   ----------    ----------    ----------
                                                                       (IN THOUSANDS,
                                                                  EXCEPT PER SHARE AMOUNTS)
<S>                                           <C>           <C>          <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
   Net sales                                  $  127,469    $  168,228   $  238,229    $  227,602    $   71,291
   Cost of sales                                  65,191        95,236      123,195       134,990        60,874
   Special charges related to inventories              0             0            0         3,463        33,737
                                              ----------    ----------   ----------    ----------    ----------
   Gross profit                                   62,278        72,992      115,034        89,149       (23,320)
                                              ----------    ----------   ----------    ----------    ----------
OPERATING EXPENSES:
   Sales and marketing                            31,660        40,496       53,754        71,300        42,216
   Research and development                        9,193        12,852       17,748        23,174        14,298
   General and administrative                      5,662         6,848       11,032        13,657        11,218
   Acquisition-related expenses                        0         3,787       40,917             0             0
   Restructuring charges                               0         1,402            0         7,327        36,695
                                              ----------    ----------   ----------    ----------    ----------
       Total operating expenses                   46,515        65,385      123,451       115,458       104,427
                                              ----------    ----------   ----------    ----------    ----------
INCOME (LOSS) FROM OPERATIONS
  BEFORE INTEREST AND INCOME TAXES                15,763         7,607       (8,417)      (26,309)     (127,747)
   Income from sale of activities                      0             0            0             0        51,205
   Interest income, net                            3,297         1,531        2,966         2,302           829
   Foreign currency gains (losses)                   (31)          675       (1,736)          481           722
   Related party gain on sale of investment            0         2,878            0             0             0
                                              ----------    ----------   ----------    ----------    ----------
INCOME (LOSS) BEFORE INCOME TAXES                 19,029        12,691       (7,187)      (23,526)      (74,991)
   Provision for income taxes                      6,223         4,727       10,689          (531)        4,656
                                              ----------    ----------   ----------    ----------    ----------
INCOME (LOSS) BEFORE MINORITY INTEREST IN
  INCOME OF CONSOLIDATED SUBSIDIARY               12,806         7,964      (17,876)      (22,995)      (79,647)
   Minority interest in income of
       consolidated subsidiary                         0           539          245           (56)          660
                                              ----------    ----------   ----------    ----------    ----------
NET INCOME (LOSS)$                                12,806    $    7,425   $  (18,121)   $  (22,939)   $  (80,307)
                                              ==========    ==========   ==========    ==========    ==========

DILUTED EARNINGS (LOSS) PER SHARE             $     0.87    $     0.50   $    (1.15)   $    (1.28)   $    (4.50)
                                              ==========    ==========   ==========    ==========    ==========

WEIGHTED AVERAGE SHARES OUTSTANDING
    INCLUDING COMMON STOCK EQUIVALENTS
    IN 1997, 1998 AND 1999                        14,748        14,786       15,821        17,894        17,864
                                              ==========    ==========   ==========    ==========    ==========
</TABLE>



                                       18
<PAGE>   19


<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                --------------------------------------------------------------
                                                   1995         1996         1997         1998         1999
                                                ----------   ----------   ----------   ----------   ----------
                                                                        (IN THOUSANDS)
<S>                                             <C>          <C>          <C>          <C>          <C>
BALANCE SHEET DATA:
   Working capital                              $   78,600   $   86,407   $  100,552   $   76,249   $   22,265
   Total assets                                    127,327      127,924      162,331      149,013       48,468
   Total shareholders' equity                       90,127       97,509      125,559      103,023       22,438
</TABLE>


                                       19
<PAGE>   20


ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

         Certain statements included in this Report include trend analysis and
are forward-looking statements (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act), including, without
limitation, statements containing the words "believes", "anticipates",
"expects", "plans", "may", "will", "should", "objective", "target", "goal",
"strategy" or "continue" or the negative of such terms or other words of similar
import. Such forward-looking statements relate to future events, the future
financial performance of the Company, and involve known and unknown risks,
uncertainties and other factors that 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. Prospective investors should specifically
consider the various factors identified in this Report that could cause actual
results to differ, including, without limitation, those discussed in the
following section, as well as in the section titled "Description of Business".
The Company is under no duty to update any such factors or to update any of the
forward-looking statements after the date of this Report to conform such
statements to actual results. The following discussion should be read in
conjunction with the Consolidated Financial Statements and related notes.

OVERVIEW

         The Company's wholly-owned subsidiaries include Olicom Ventures A/S
("Olicom Ventures"), Olicom Finance Limited and Olicom Trading A/S. Olicom, Inc.
is a wholly-owned subsidiary of Olicom Trading A/S.

         During the first six months of 1999, the Token-Ring market experienced
a dramatic and accelerating decline, leading to a significant reduction in
Olicom's sales and severe operating losses. The Company also began experiencing
significantly increased competition in the Fast Ethernet market. On a continuing
basis during the period, Olicom reviewed its strategic and financial position,
and began investigating a broad spectrum of possibilities, including entering
into strategic alliances focused on Fast Ethernet technology and the sale of
Olicom as a whole. Such inquiries failed to generate suitable potential
relationships. As a result, the Company decided to divest its activities on a
piecemeal basis (see "Description of Business").

         As a result of the 1999 Transactions, the nature of the Company's
business changed significantly during 1999. This discussion will summarize the
1999 Transactions (see "The 1999 Transactions"). The 1999 Transactions
significantly affected the Company's financial condition and results of
operations at and for the fiscal year ended December 31, 1999, as described more
fully below. As a result of these significant changes in the nature of the
Company's business, the following discussion will include summary references to
the Company's results of operations, liquidity and financial condition during
the period prior to the 1999 Transactions, and describe the effect of the 1999
Transactions on the Company's results of operations, liquidity and financial
condition.

         The Company's functional currency is the U.S. dollar. The Company
prepares its financial statements in U.S. dollars and in accordance with
accounting principles generally accepted in the United States ("U.S. GAAP").
References herein to "U.S. dollars", "$" or "USD" are references to United
States currency, and references to "Danish kroner", "kroner" or "DKK" are
references to Danish currency.


                                       20
<PAGE>   21

1999 TRANSACTIONS

         On August 31, 1999, the Company closed the sale of its Token-Ring
business to Madge. The consideration for the sale of Olicom's Token-Ring
business to Madge consisted of a cash payment of $15 million, of which a certain
amount was paid into escrow subject to Olicom fulfilling certain development and
other technical support commitments, and obligations with respect to
documentation and training, and additional cash payments due over the succeeding
three years based on Madge's revenue derived from the combined Madge and Olicom
Token-Ring product portfolio during this period. With respect to the additional
cash payments, a certain minimum cash amount for the whole period is guaranteed
by a financial institution and held in escrow, and will be released in
instalments over a period of twelve quarters from the closing date. Until
February 29, 2000, Madge is entitled to withhold payments capped at a certain
amount in connection with the Company's agreement to indemnify Madge with
respect to intellectual property claims. The escrowed amounts and the potential
additional cash payments have not been taken into income in 1999. The Company
intends to record these amounts and payments as income when and to the extent
received, but only to the extent that Madge does not make claims which would
have the effect of reducing the amount of monies received. With respect to a
given quarter, Olicom will receive payments in excess of the agreed quarterly
amount if Madge's revenue from Token-Ring products in that quarter exceeds the
thresholds set for the calculation of the minimum payment; however, Madge may
reduce the next quarterly payment by an amount equal to the amount of the excess
payment, if the sale of Token-Ring products in the succeeding quarter is less
than the agreed threshold. Consequently, the Company will be able to make a
complete assessment of the total amount paid by Madge only after the end of the
twelve quarters following the closing. Olicom can make no assurance with respect
to the anticipated outcome of the sale of Token-Ring products during the
three-year period above the agreed minimum amount. In addition, Madge agreed to
purchase certain Olicom Token-Ring inventory. The obligation for Madge to
purchase inventory will expire by March 31, 2000. In addition, Olicom agreed to
provide certain warranty-related services with regard to the product lines
transferred to Madge. This agreement obligates Olicom to repair or replace
defective goods in accordance with Olicom's general commercial warranty terms
for up to one year following product purchases.

         On September 19, 1999, Olicom closed a transaction whereby Intel
Corporation ("Intel") purchased certain intellectual property and other assets
of the Company and acquired Olicom's development group. The consideration for
the Intel transaction included a cash payment, with a portion thereof being paid
into escrow as security for the performance of indemnification obligations with
respect to warranties, representations and other agreements made by the Company
to Intel. The escrowed amount will remain in escrow for twelve months following
the closing date, to the extent not applied to claims against the Company that
are subject to warranty and indemnification obligations. In addition, the
agreement with Intel contains a provision pursuant to which Olicom may receive
additional payments upon the satisfaction of certain conditions. Olicom can make
no assurance with respect to the anticipated outcome of this provision, which
will expire by September 30, 2000.

         On October 27, 1999, Olicom closed the sale of all of its interest in
Digianswer A/S ("Digianswer") to Motorola, Inc. ("Motorola"). The consideration
for the Digianswer transaction consisted of cash, with a portion thereof being
paid into escrow as security for the performance by the Company of
indemnification obligations with respect to warranties, representations and
other agreements made by the Company to Motorola. The escrowed amount will
remain in escrow for 18 months following the closing date, to the extent not
applied to claims against the Company that are subject to warranty and
indemnification


                                       21
<PAGE>   22

obligations. In connection with the agreement with Motorola, the Company
recorded both the cash payment and the escrowed amount as an income in 1999, as
management believes that the risk associated with the escrowed amount is
limited.

         In connection with the foregoing agreements, Olicom made warranties,
representations and other agreements that are customary for transactions of this
nature. Warranty claims are barred following the expiration of stated periods
(generally, 1 1/2 to 2 years) following the closing of the respective
transactions. Olicom's liability for indemnification is limited to certain
maximum amounts, in no case exceeding the cash payments received by it. In all
the transactions Olicom entered into confidentiality agreements which limit the
detail that Olicom can disclose regarding the terms of each transaction. In
connection with the reduction in its operating activities and the consummation
of the 1999 Transactions, the Company will retain certain contingent
liabilities, primarily relating to the return of products, particularly from
United States customers, product warranty and support obligations relating to
the transaction with Madge, and indemnification obligations with respect to
representations and warranties. The Company entered into non-competition
covenants relating to all of the divestitures. In addition, the Company will
retain certain lease commitments (see "Description of Property"), and remain
responsible for litigation arising out of its operations.

         Subsequent to the closing of the 1999 Transactions, the nature of the
Company's business changed, as the Company focused on (i) pushing product
through the channel (such products consisting of products on hand and products
received subsequent to such closing as a result of existing commitments to
third-party manufacturers), (ii) collection of receivables, (iii) provision of
warranty and technical support, (iv) receipt of products from distributors and
VARs who have cancelled distribution agreements, and (v) the reduction in U.S.
operations and operations in countries outside of the U.S. and Denmark.

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, certain
financial data as percentages of the Company's net sales. The Company believes
that period to period comparisons of its financial results are not meaningful
and should not be relied upon as an indicator of future performance. In
particular, the Company's 1999 results of operations were heavily influenced by
the 1999 Transactions. Consequently, comparisons between 1998 and 1999 are not
meaningful. Prior year amounts have been reclassified to conform to the current
year presentation of the financial statements.


                                       22
<PAGE>   23


<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                          ----------------------------------
                                                            1997         1998         1999
                                                          --------     --------     --------
<S>                                                      <C>          <C>          <C>
Net sales .............................................      100.0%       100.0%       100.0%
Cost of sales .........................................       51.7         59.3         85.4
Special charges related to inventories ................        0.0          1.5         47.3
                                                          --------     --------     --------
   Gross profit .......................................       48.3         39.2        (32.7)
Operating expenses:
   Sales and marketing ................................       22.6         31.3         59.2
   Research and development ...........................        7.4         10.2         20.1
   General and administrative .........................        4.6          6.0         15.7
   Restructuring charges ..............................        0.0          3.2         51.5
   Acquisition-related expenses .......................       17.2          0.0          0.0
                                                          --------     --------     --------
   Total operating expenses ...........................       51.8         50.7        146.5
                                                          --------     --------     --------
Income (loss) from operations before interest
  and income taxes ....................................       (3.5)       (11.5)      (179.2)
   Income from sales of activities ....................        0.0          0.0         71.8
   Interest income, net ...............................        1.2          1.0          1.2
   Foreign currency gains (losses) ....................       (0.7)         0.2          1.0
                                                          --------     --------     --------
Income (loss) before income taxes .....................       (3.0)       (10.3)      (105.2)
   Provision for income taxes .........................        4.5         (0.2)         6.5
Income (loss) before minority interest
  in income of consolidated subsidiary ................       (7.5)       (10.1)      (111.7)
                                                          --------     --------     --------
   Minority interest in income of
   consolidated subsidiary ............................        0.1         (0.0)         0.9
                                                          --------     --------     --------
Net income (loss) .....................................       (7.6)%      (10.1)%     (112.6)%
                                                          ========     ========     ========
</TABLE>


YEARS ENDED DECEMBER 31, 1998 AND 1999

         Net sales. Net sales decreased from $227.6 million in 1998 to $71.3
million in 1999. Net sales in North and South America (the "Americas") decreased
from $106.0 million in 1998 to $13.3 million in 1999, while sales outside of the
Americas decreased from $121.6 million in 1998 to $58 million in 1999.
Digianswer sales amounted to $4.7 million during 1999. This dramatic decrease in
sales was primarily due to significant price competition in the Token-Ring
market, most evident in the Americas, the failure of the Company to derive
significant sales from its Fast Ethernet product portfolio, and the effect of
the 1999 Transactions, and in particular, the sale of the Company's Token-Ring
business to Madge effective August 31, 1999. Following the Madge transaction,
the Company's sales consisted primarily of Token-Ring products sold to Madge at
extremely low margins and Ethernet and ATM products that were not part of the
product lines purchased by Madge. Such products consisted of goods on hand in
the Company's warehouses, as well as goods that were in the process of being
manufactured pursuant to existing commitments. Subsequent to the closing of the
Madge transaction and the scaling down of Olicom's sales and marketing
organizations, the Company's sales efforts were directed toward pushing through
the channels, utilizing various incentives. The Company has created reserves
with respect to the financial impact associated with right of distributors to
return products.

         Gross Profit. Gross profit decreased from $89.1 million in 1998 to a
negative gross profit of $23.3 million in 1999. Prior to the Company's sale of
its Token-Ring business to Madge, gross profit was being significantly and
adversely impacted by increased price competition in the Token-Ring market. In
connection with the closing of the 1999 Transactions, the Company incurred a
$33.7 million special charge, primarily related to write-offs of inventory. In
addition, commencing with the closing of the Madge transaction, the Company
began offering incentives designed to push Ethernet and ATM inventory


                                       23
<PAGE>   24

through the channel. Such incentives generally resulted in decreased selling
prices, which in turn depressed margins.

         Expenses. Total operating expenses decreased by $11.1 million from
$115.5 million in 1998 to $104.4 million in 1999. However, when adjusted for
restructuring charges of $7.3 million in 1998 and $36.7 million in 1999, there
would have been a net decrease in total operating expenses of $40.4 million in
1999 compared to 1998, on a pro forma basis. Restructuring charges of $36.7
million in 1999 related primarily to the 1999 Transactions, and were comprised
of write-downs of $6.4 million related to fixed assets and a write-off of $6.0
million in goodwill recorded in 1997 in connection with the acquisition of
CrossComm. Other significant restructuring charges in 1999 related to external
assistance and personnel related expenses.

         Depreciation and Amortization. Total depreciation and amortization,
which are included in the respective expense items, decreased from $8.9 million
in 1998 to $3.9 million in 1999. This decrease was attributable in part to the
above mentioned restructuring charges relating to the 1999 Transactions. The
depreciation of capitalized software related to the Company's integrated
management information system.

         Sales and Marketing. Sales and marketing expenses decreased from $71.3
million in 1998 to $42.2 million in 1999. This decrease was primarily a
consequence of the significant reduction in activities following the 1999
Transactions, whereby the Company's Token-Ring product line was acquired by
Madge, with the result that most of the Company's then-existing sales and
marketing activities were discontinued. The Company's current sales and
marketing activity is focused on pushing remaining inventory through the
channel.

         Research and Development. Research and development expenses decreased
from $23.2 million in 1998 to $14.3 million in 1999. This decrease was primarily
a consequence of the significant reduction in activities following the 1999
Transactions, whereby Intel acquired the Company's development team, with the
result that all of the Company's then-existing research and development
activities were discontinued.

         General and Administrative. General and administrative expenses
decreased from $13.7 million in 1998 to $11.2 million in 1999. This decrease was
primarily a consequence of the significant reduction in activities following the
1999 Transactions, which resulted in a significant reduction in general and
administrative staff. While the 1999 Transactions resulted in lower expense
levels in sales and marketing and in research and development, the Company's
remaining activities continue to require the attention of general and
administrative personnel.

         Interest and Other Financial Income. Net interest and other financial
income decreased from $2.3 million in 1998 to $0.8 million in 1999. This
decrease was primarily a consequence of a reduction in cash and cash equivalents
in the first two quarters of 1999, compared with 1998.

         Income From Sale of Activities. Income from sale of activities included
net proceeds from the 1999 Transactions, less fees to investment bankers and
other related expenses. Income related to the Madge transaction included an
amount, which is the net present value of a portion of the guaranteed minimum
payment. Only after the expiration of twelve quarters following the closing of
the Madge transaction will the Company be able to calculate the exact amount of
additional payments stipulated in the agreement with Madge. Other contingent
income relating to the 1999 Transactions has not been recorded as income in 1999
(see "The 1999 Transactions" above).


                                       24
<PAGE>   25

         Income Taxes. The Company's income tax increased from a tax benefit of
$531,000 for 1998 to an income tax of $4.7 million in 1999, primarily due to a
tax asset write-down in connection with Olicom, Inc.

YEARS ENDED DECEMBER 31, 1997 AND 1998

         Net sales. Net sales decreased from $238.2 million in 1997 to $227.6
million in 1998. Net sales in the Americas decreased from $112.2 million in 1997
to $106 million in 1998, while sales outside of the Americas decreased from $126
million in 1997 to $121.6 million in 1998.

         During 1998, the Company's revenues were favorably influenced by the
sales of Network Infrastructure Products, as to which net sales increased from
$49.2 million in 1997 to $64.9 million in 1998. This product group includes
Token-Ring and ATM switches and the product portfolio acquired from the former
CrossComm. In addition, the Company's revenues reflected 12 months operations of
the former CrossComm, while revenues during 1997 reflected only operations of
the former CrossComm subsequent to June 12, 1997. As a consequence, primarily
due to increased price competition with respect to Network Interface Cards,
revenue derived from such products decreased to $110.6 million, from $128.5
million in 1997, a decrease of 14%.

         Total service revenue during 1998 was $8.5 million, an increase of 43%
compared with 1997. However, the expansion of the Company's professional service
relationship with VITAL Network Services during the fourth quarter of 1998
resulted in decreased service revenue during such quarter. It should be noted
that levels of service revenue during 1997 substantially related to revenue
during the last six months of such period, owing to the acquisition of the
former CrossComm in June 1997 (and, as a result, service revenues during 1998
reflected revenues during a longer period than in 1997).

         Gross Profit. Gross profit decreased by 22.6%, from $115.0 million in
1997 to $89.1 million in 1998, and decreased as a percentage of net sales from
48.3% in 1997 to 39.2% in 1998. The decrease in gross margins was primarily due
to increased price competition for both the Network Interface Card and switch
markets, and the Company's inability during 1998 to sufficiently reduce
manufacturing costs in its product line to compensate for declines in selling
prices. In addition, during 1998 the Company incurred a $3.5 million special
charge, primarily related to write-offs of inventory of obsolete products.

         Expenses. Total operating expenses decreased by $8.0 million during
1998; however, when adjusted for acquisition-related expenses in 1997 of $40.9
million and restructuring charges of $7.3 million in 1998, there would have been
a net increase in total operating expenses from $82.5 million in 1997 to $108.1
million in 1998, or an increase of $25.6 million (or 31%) during 1998 on a pro
rata basis compared to 1997. The main reason for this increase was that 1997 did
not reflect a full year of inclusion of CrossComm's operations in the Company's
results of operations (such operations were included subsequent to CrossComm's
acquisition in June 1997). The major increases in expenses during 1998 related
to employee costs as well as sales promotion.

         Sales and Marketing. Sales and marketing expenses increased 32.6%, from
$53.8 million in 1997 to $71.3 million in 1998. The increase in 1998 was
primarily due to increased marketing activities in the United States, Europe and
the Far East.



                                       25
<PAGE>   26

         Research and Development. Research and development expenses increased
30.6%, from $17.7 million in 1997 to $23.2 million in 1998. The increase in
research and development expenses was in line with the strategic decision to be
a leading supplier of Token-Ring solutions and ATM and Ethernet switching.

         General and Administrative. General and administrative expenses
increased 23.8%, from $11.0 million in 1997 to $13.7 million in 1998. The
increase was attributed to an increased average number of employees in 1998
compared to 1997, and to increased occupancy expense during 1998.

         Restructuring Charges. The Company incurred restructuring charges
related to two separate corporate actions during 1998. The expansion of the
Company's professional service relationship with VITAL Network Services in
September 1998 resulted in the transfer or termination of approximately 50
employees in administrative functions. As a result thereof, the Company recorded
charges of $2.3 million related to staff reductions and fixed asset write-offs.

         The second corporate action was the implementation, in November 1998,
of a new business strategy that resulted in a significant reduction in the
number of employees. As a consequence thereof, the Company recorded charges of
$6.6 million related to staff reductions and fixed asset write-offs.

         Interest and Other Financial Income. Net interest and other financial
income decreased from $3.0 million in 1997 to $2.3 million in 1998. This
decrease was primarily a consequence of a reduction in cash and cash
equivalents.

         Income Taxes. The Company's income tax decreased from $10.7 million
during 1997 to a tax benefit of $531,000 for 1998.

LIQUIDITY AND CAPITAL RESOURCES

         Although the 1999 Transactions have contributed to an improvement in
Olicom's financial position, significant operational losses during 1999 and
substantial asset write-downs and other charges associated with the 1999
Transactions have resulted in a substantial decrease in shareholders' equity as
at December 31, 1999, compared with the same date in 1998.

         During 1999, Olicom had a negative cash flow of $42.1 million from
operating activities and $48.9 million (net) in capital expenditures. The
Company's available cash totaled $28.3 million as of December 31, 1999, which
represented 58.4% of total assets.

         The net cash used in operating activities of $42.1 million in 1999 was
due in significant part to the Company's net loss of $80.3 million and
depreciation, amortization and write-offs of $23 million.

         Net cash used for investing activities during 1998 and 1999 was $(9.8)
million and $48.9 million, respectively, and consisted, prior to the 1999
Transactions, in large part of capital expenditures associated with the
expansion of sales and marketing, and research and development activities mainly
associated with the Company's Fast Ethernet strategy. At December 31, 1999, the
Company had no material commitments for capital expenditures.

         To date, inflation has not had a material impact on the Company's
financial results.


                                       26
<PAGE>   27

         The Company presently intends to retain any earnings. If and when
dividends are paid, such payment will be made in Danish kroner.

RECENT DEVELOPMENTS

         Since the closing of the 1999 Transactions, the Company's main focus
has been on the fulfillment of various product delivery and associated warranty
and service obligations, primarily through various agreements with Madge and
Intel, a warranty and support agreement with VITAL, and agreements and
arrangements with Olicom's other business partners and service providers.

         In late 1999, Olicom relocated its international headquarters to a
smaller facility adjacent to its previous facilities. In addition, the Company
relocated its U.S. headquarters to a smaller facility, and is in the process of
winding down its U.S. operations and closing other U.S. and international
offices.

         On January 10, 2000, Olicom's Board of Directors announced the
intention of the Company's executive management team, comprising Niels Christian
Furu, chief executive officer, and Lars Larsen, chief financial officer, to
resign following the announcement of Olicom's financial results for 1999. Mr.
Furu will remain with Olicom until the end of February 2000 and Mr. Larsen until
the end of April 2000. A new management team is expected to be appointed shortly
after the Annual General Meeting of Shareholders.

         On January 31, 2000, the Company announced that it had received
notification from Nasdaq relating to the continued listing of the Common Shares
and the common stock purchase warrants on Nasdaq (see "Nature of Trading
Market").

         On January 31, 2000, the Company announced the discontinuation of its
branded ATM, Fast Ethernet and Enterprise products. (see "Description of
Business -- Products").

YEAR 2000

         The Company to date has experienced no significant adverse effects of
the Year 2000 problem. However, the Company can provide no assurance that claims
regarding the Year 2000 will not be raised in the future.

COMMON EUROPEAN CURRENCY

         The Treaty on European Economic and Monetary Union provides for the
introduction of a single European currency, the "Euro", in substitution for the
national currencies of the member states of the EU that adopt the Euro. The Euro
became a reality on January 1, 1999, when irrevocable conversion rates were set
between the national currencies of the 11 member states of the EU that have
qualified to participate, and have elected to participate, in the Euro at this
time and when foreign exchange operations in the Euro commenced. Of the European
countries in which Olicom maintains a presence, the Netherlands, France, Germany
and Spain are among such 11 member states. Sweden did not qualify, and the
United Kingdom and Denmark elected not to participate in the Euro at this time.
Poland is not currently a member state of the EU. As the Company's operational
and financial activities have been


                                       27
<PAGE>   28

significantly reduced, the Euro is not expected to impact the Company's results
of operations to a material extent.

BUSINESS ENVIRONMENT AND RISK FACTORS (AGAIN THIS ASSUMES AN ON GOING OPERATION)

         The Company's future operating results may be affected by various
trends and factors, which the Company must successfully manage. In addition,
there are trends and factors that are beyond the Company's control that may
affect its operations.

         Such trends and factors include, without limitation, the following:
conditions within the networking industry, and economic conditions generally;
rapid technological change, frequent product introductions, changes in customer
needs and evolving industry standards; fluctuations in the Company's revenues
and operating results from quarter to quarter, due to a variety of factors,
including, among others, the failure of the Company to timely and successfully
execute material aspects of its remaining activities and operational and
promotional decisions by Madge, as well as by distributors and value added
resellers, which could affect their supply of, or end-user demand for, the
Company's products or Token-Ring products on which future payments are based
(see "The 1999 Transactions"); the degree of success that Madge realizes from
the integration of the Company's Token-Ring product line with Madge's
operations; any claims for indemnification that may be made by Madge, Intel or
Motorola with respect to warranties, representations or covenants made by the
Company in connection with the 1999 Transactions; the absence, in general, of
any continuing obligations on the part of distributors to purchase products from
the Company; unexpected changes in regulatory requirements, tariffs and other
trade barriers, longer accounts receivable payment cycles and other risks
associated with international operations and with the discontinuation of various
of the Company's products; the ability or inability of the Company to hedge
against foreign currency, exchange rates and fluctuations in such rates; and a
change in the value of the U.S. dollar (the Company's functional currency)
relative to other currencies.

         In light of the foregoing factors, as well as other factors affecting
the Company's operating results, past trends should not be used by investors or
others to anticipate future trends, and prior operating performance may not be
an accurate indicator of future performance.


ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

         As the Company conducts its business world-wide, the Company's sales
may be affected by changes in demand resulting from fluctuations in currency
exchange rates, as well as by governmental controls and other risks associated
with international sales (such as export licenses, political instability, trade
restrictions and changes in tariff and freight rates). The Company generates
revenues primarily in U.S. dollars (including revenues generated from the
agreements with Intel, Madge and Motorola), and incurs expenses in a number of
currencies, principally in U.S. dollars and Danish kroner. Although the Company
seeks to manage its foreign currency exposures by matching non-dollar revenues
and expenses and by entering into hedging transactions, there can be no
assurance that exchange rate fluctuations will not have a material adverse
effect on the Company's business, financial condition or results of operations.
See also "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Common European Currency".


                                       28
<PAGE>   29

         At December 31, 1999, the effect of a hypothetical uniform 10%
strengthening in the value of the U.S. dollar relative to the Danish kroner
would result in an increase in operating income of approximately $600,000 for
the year ended December 31, 2000. Comparatively, at December 31, 1998, the
effect of a hypothetical uniform 10% strengthening in the value of the U.S.
dollar relative to the Danish kroner would have resulted in an increase in
operating income of approximately $3.8 million for the year-ended December 31,
1999. In addition to the direct effects of changes in exchange rates, which are
a changed dollar value of the resulting expenses, changes in exchange rates also
might affect the volume of sales outside the U.S. The Company's sensitivity
analysis of the effects of changes in foreign currency exchange rates does not
factor in a potential change in sales levels.


ITEM 10. OFFICERS AND DIRECTORS OF THE REGISTRANT.

         As of February 24, 2000, the members of the Company's Board of
Directors, the executive officers of the Company, and other key employees are as
shown below.

         On January 10, 2000, Olicom's Board of Directors announced the
intention of the Company's executive management team, comprising Niels Christian
Furu, chief executive officer, and Lars Larsen, chief financial officer, to
resign following the announcement of Olicom's financial results for 1999. Mr.
Furu will remain with Olicom until the end of February 2000 and Mr. Larsen until
the end of April 2000. The timing of the resignations has been agreed in
accordance with the Company's reorganization. Olicom's Board of Directors is
considering the composition of the future management team.

<TABLE>
<CAPTION>
Name                                      Age       Position
----                                      ---       --------
<S>                                      <C>       <C>
Jan Bech...........................       60        Chairman of the Board of Directors
Bo F. Vilstrup.....................       57        Deputy Chairman of the Board of Directors
Frank G. Petersen..................       66        Member of the Board of Directors
Michael J. Peytz...................       43        Member of the Board of Directors
Anders Knutsen.....................       52        Member of the Board of Directors
Soren Bjerre-Nielsen...............       47        Member of the Board of Directors

Niels Christian Furu...............       43        President and Chief Executive Officer
Lars Larsen........................       35        Executive Vice President and Chief Financial Officer
Edward P. Simmonds.................       44        President and Chief Executive Officer of Olicom, Inc.
Jorgen Hog.........................       52        Vice President of Network Product Marketing
Mette R.L. Fogt....................       36        Director of Legal Affairs
</TABLE>

         Mr. Bech has been Chairman of the Company's Board of Directors since
1985. He serves as Chairman of the Board and Managing Director of ARCO-TECH
Ltd., a company engaged in the business of consulting in strategic marketing.
Mr. Bech previously served as a Vice President of Ing. C. Olivetti & C., S.p.A.,
with responsibility for its commercial activities in Scandinavia (from 1985 to
1992).

         Mr. Vilstrup has been a member of the Board of Directors since 1992 and
Deputy Chairman of the Board since 1994. He is an attorney and was a partner in
the law firm of Lett, Vilstrup & Partnere, Copenhagen, Denmark (from 1972 to
1999).


                                       29
<PAGE>   30

         Mr. Petersen has been a director of the Company since 1996. He was
employed by IBM from 1957 until his retirement in 1994. At the time of his
retirement, he served as Chairman and President of IBM Nordic AB, with
responsibility for IBM's commercial activities in Scandinavia.

         Mr. Peytz has been a director of the Company since 1996. He has served
as Managing Director and Chief Executive Officer of EuroCom Industries A/S since
1997. Mr. Peytz previously served as Division Director for Alcatel Kirk A/S,
with responsibility for Alcatel's space electronics business in Denmark (from
1994 to 1997). He previously was a management consultant with McKinsey & Company
(from 1985 to 1994).

         Mr. Knutsen has been a director of the Company since 1997. He has
served as Managing Director and Chief Executive Officer of Bang & Olufsen A/S, a
company that develops and markets audio and visual products (since 1991).

         Mr. Bjerre-Nielsen has been a director of the Company since 1998. He
has served as Vice Executive Officer and Chief Financial Officer of Danisco A/S,
a food ingredients conglomerate (since 1995). Prior thereto, he was a
state-authorized Public Accountant, being a partner at Deloitte & Touche (from
1982 to 1995) and managing partner (from 1986 to 1995).

         Mr. Furu was appointed as President and Chief Executive Officer in
1998. He joined the Company in 1997 as Executive Vice President and Chief
Operating Officer. Prior to joining the Company, Mr. Furu served as Vice
President of IBM Denmark A/S and Director of Nordic PC Sales (from 1995 to
1997). Prior thereto, he served as Director of Sales for Finance and
Telecommunications for IBM Denmark A/S (from 1993 to 1995) and as Assistant to
the General Manager of Marketing, IBM Europe (from 1991 to 1993).

         Mr. Larsen has been employed by the Company since February 1999 as
Executive Vice President and Chief Financial Officer. Prior to joining the
Company, Mr. Larsen was Director of Health Care, Finance and Information
Technology (and prior thereto, Director of Corporate Planning & Economy) at Novo
Nordisk A/S, a Danish pharmaceuticals manufacturer (from 1995 to 1999). Prior
thereto, he was Group Controller at Baltica Holding A/S (from 1991 to 1995).

         Mr. Simmonds has been employed by the Company since 1998 and became
President and Chief Executive Officer of Olicom, Inc. in October 1999, after
having served as Director of Finance and Administration. Prior to joining the
Company, Mr. Simmonds was Vice President and Chief Financial Officer of Beckett
Corporation, a Dallas-based manufacturing company.

         Mr. Hog has been employed by the Company since 1994, having served as
its Director of Business Development. In 1996, Mr. Hog became Vice President of
Strategic Marketing. Prior to joining the Company, Mr. Hog was the President of
CR Systems A/S, a Danish data communications company.

         Ms. Fogt has served as Director of Legal Affairs since 1997. Prior to
joining the Company, Ms. Fogt served as Secretary to the Management at Jacob
Holm & Sons A/S, a Danish manufacturer of fiber products, primarily for the
hygiene industry (from 1995 to 1997). Prior thereto, Ms. Fogt was an attorney at
the law firm Kromann & Munter (from 1988 to 1995).


                                       30
<PAGE>   31

         Except for Mr. Simmonds, all directors and members of corporate
management are Danish citizens. There are no family relationships among
directors and executive officers of the Company or its subsidiaries.

         The Company's Articles of Association provide for a Board of Directors
of four to eight members, to be elected by the shareholders to serve one-year
terms. In addition, directors may be elected for four-year terms by the
Company's employees, in accordance with Danish law. The statutory rights of the
Company employees to elect directors have not been exercised to date. Officers
of the Company serve at the discretion of the Board of Directors.


LIMITATION OF LIABILITY AND INDEMNIFICATION AGREEMENTS

         The Company has entered into Indemnification Agreements with its
directors, executive officers and key employees. Each such Indemnification
Agreement provides for indemnification of the Company's directors, executive
officers and key employees to the fullest extent permitted by the Companies Act
of the Kingdom of Denmark (the "Companies Act"). Additionally, Olicom, Inc., has
entered into Indemnification Agreements with its directors, executive officers
and key employees. Each such Indemnification Agreement provides for
indemnification of the directors, executive officers and key employees of
Olicom, Inc., to the fullest extent permitted by the Delaware General
Corporation Law. Further, such Indemnification Agreements permit advancing
attorney's fees and all other costs, expenses, obligations, fines and losses
paid or incurred by a director, executive officer or key employee generally in
connection with the investigation, defense or other participation in any
threatened, pending or completed action, suit or proceeding or any inquiry or
investigation thereof, whether conducted by or on behalf of the Company or any
other party. If it is later determined that the director, executive officer or
key employee is or was not entitled to indemnification under applicable law, the
Company will be entitled to reimbursement by the director, executive officer or
key employee.

         The Indemnification Agreements further provide that in the event of a
change in control of the Company or Olicom, Inc., with respect to all matters
thereafter arising concerning the rights of directors, executive officers and
key employees to indemnity payments and expense advances, all determinations
regarding claims will be made only by a court of competent jurisdiction or by
special independent legal counsel selected by the director, executive officer or
key employee and approved by the Company or Olicom, Inc., as appropriate.

         To the extent that the Board of Directors of the Company or Olicom,
Inc., or their respective shareholders may in the future wish to limit or repeal
the ability of the Company or Olicom, Inc., to indemnify directors, executive
officers and key employees, such repeal or limitation may not be effective as to
directors, executive officers and key employees who are parties to such
Indemnification Agreements, because their rights to full protection will be
contractually assured by the Indemnification Agreements. It is anticipated that
similar contracts may be entered into, from time to time, with future directors,
executive officers and key employees of the Company and Olicom, Inc.


ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.

         An aggregate of approximately $1,056,000 was paid by the Company to its
directors and executive officers as a group (9 persons) for services rendered
during fiscal year 1999 in all capacities, and


                                       31
<PAGE>   32

approximately $841,000 was paid by the Company during fiscal year 1999 to its
senior management, consisting of the Company's President and Chief Executive
Officer, its Chief Financial Officer and its former Chief Technology Officer,
registered with the Commercial and Companies Agency of the Kingdom of Denmark.


ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES.

         At February 24, 2000, the Company had outstanding options to its
employees and directors, and employees and directors of Olicom, Inc., to
purchase an aggregate of 449,950 Common Shares (the foregoing includes options
assumed by the Company in connection with the acquisition of CrossComm). The
exercise price for such options ranges from $3.925 to $30.25. Such options
terminate on various dates through February 28, 2007.

         At February 24, 2000, options to purchase an aggregate of 246,000
Common Shares were held by directors and executive officers of the Company.


ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS.

         See "Officers and Directors of the Registrant -- Limitation of
Liability and Indemnification Agreements."

         The Company's policy is to require that all transactions between the
Company and its officers, directors and other affiliates be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties,
and that all such transactions be approved by a majority of the disinterested
members of the Company's Board of Directors.




                                       32
<PAGE>   33


                                     PART II

         Not applicable.


                                    PART III


ITEM 15. DEFAULTS UPON SENIOR SECURITIES

         Not applicable.


ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
         SECURITIES.

         Not applicable.


                                     PART IV


ITEM 17. FINANCIAL STATEMENTS.

         The Company has responded to Item 18 in lieu of responding to this
Item.



                                       33
<PAGE>   34


ITEM 18. FINANCIAL STATEMENTS.


                         Report of Independent Auditors


The Board of Directors and Shareholders,
Olicom A/S


We have audited the accompanying consolidated balance sheets of Olicom A/S and
subsidiaries as of December 31, 1998 and 1999, and the related consolidated
statements of income, comprehensive income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Olicom A/S and
subsidiaries at December 31, 1998 and 1999, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has incurred recurring
operating losses and has a negative cash flow from operations. As described in
Note 1, substantially all of the Company's operations have been discontinued,
and management is considering alternative strategies for the Company. The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of the
Company's future strategy.


/s/ Ernst & Young

Ernst & Young
Statsautoriseret Revisionsaktieselskab

Copenhagen, February 24, 2000



                                       34
<PAGE>   35


                                   Olicom A/S
                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                DECEMBER 31
                                                           1998              1999
                                                       ------------      ------------
                                                               (In thousands)
<S>                                                    <C>               <C>
ASSETS
Current assets:
  Cash and cash equivalents                            $     22,494      $     28,327

  Restricted cash                                                 0             8,844
  Accounts receivable, less allowance of
    $2,577 in 1998 and $10,477 in 1999                       44,837             4,157
Inventories:
    Finished goods                                           30,633             2,837
    Raw materials                                             8,875             1,499
                                                       ------------      ------------
                                                             39,508             4,336

Deferred income taxes (Note 4)                                4,335                 0
Prepaid expenses and other current assets                    10,262             2,244
                                                       ------------      ------------
Total current assets                                        121,436            47,908

Investments in affiliated companies                             958                 0

Property and equipment:
  Leasehold improvements                                      4,385               694
  Equipment                                                  34,826             9,755
                                                       ------------      ------------
                                                             39,211            10,449
 Accumulated depreciation                                   (19,761)           (9,889)
                                                       ------------      ------------
                                                             19,450               560
Goodwill, net of accumulated amortization
   and write-down of $3,641 in 1998 and
   $9,684 in 1999                                             7,169                 0
                                                       ------------      ------------
Total assets                                           $    149,013      $     48,468
                                                       ============      ============
</TABLE>


See accompanying notes


                                       35

<PAGE>   36


                                   Olicom A/S
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                               DECEMBER 31
                                                                          1998              1999
                                                                      ------------      ------------
                                                                              (In thousands)
<S>                                                                   <C>               <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                      $     24,664      $     11,014
  Accrued payroll and related expenses                                       6,438               801
  Accrued product warranty expense                                           1,123               377
  Deferred revenue                                                             611                62
  Accrued restructuring costs                                                4,935             8,680
  Other accrued expenses                                                     7,416             4,999
  Notes payable, current                                                         0                97
                                                                      ------------      ------------
Total current liabilities                                                   45,187            26,030

Minority interests                                                             803                 0

Shareholders' equity:
 Common shares, DKK 0.25 nominal value
  Authorized and issued - 18,594 in 1998 and 18,566 in 1999                    715               715
  Additional paid-in capital                                               104,364           103,732
  Retained earnings                                                         15,789           (64,518)
  Treasury stock - 731 in 1998 and 702 in 1999                             (17,462)          (17,104)
  Unearned compensation                                                       (383)                0
  Other comprehensive income                                                     0              (387)
                                                                      ------------      ------------

Total shareholders' equity                                                 103,023            22,438
                                                                      ------------      ------------
Total liabilities and shareholders' equity                            $    149,013      $     48,468
                                                                      ============      ============
</TABLE>


See accompanying notes


                                       36

<PAGE>   37


                                   Olicom A/S
                        Consolidated Statements of Income


<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31
                                                                    1997            1998            1999
                                                                 ----------      ----------      ----------
                                                                               (In thousands
                                                                          except per share amounts)
<S>                                                              <C>             <C>             <C>
Net sales                                                        $  238,229      $  227,602      $   71,291
Cost of sales                                                       123,195         134,990          60,874
Special charges related to inventories (Note 5)                           0           3,463          33,737
                                                                 ----------      ----------      ----------
Gross profit                                                        115,034          89,149         (23,320)
                                                                 ----------      ----------      ----------
Operating expenses:
Sales and marketing                                                  53,754          71,300          42,216
Research and development                                             17,748          23,174          14,298
General and administrative                                           11,032          13,657          11,218
Restructuring charges (Note 5)                                            0           7,327          36,695
Acquisition-related expenses                                         40,917               0               0
                                                                 ----------      ----------      ----------
Total operating expenses                                            123,451         115,458         104,427
                                                                 ----------      ----------      ----------
Income (loss) from operations before interest
and income taxes                                                     (8,417)        (26,309)       (127,747)

Income from sale of activities                                            0               0          51,205
Interest and other financial income                                   3,663           2,978           1,221
Interest and other financial expense                                   (697)           (676)           (392)
Foreign currency gains (losses)                                      (1,736)            481             722
                                                                 ----------      ----------      ----------
Income (loss) before income taxes                                    (7,187)        (23,526)        (74,991)

Income taxes (Note 4)                                                10,689            (531)          4,656
                                                                 ----------      ----------      ----------
Income (loss) before minority interest in income
of consolidated subsidiary                                          (17,876)        (22,995)        (79,647)

Minority interest in income of consolidated subsidiary                  245             (56)            660
                                                                 ----------      ----------      ----------

Net income (loss)                                                $  (18,121)     $  (22,939)     $  (80,307)
                                                                 ==========      ==========      ==========
Earnings (loss) per share:

Earnings (loss) per share, basic and diluted                     $    (1.15)     $    (1.28)     $    (4.50)
                                                                 ==========      ==========      ==========
Weighted average shares outstanding                                  15,821          17,894          17,864
                                                                 ==========      ==========      ==========
</TABLE>


See accompanying notes



                                       37
<PAGE>   38


                                   Olicom A/S
                 Consolidated Statements of Comprehensive Income


<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31
                                                                          1997              1998              1999
                                                                      ------------      ------------      ------------
                                                                                       (In thousands)

<S>                                                                   <C>               <C>               <C>
Net income (loss)                                                     $    (18,121)     $    (22,939)     $    (80,307)

Other comprehensive income (loss), net of tax:
    Currency translation adjustments                                             0                 0              (387)

    Unrealized holding gains (losses) arising during period                    660                30                 0
    Less: reclassification adjustment for gains included in
             net income                                                       (121)              (98)               (0)
                                                                      ------------      ------------      ------------

Comprehensive net income (loss)                                       $    (17,582)     $    (23,007)     $    (80,694)
                                                                      ============      ============      ============
</TABLE>


                                       38
<PAGE>   39


                                       Olicom A/S
                               Consolidated Statements of
                                  Shareholders' Equity

<TABLE>
<CAPTION>
                                                                                                             Other
                                                         Additional                                         compre-
                                                 Common   paid-in    Retained     Treasury      Unearned    hensive
                                                 stock    capital    earnings      stock      compensation   income     Total
----------------------------------------------------------------------------------------------------------------------------------
                                                                  (In thousands)
<S>                                              <C>      <C>        <C>         <C>            <C>         <C>        <C>
BALANCE AT DEC. 31, 1996                         $ 614    $ 52,348   $  56,849   $  (11,831)    $      0    $  (471)   $ 97,509

Net (loss) for 1997                                                    (18,121)                                         (18,121)
Issuance of 2,537 common stock to
   acquire CrossComm                                97      38,691                                                       38,788
Issuance of 1,023 warrants to
   acquire CrossComm                                         3,806                                                        3,806
Exchange of vested CrossComm
   options for Olicom options                                3,834                                                        3,834
Exchange of unvested CrossComm
   options for Olicom options                                1,859                                (1,859)                     0
Purchase of treasury stock -
   630 common stock                                                                 (15,716)                            (15,716)
320 common stock sold through offering
   at the Copenhagen Stock Exchange                          5,295                    3,030                               8,325
Options exercised -
   626 common stock                                         (3,326)                   9,529                               6,203
Warrants exercised -
   20 common stock                                   1         126                                                          127
Change in unrealized gains (losses)                                                                             539         539
Amortization of unearned compensation                                                                265                    265
                                          ----------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1997                         $ 712    $102,633   $  38,728   $  (14,988)    $ (1,594)   $    68    $125,559

Net (loss) for 1998                                                    (22,939)                                         (22,939)
Purchase of treasury stock -
   400 common stock                                                                 (10,358)                            (10,358)
Options exercised -
   609 common stock                                            (12)                   7,884                               7,872
Warrants exercised -
   99 common stock                                   3       1,950                                                        1,953
Change in unrealized gains (losses)                                                                             (68)        (68)
Amortization of unearned compensation                         (207)                                1,211                  1,004
                                          ----------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1998                         $ 715    $104,364   $  15,789   $  (17,462)    $   (383)   $     0    $103,023

Cancellation of treasury shares etc.                          (358)                     358                                   0
Currency translation adjustments                                                                               (387)       (387)
Net (loss) for 1999                                                    (80,307)                                         (80,307)
Amortization of unearned compensation                         (274)                                  383                    109
                                          ----------------------------------------------------------------------------------------
BALANCE AT DEC. 31, 1999                         $ 715    $103,732   $  (64,518) $  (17,104)    $      0    $  (387)   $ 22,438
                                          ----------------------------------------------------------------------------------------
</TABLE>


See accompanying notes


                                       39
<PAGE>   40



                               Olicom A/S

                 Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31
                                                               1997            1998            1999
                                                            ----------      ----------      ----------
                                                                          (In thousands)
<S>                                                         <C>             <C>             <C>
OPERATING ACTIVITIES
Net income                                                  $  (18,121)     $  (22,939)     $  (80,307)

Adjustments to reconcile net income to net
 cash provided by (used in) operating activities:
   Depreciation and write-off of fixed assets                    4,954           6,937          15,960
   Amortization and write-off of goodwill                        1,262           1,963           7,034
   Non cash compensation                                           265           1,004             109
   Gain on sale of investment                                     (121)            (98)        (24,318)
   Gain on sale of activities                                        0               0         (26,887)
   Deferred income taxes                                          (980)         (2.410)          4,335
   Minority interest in earnings                                   245             (56)            660
   Share of net income (loss) of affiliates                       (206)           (225)           (198)
   Acquisition-related expenses                                 40,917               0               0
   Changes in operating assets and liabilities:
     Accounts receivable                                       (15,716)         13,130          35,865
     Inventories                                                   (98)        (13,845)         32,616
     Prepaid expenses and other current assets                  (2,198)         (5,925)          6,241
     Accounts payable                                           (4,757)          5,849          (9,858)
     Accrued payroll and related expenses                          241           2,346          (5,250)
     Accrued product warranty expense                             (886)              5            (746)
     Deferred revenue                                             (638)         (2,331)           (549)
     Accrued restructuring costs                                     0           4,935           3,745
     Other accrued liabilities                                   8,180          (1,099)           (637)
     Income taxes payable                                         (371)           (363)            113
                                                            ----------      ----------      ----------
Net cash provided by/(used in) operating activities             11,972         (13,122)        (42,072)

INVESTING ACTIVITIES
Capital expenditures                                            (8,132)        (12,681)         (2,108)
Proceeds from sale of property and equipment                       136           1,979           5,038
Proceeds from sale of investments                               42,089             945          28,521
Proceeds from sale of activities                                     0               0          26,823
Restricted cash                                                      0               0          (8,844)
Business acquisitions - net of cash acquired
  and other investments                                        (40,161)              0            (483)
                                                            ----------      ----------      ----------
Net cash used in investing activities                           (6,068)         (9,757)         48,947
</TABLE>

See accompanying notes

                                       40
<PAGE>   41




                                   Olicom A/S

                Consolidated Statements of Cash Flows (continued)


<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31
                                                                 1997            1998            1999
                                                              ----------      ----------      ----------
                                                                            (In thousands)
<S>                                                           <C>             <C>             <C>
FINANCING ACTIVITIES
Change in notes payable, current                              $        0      $        0      $       97
Proceeds from sale of treasury stock -
  Copenhagen Stock Exchange                                        8,325               0               0
Proceeds from options and warrants exercised                       6,330           9,825               0
Purchase of treasury stock                                       (15,716)        (10,358)              0
                                                              ----------      ----------      ----------
Net cash used in financing activities                             (1,061)           (533)             97
Effects of exchange rates on cash                                   (915)            315          (1,139)
                                                              ----------      ----------      ----------
Net increase (decrease) in cash and cash equivalents               3,928         (23,097)          5,833
Cash and cash equivalents at beginning of year                    41,663          45,591          22,494
                                                              ----------      ----------      ----------

Cash and cash equivalents at end of year                      $   45,591      $   22,494      $   28,327
                                                              ==========      ==========      ==========

Interest paid during the year                                 $       58      $       50      $      153
                                                              ==========      ==========      ==========

Income taxes paid during the year                             $   10,645      $    6,566      $    2,426
                                                              ==========      ==========      ==========
</TABLE>


See accompanying notes


                                       41
<PAGE>   42

                                   Olicom A/S

                   Notes to Consolidated Financial Statements

1. ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

         The Company was a world-wide vendor of Asynchronous Transfer Mode,
Token Ring, Ethernet and multi-protocol routing products used in local area and
wide area networks. During 1999 the Company sold its Token Ring Business to
Madge Networks in August, and its development group and certain intellectual
properties to Intel in October. These transactions affected the valuation of the
inventory significantly as the value of the Token Ring inventory reflects the
purchase commitment included in the agreement with Madge Networks. The rest of
the inventory has been revalued to reflect the end of life decision of the
remainder of the Company's products as announced in January 20, 2000.

         The disposal and discontinuation of most of the business at Olicom has
also affected the carrying value of fixed assets which has been reduced to
reflect the reduction in the scope of future business for Olicom. As of
beginning 2000 the expected useful lifetime of the remaining fixed assets has
been set to the end of 2000.

         The prior year amounts have been reclassified to conform to the current
year presentation of the financial statements.

         Prior year's financial statement presentation to disclose the sale of
the Company's 75% investment in Lasat A/S ("Lasat") as a discontinued operation
has been changed. The balance sheet, the statements of income and cash flows of
Lasat have now been consolidated through to the date of disposal.

BASIS OF PRESENTATION

         The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities, in the normal course of business. As shown in the financial
statements during the years ended December 31, 1997, 1998 and 1999, the Company
incurred losses of $18 million, $23 million and $80 million, respectively.

         Despite the losses, management is of the opinion that preparation of
the financial statements on a going concern basis is appropriate, because the
Company has sufficient future revenue and funds available to satisfy the
Company's liabilities as and when they fall due, and is considering alternative
strategies for the Company.

REPORTING CURRENCY

         Although the Company and its subsidiaries maintain their books and
records in local currencies, as required by law, the Consolidated Financial
Statements have been prepared in U.S. dollars because the U.S. dollar is the
currency of the primary economic environment in which the Company and its
subsidiaries conduct their operations.

         The majority of the Company's sales are billed and collected in U.S.
dollars, and the majority of the Company's purchases of raw materials and
finished goods inventories are invoiced and paid in U.S. dollars.


                                       42
<PAGE>   43

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of Olicom
A/S and its majority-owned subsidiaries (the Company). The Company's investments
in 20-50% owned companies are accounted for by the equity method of accounting.

USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, which affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

         The Company's inventories and capitalized technologies consist
primarily of items which are susceptible to technological obsolescence, a fact
which has been considered in determining asset valuation reserves as of December
31, 1999. However, in the event of certain circumstances, such as the emergence
of otherwise unforeseen new technologies and significant changes in anticipated
market requirements and conditions, additional reserves related to assets held
as of December 31, 1999 could be required in the future.

CASH AND CASH EQUIVALENTS

         Cash and cash equivalents represent cash and short-term deposits with
maturities of less than three months at the time of purchase.

INVENTORIES

         Inventories are stated as the lower of cost or market with cost
determined on the basis of the first in, first out method. Raw materials
inventories are sold at the Company's cost to subcontractors who assemble
products to the Company's specifications. Finished goods inventories include
completed products purchased from subcontractors. Finished goods to be sold to
Madge Networks have been written down to net realizable value.

LEASEHOLD IMPROVEMENTS AND EQUIPMENT

         Leasehold improvements and equipment are carried at cost. Depreciation
is charged on a straight-line basis to costs and expenses over the expected
useful lives of the assets. Equipment is depreciated over the expected useful
life ending December 31, 2000. Leasehold improvements are amortized over the
shorter of their estimated lives or non-cancelable term of the lease.

GOODWILL

         Cost in excess of net assets of businesses acquired (goodwill)
represents the unamortized excess of the cost of acquiring a business over the
fair value of the assets acquired at the date of acquisition. Amortization is
computed by the straight-line method over the estimated life of the benefit
received, which is five to seven years.

         The Company applies the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets to be
Disposed of", in evaluating its fixed and intangible assets.

ACCOUNTS RECEIVABLE

         Accounts receivable are stated at nominal value less allowance for
losses on doubtful debtors, returned products in process and price-protection.
The allowance is based on an individual evaluation of each debtor. Should the
debtor end up with a negative balance (e.g., a liability) it is reclassified to
Accounts Payable.


                                       43
<PAGE>   44

REVENUE RECOGNITION

         Revenue is recognized when products are shipped. Service revenues are
deferred and recognized ratably over the contractual periods. Certain sales have
been made allowing a right of return and price protection, for which the Company
has made a provision.

ACCRUED PRODUCT WARRANTY EXPENSE

         The Company provides for the estimated cost of warranty at the time of
product shipment.

RESEARCH AND DEVELOPMENT COSTS

         Research and development costs, including costs of developing software
products, are expensed as incurred. Application of Statement of Financial
Accounting Standards No. 86, "Accounting for the Costs of Computer Software to
Be Sold, Leased, or Otherwise Marketed," has not had any material effect on the
Company's consolidated financial position or results of operations.

INCOME FROM SALE OF ACTIVITIES

         Income from the sale of activities of the Company has been recognized
as an income reduced by expenses related to the transactions.

FOREIGN CURRENCY TRANSLATION

         Gains and losses resulting from non-U.S. dollar transactions, and the
remeasurement of foreign currency balances and accounts denominated in
currencies other than the U.S. dollar, are included in the determination of net
income in the period in which they occur, in accordance with the requirements of
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation".

         Gains and losses resulting from translation of the Company's equity
investments into U.S. dollars are included in other comprehensive income.

INCOME TAXES

         The Company accounts for income taxes by the liability method, as
required by Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes".

ADVERTISING

         Costs associated with advertising the Company's products and services
are expensed as incurred. Advertising costs for the years ended December 31,
1997, 1998 and 1999 approximated $1,485,000, $2,553,000 and $1,545,000,
respectively.

DERIVATIVES AND HEDGING ACTIVITIES

         In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement requires the Company to recognize all derivatives on the balance sheet
at fair value. Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of the derivatives are either offset against
the change in fair value of assets, liabilities or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective proportion of a derivative's change in
fair value will be immediately recognized in earnings. The adoption of Statement
No. 133 on January 1,1999 had no effect on the net income or other comprehensive
income.


                                       44
<PAGE>   45

2. BUSINESS COMBINATIONS

         In June 1997, the Company consummated its acquisition of CrossComm
Corporation, a provider of ATM and multi-protocol router technology for
mission-critical SNA/Token-Ring environments. The consideration, which was a
combination of $47.6 million in cash, 2,537,423 Common Shares and 1,022,771
three-year warrants to purchase Common Shares, totalled approximately $96.0
million.

         The acquisition was accounted for as a purchase. Accordingly, the
results of operations of the acquired business and the fair market values of the
acquired assets and assumed liabilities were included in the Company's financial
statements as of the effective date. This accounting treatment resulted in
approximately $9.7 million of intangible assets that will be amortized over
their estimated period of benefit. Approximately $40.9 million of the
acquisition cost represented purchased in process research and development,
which was determined through known valuation techniques in the high-technology
communications industry and was immediately expensed in the period of
acquisition because technological feasibility had not been established and no
alternative commercial use had been identified.

         The following summary, prepared on a pro forma basis, combines the
results of operations as if CrossComm had been acquired as of the beginning of
the periods presented. The summary includes the impact of certain adjustments
such as goodwill amortization and estimated changes in interest income because
of cash outlays associated with the transaction and the related income tax
effect:

         The summary only includes 1997 as the impact on 1998 has already been
accounted for.

<TABLE>
<CAPTION>
                                                       DECEMBER 31,
                                                            1997
                                                            ----
                                                       (In thousands,
                                                 except per share amounts)
                                                         (Unaudited)
<S>                                              <C>
Net sales                                                 $ 283,025
Net income (loss)                                            18,832
Basic earnings (loss) per share                                1.11
Diluted earnings (loss) per share                              1.06
</TABLE>

         The pro forma results are not necessarily indicative of what actually
would have occurred if the acquisition had been in effect for all periods
presented. In addition, they are not intended to be a projection of future
results and do not reflect any synergies that might or might not be achieved
from the combined operations.

         In April 1999, the Company exercised a call option to acquire an
additional 31.9% interest in Digianswer A/S in which the Company already held a
35% interest. The acquisition was accounted for as a purchase at a cash
consideration of $2.3 million. The Company recorded goodwill of $1.6 million on
the acquisition. On October 26, 1999, the Company sold its 66.9% interest in
Digianswer A/S. The operations of Digianswer A/S were consolidated in the period
May 1 to October 30, 1999.

3. WARRANTS

         In connection with the acquisition of CrossComm Corporation, the
Company's shareholders approved the issuance of three-year warrants, each whole
warrant being the right to acquire a Common Share at a


                                       45
<PAGE>   46

price of $19.74 per each full Common Share. The holders of the remaining 922,388
outstanding warrants as of December 31, 1999, may exercise a warrant, at a price
of $19.74 per share, no later than June 12, 2000. In the event that all or any
part of the warrants are not exercised by June 12, 2000, then such warrants will
expire. The warrants are listed on the Nasdaq National Market (OLCWF).

4. INCOME TAXES

         Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and assets as of December
31, 1998 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                               1998            1999
                                                            ----------      ----------
                                                                  (In thousands)
<S>                                                         <C>             <C>
Deferred tax liabilities
   Tax over book depreciation                               $    1,373      $        0
   Other                                                           343             532
                                                            ----------      ----------
                                                                 1,716             532
                                                            ----------      ----------

Deferred tax assets
  Book over tax depreciation                                     2,314           2,271
  Allowance for uncollectible receivables                          316           3,071
  Inventory valuations                                           4,467          10,927
  Net operating losses carried forward (NOL)                    12,936          23,227
        Tax credit carryforwards                                 1,710           1,710
        Other accruals                                           2,546           6,501
                                                            ----------      ----------
Deferred tax assets, gross                                      24,289          47,707
                                                            ----------      ----------
Net deferred tax liabilities (assets) before
        valuation allowance                                 $  (22,573)     $  (47,175)
Valuation allowance                                         $   18,238      $   47,175
                                                            ----------      ----------
Net deferred tax liabilities (assets)                       $   (4,335)     $        0
                                                            ==========      ==========
</TABLE>


         As of December 31, 1999, the Company had approximately $56.8 million of
federal net operating loss carryover. Of this amount approximately $25 million
is subject to limitation under Section 382 of the Internal Revenue Code. In
addition, the Company has approximately $31.4 million of U.S. state net
operating loss carryover at December 31, 1999.

         The Company had approximately $1.2 million of U.S. research and
development credit carryover at December 31, 1999 subject to limitation under
Section 383 of the U.S. Internal Revenue Code.

         In addition, at December 31, 1999, the Company had approximately $7.3
million of Danish net operating loss carryover, which expires in 2003.

         The Company's valuation allowance is approximately $47.2 million
because it is more likely than not that the Company's net deferred tax assets
will not be realized.


                                       46
<PAGE>   47

         For financial reporting purposes, income before income taxes includes
the following components:

<TABLE>
<CAPTION>
                                                     1997            1998            1999
                                                  ----------      ----------      ----------
                                                                (In thousands)
<S>                                               <C>             <C>             <C>
Pretax income:
  Denmark                                         $  (31,813)     $  (23,242)     $  (42,125)
  United States                                       24,626            (284)        (32,866)
                                                  ----------      ----------      ----------
                                                  $   (7,187)     $  (23,526)     $  (74,991)
                                                  ==========      ==========      ==========
</TABLE>


Significant components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                                     1997            1998            1999
                                                  ----------      ----------      ----------
                                                                (In thousands)
<S>                                               <C>             <C>             <C>
Current:
  Denmark                                         $    1,090      $    2,769      $       90
  United States                                       10,579          (1,115)            205
                                                  ----------      ----------      ----------
                                                      11,669           1,654             295
                                                  ----------      ----------      ----------
Deferred:
  Denmark                                              1,312          (2,185)              0
  United States                                       (2,292)              0           4,361
                                                  ----------      ----------      ----------
                                                        (980)         (2,185)          4,361
                                                  ----------      ----------      ----------

                                                  $   10,689      $     (531)     $    4,656
                                                  ==========      ==========      ==========
</TABLE>


The reconciliation of income tax computed at the Danish statutory tax rates to
income tax expense is:

<TABLE>
<CAPTION>
                                       1997                    1998                    1999
                                     --------                --------                --------
                                                          (In thousands)
                                                        %                       %                       %
<S>                                  <C>              <C>    <C>              <C>    <C>              <C>
Danish tax                           $ (2,444)        (34)   $ (7,999)        (34)   $(24,208)        (32)
Goodwill amortization                     411           6       2,003           9         284           0
Valuation allowance
  on increase in deferred tax               0           0       3,337          15      28,937          39
  Hereof expensed                           0           0           0           0      (4,335)         (5)
Acquisition-related expenses           12,827         179           0           0           0           0
Use of NOL's                                0           0           0           0       1,840           1
Benefit of foreign tax relief            (112)         (2)          0           0         379           0
United States taxes net of credits          0           0        (304)         (1)        513           1
Adjustments prior years                     0           0       2,496          11       1,152           2
Other net                                   7           0         (64)          0          94           0
                                     --------    --------    --------    --------    --------    --------

                                     $ 10,689         149    $   (531)          0    $  4,656           6
                                     ========    ========    ========    ========    ========    ========
</TABLE>

                                       47
<PAGE>   48

         Undistributed earnings of the Company's United States subsidiaries
amounted to $41.5 million in 1999. Those earnings are considered to be
indefinitely reinvested. Upon distribution of those earnings in the form of
dividends, the amount thereof would be subject only to withholding tax at a rate
of 5% in accordance with the provisions of the Denmark/United States double tax
treaty.

5. SPECIAL CHARGES AND RESTRUCTURING CHARGES

         On September 9, 1998, the Company announced plans to discontinue its
U.S. based Research and Development activities and to consolidate all such
activities in Denmark and Poland. Also, the Company expanded its professional
service relationship with Vital Network Services. Vital has according to the
agreement assumed responsibility for certain of the Company's professional
services. As part of the agreement Vital purchased the resources and assets of
Olicom's North American professional service operations. The actions were part
of a global consolidation, which resulted in the release of approximately 50
employees in Administrative functions, Marketing, Research & Development and
Operations. As a consequence of these actions the Company has recorded special
charges of approximately $1 million, related to inventory write-offs, and
restructuring charges of $2.3 million, primarily related to staff reductions and
fixed asset write-offs.

         On November 30, 1998, the Company announced its strategy for 1999 and
forward. This included a major corporate restructuring in the fourth quarter of
1998. The restructuring included a staff reduction of approximately 20 percent,
the closing of some offices and discontinuation of certain of products. The
Company recorded special charges of $2.5 million in connection with the
restructuring, related primarily to discontinued product write-offs.
Furthermore, restructuring charges of $5 million were recorded, primarily
related to the staff reduction and fixed asset write-offs.

         The total restructuring charges and special charges are specified as
follows:

<TABLE>
<CAPTION>
                                                                 Accrued
                                          Total expenses   Dec. 31, 1998
                                          --------------   --------------
                                                  (In thousands)
<S>                                       <C>              <C>
 Employee expenses                        $        3,939   $        1,207
 Other expenses                                    3,388            2,727
                                          --------------   --------------

 Restructuring charges                             7,327            3,934
 Special charges related to inventories            3,463            1,001
                                          --------------   --------------

                                          $       10,790   $        4,935
                                          ==============   ==============
</TABLE>


         All amounts accrued at December 31, 1998, have been paid during 1999.

         As a consequence of the sale of the Company's main activities, Olicom
has had very large restructuring charges and special charges in 1999. The
restructuring charges amounted to $36.7 million, while special charges totalled
$33.7 million.

         The restructuring charges related to employee expenses of $7.1 million,
mainly salaries and bonus, while $29.6 million related to other expenses, such
as write-downs on fixed assets, write-down on the goodwill in CrossComm,
extraordinary write-down for bad debts, external assistance and facilities.


                                       48
<PAGE>   49

         In 1999 the accruals amounted to $8.7 million regarding restructuring
charges and $31.7 million regarding special charges related to inventories.

         The total restructuring charges and special charges are specified as
follows:

<TABLE>
<CAPTION>
                                                                  Accrued
                                          Total expenses    Dec. 31, 1999
                                          --------------   --------------
                                                  (In thousands)
<S>                                       <C>              <C>
 Employee expenses                        $        7,091   $        3,091
 Other expenses                                   29,604            5,589
                                          --------------   --------------

 Restructuring charges                            36,695            8,680
 Special charges related to inventories           33,737           31,676
                                          --------------   --------------

                                          $       70,432   $       40,356
                                          ==============   ==============
</TABLE>

         Employees terminated during 1999 in connection with the reorganization
were distributed as follows:

<TABLE>
<S>                                                          <C>
              Operations                                         47
              Sales and marketing                               162
              Research and development                          194
              General and administrative                         48
                                                              -----

              Total number of employees terminated              451
                                                              =====
</TABLE>

         The figures include the employees transferred to Madge or Intel, which
amount to approximately 241 employees.

6. EMPLOYEE STOCK OPTION PLANS

         The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123, "Accounting for Stock-Based Compensation", requires use of
option valuation models that were not developed for use in valuing employee
stock options and warrants. Under APB 25, because the exercise price of the
Company's employee stock options equals or exceeds the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

1994, 1996 AND 1997 SHARE INCENTIVE PLANS

         The Company's 1994, 1996 and 1997 Share Incentive Plans have authorized
the grant of options to directors, executives and key employees for up to
425,000, 1,000,000 and 2,000,000 shares, respectively, of the Company's common
stock. The majority of options granted have 5 year terms and vest and become
fully exercisable at the end of 4 years of continued employment.


                                       49
<PAGE>   50


CROSSCOMM STOCK OPTIONS EXCHANGED FOR OLICOM STOCK OPTIONS

         At the acquisition of CrossComm approximately 1,500,000 CrossComm stock
options were exchanged for 905,511 Olicom stock options ("CrossComm options"),
with comparable exercise prices and terms.

PRO FORMA INFORMATION

         Pro forma information regarding net income and earnings per share is
required by Statement 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1997, 1998 and 1999: risk-free interest rates of 6.5%; dividend
yields of 0%; volatility factors of the expected market price of the Company's
common stock of 0.4, 0.4 and 1.188, respectively; 25% of these options granted
are expected to expire without being exercised; and weighted-average expected
life of the options of 5 years.

         The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of fair value of its employee stock options.

         For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

<TABLE>
<CAPTION>
                                                  1997            1998            1999
                                              ------------    ------------    ------------
                                               (In thousands, except earnings per share)
<S>                                           <C>             <C>             <C>
Net income (loss) - as reported               $    (18,121)   $    (22,939)   $    (80,307)
Net income (loss) - pro forma                 $    (20,307)   $    (25,792)   $    (83,660)
Basic and diluted earnings (loss) per share
         - as reported                        $      (1.15)   $      (1.28)   $      (4.50)
Basic and diluted earnings (loss) per share
         - pro forma                          $      (1.28)   $      (1.44)   $      (4.68)
</TABLE>

SUMMARY OF STOCK OPTION ACTIVITY

         On December 10, 1998, the exercise prices of 482,300 outstanding
options issued in March 1998 (314,500 options) and August 1998 (167,800 options)
were reset with reference to the then prevailing market price for the Company's
Common Shares. The original exercise prices for the options reset were $26.25
and $19.50, respectively. The new exercise price for these options is $10.00.
The market price for the Company's Common Shares at the date of the reset was
$5.25.

         A summary of the Company's stock option activity, and related
information for the three years ended December 31, 1999, follows:


                                       50
<PAGE>   51

<TABLE>
<CAPTION>
                                       Outstanding      Exercisable       Weighted-average   Weighted-average
                                       number  of       number of             exercise        fair value of
                                         options          options               price         option granted
                                       ----------       ---------          --------------     --------------
<S>                                  <C>              <C>                <C>                 <C>
      January 1, 1997                    665,725          77,875                10.74

      CrossComm options                  905,511                                10.52
      Granted                            710,200                                14.79             $ 6.36
      Exercised                         (589,794)                                9.98
      Expired                           (170,814)                               16,87
                                     -----------                           ----------
      December 31, 1997                1,520,828         326,699                12.11

      Granted                          1,001,605                                12.24             $ 7.99
      Exercised                         (608,910)                               12.89
      Expired                           (246,349)                               15.48
                                     ------------                          ----------
      December 31, 1998                1,667,174         425,960              $ 11.53

      Granted                            483,400                                 3.98             $ 2.42
      Exercised                                0                                    0
      Expired                         (1,599,833)                                9.89
                                     ------------                          ----------
      December 31, 1999                  550,741         182,119           $     9.67
                                     ===========      ==========           ==========
</TABLE>

The following table summarizes the status of the Company's stock options
outstanding and exercisable at December 31, 1999:

<TABLE>
<CAPTION>
                                   Outstanding    Weighted-average   Weighted-average   Exercisable  Weighted-average
      Range of                     number of         remaining           exercise         number of       exercise
      Exercise Prices                shares       contractual life         price           shares         price
      ---------------              ----------------------------------------------       -----------------------------
<S>                               <C>             <C>                  <C>              <C>           <C>
      $  3.35 - $  6.00              176,500         2.37 years           $ 4.28           11,250        $ 5.31
      $  8.40 - $  9.00               49,421         6.49 years           $ 8.43           49,273        $ 8.43
      $  9.00 - $ 12.00              239,082         2.54 years           $10.13           84,795        $10.26
      $ 14.00 - $ 17.00               51,738         1.89 years           $14.07           26,301        $14.07
      $ 26.25 - $ 30.25               34,000         2.71 years           $29.58           10,500        $29.71
                                   ---------                                            ---------
                                     550,741                                              182,119
</TABLE>

7. EMPLOYEE BENEFIT PLANS

         The Company's subsidiaries in the U.S. have a 401(k) Plan. The Plan has
been in place since May 1, 1993. Effective January 1, 1997, the Plan allows for
both the Company and eligible employees to contribute. All employees over 21
years of age are eligible to participate. The Company's contribution equals 50%
of an employee's contribution that does not exceed 6% of compensation. The
Company's contribution expenses for 1997, 1998 and 1999, were $255,759, $398,106
and $ 98,961, respectively. The plan was terminated at the end of December 1999.

         The Company does not provide its employees with other post-retirement
and post-employment benefits.

8. LEASE COMMITMENTS

         The Company leases its headquarters and main warehouse facility under
noncancellable operating leases which expire during the period from 2006 to
2008. The leases contain escalation clauses. Additionally, the


                                       51
<PAGE>   52

Company and its subsidiaries are lessees in other noncancellable lease
arrangements for office buildings and warehouses, expiring on different dates.

      The total future minimum lease payments under the foregoing leases at
December 31, 1999, are:

<TABLE>
<CAPTION>
                                Headquarters        Other         Total
                              -----------------------------------------
                                            (In thousands)
<S>                                 <C>          <C>           <C>
              2000                     1,483        1,638         3,121
              2001                     1,410        1,562         2,972
              2002                     1,445        1,617         3,062
              2003                     1,305          973         2,278
              2004                     1,338        1,036         2,374
              Remaining                3,423        4,860         8,283
                              -----------------------------------------

                                    $ 10,404     $ 11,686      $ 22,090
                              =========================================
</TABLE>


         Total lease amounts charged to expense are $3,594,000 in 1997 and
$4,018,000 in 1998 and $3,470,000 in 1999.

         The Company has subleased most of these leased premises to Intel. Intel
has provided Olicom with a guarantee corresponding to the obligation Olicom has
to the landlord. The net lease commitments adjusted for this amount to
$1,219,000.

9. SEGMENT INFORMATION

         The Company operated in 1997, 1998 and 1999 in the data networking
industry, primarily within the following technologies: Asynchronous Transfer
Mode, Token-Ring and Fast Ethernet. The Company considers its products being one
group of similar products.

         The Company manages its business primarily in two separate geographical
areas: Americas, incorporating North and South America, and International,
incorporating Europe and Asia Pacific.

         Information about the Company's operations by reportable segments is as
follows:


                                       52

<PAGE>   53


<TABLE>
<CAPTION>
                                                 INTER-                       ELIMI-        CONSO-
                                                 NATIONAL      AMERICAS      NATIONS       LIDATED
                                                ----------    ----------    ----------    ----------
                                                                   (In thousands)
<S>                                             <C>           <C>           <C>           <C>
1999
Net sales:
External customers                              $   57,971    $   13,320    $        0    $   71,291
Intercompany                                        17,277        22,861       (40,138)            0
                                                ----------    ----------    ----------    ----------

Total                                           $   75,248    $   36,181    $  (40,138)   $   71,291
                                                ==========    ==========    ==========    ==========

Depreciation, amortization and write-off        $   19,115    $    3,879    $        0    $   22,994
                                                ==========    ==========    ==========    ==========

Operating income (loss)                         $  (94,105)   $  (36,614)   $    2,972    $ (127,747)
                                                ==========    ==========    ==========    ==========

Investments in affiliated companies             $        0    $        0    $        0    $        0
                                                ==========    ==========    ==========    ==========
Total current assets                            $   42,452    $   55,314    $  (49,858)   $   47,908
                                                ==========    ==========    ==========    ==========
Long-lived assets                               $      530    $       30    $        0    $      560
                                                ==========    ==========    ==========    ==========


1998
Net sales:
External customers                              $  121,613    $  105,989    $        0    $  227,602
Intercompany                                        76,931        10,471       (87,402)            0
                                                ----------    ----------    ----------    ----------

Total                                           $  198,544    $  116,460    $  (87,402)   $  227,602
                                                ==========    ==========    ==========    ==========

Depreciation and amortization                   $    6,937    $    1,963    $        0    $    8,900
                                                ==========    ==========    ==========    ==========

Operating income (loss)                         $  (21,081)   $   (3,447)   $   (1,781)   $  (26,309)
                                                ==========    ==========    ==========    ==========

Investments in affiliated companies             $      958    $        0    $        0    $      958
                                                ==========    ==========    ==========    ==========
Total current assets                            $   80,004    $   84,313    $  (42,881)   $  121,436
                                                ==========    ==========    ==========    ==========
Long-lived assets                               $   13,123    $    6,327    $        0    $   19,450
                                                ==========    ==========    ==========    ==========

1997
Net sales:
External customers                              $  125,960    $  112,269    $        0    $  238,229
Intercompany                                        63,128         6,076       (69,204)            0
                                                ----------    ----------    ----------    ----------

Total                                           $  189,088    $  118,345    $  (69,204)   $  238,229
                                                ==========    ==========    ==========    ==========

Depreciation and amortization                   $    4,889    $    1,327    $        0    $    6,216
                                                ==========    ==========    ==========    ==========

Operating income (loss)                         $  (30,181)   $   22,955    $   (1,191)   $   (8,417)
                                                ==========    ==========    ==========    ==========

Investments in affiliated companies             $      733    $        0    $        0    $      733
                                                ==========    ==========    ==========    ==========
Total current assets                            $  121,157    $   57,397    $  (42,156)   $  136,398
                                                ==========    ==========    ==========    ==========
Long-lived assets                               $   12,543    $    3,485    $        0    $   16,028
                                                ==========    ==========    ==========    ==========
</TABLE>


                                       53
<PAGE>   54

         In the year 1997, sales to a single customer exceeded 10% of sales,
amounting to $ 24.7. In the year 1998, sales to one customer exceeded 10% of
sales, amounting to $37.1 million. In the year 1999, sales to one customer
exceeded 10% of sales, amounting to $11.0 million

11. FINANCIAL INSTRUMENTS

A. FAIR VALUE OF FINANCIAL INSTRUMENTS

         The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

                  Cash and cash equivalents: The carrying amount reported in the
         balance sheet for cash and cash equivalents approximates its fair
         value.

                  Short-term investments: The fair values for short-term
         investments are based on quoted market prices.

                  Foreign currency exchange contracts: The fair value of the
         Company's foreign currency exchange contracts are based on quoted
         market prices.

The carrying amounts and fair values of the Company's financial instruments at
December 31, 1998 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                         1998                             1999
                                               ------------------------          ---------------------
                                                Carrying          Fair           Carrying        Fair
                                                 amount           value           amount         value
                                               ------------------------          ---------------------
                                                                     (In thousands)
<S>                                               <C>            <C>             <C>            <C>
    Cash and cash equivalents                     $ 22,494       $ 22,494        $ 28,327       $ 28,327
    Restricted cash                                      0              0           8,844          8,844
    Foreign currency exchange contract                   0          1,251            (387)          (387)
</TABLE>

B. OFF-BALANCE SHEET RISK

         The Company enters into forward currency exchange contracts and options
to hedge foreign currency transactions on a continuing basis for periods
consistent with its foreign currency exposures. The objective of this practice
is to reduce the impact of foreign exchange movements on the Company's operating
results. The Company's hedging activities do not create exchange rate risk
because gains and losses on these contracts generally offset losses and gains on
the assets, liabilities and transactions being hedged.

         At December 31, 1998 and 1999 the stated or notional amounts of the
Company's forward currency exchange contracts amounted to $21.4 million and $4.5
million, respectively.

C. CONCENTRATIONS OF CREDIT RISK

         The Company's financial instruments that are exposed to concentrations
of credit risk consist primarily of cash and cash equivalents, short-term
investments and accounts receivable.


                                       54
<PAGE>   55

         Cash is maintained with major banks in Denmark and the United States.
Foreign currency exchange contracts and options are entered into with a major
bank in Denmark.

         The Company markets its products principally to distributors, value
added resellers and original equipment manufacturers in the computer industry.

         Concentrations of credit risk with respect to accounts receivable from
customers located outside Denmark are limited under the terms of an agreement
entered into with the company "EKR CreditInsurance A/S". This agreement
guarantees up to 90% of the amount of the related receivables. The amounts so
covered at December 31, 1998 and 1999 were $18,728,000 and $2,817,991,
respectively.

12. LITIGATION

         From time to time, the Company is involved in litigation relating to
claims arising out of its operations in the normal course of business. As of
December 31, 1999, the Company is not a party to any legal proceedings, the
adverse outcome of which, in management's opinion, would have a material adverse
effect on the Company's results of operations or financial position.


ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS.

         (a) The following consolidated financial statements are filed as part
of this Annual Report:

<TABLE>
<CAPTION>
                                                                    Page no
                                                                    -------
<S>                                                                 <C>
1.  Consolidated Financial Statements
    Report of Independent Auditors                                     34
    Consolidated Balance Sheets at December 31, 1998 and 1999          35
    Consolidated Statements of Income for the years
         ended December 31, 1997, 1998 and 1999                        37
    Consolidated Statements of Comprehensive Income for the years
         ended December 31, 1997, 1998 and 1999                        38
    Consolidated Statements of Shareholders' Equity for the years
         ended December 31, 1997, 1998 and 1999                        39
    Consolidated Statements of Cash Flows for the years
         ended December 31, 1997, 1998 and 1999                        40
    Notes to Consolidated Financial Statements                         42
</TABLE>

         All other supplementary schedules relating to the Company are omitted
because they are not required or because the required information, where
material, is contained in the Consolidated Financial Statements or Notes
thereto.

         (b) The following exhibits are filed as part of this Annual Report:


                                       55
<PAGE>   56


<TABLE>
<CAPTION>
   Exhibit
   Number                   Description of Exhibits
   ------                   -----------------------
<S>          <C>
    1.1  --  Articles of Association of the Company, as amended (1).

    1.2  --  Rules of Procedure for the Board of Directors (2).

    2.1  --  1994 Share Incentive Plan, as amended (3).

    2.2  --  1996 Share Incentive Plan (4).

    2.3  --  1997 Share Incentive Plan (4).

    3.1  --  Agreement of Substitution (License Agreement) dated as of
             September 1, 1990, between Willemijn Houdstermaatschappij BV
             and the Company (5).+

    3.2  --  Form of Indemnification Agreement between the Company
             and/or Olicom, Inc.) and Jan Bech, Bo Vilstrup, Frank G. Petersen,
             Michael Peytz, S0ren Bjerre-Nielsen, J0rgen H0g, Niels Christian
             Furu, Lars Larsen and Mette R.L. Fogt (5).

    3.3  --  Trademark Agreement effective as of December 11, 1998, between
             the Company and Ing. C. Olivetti & C., S.p.A. (6)

    3.4  --  License Agreement dated October 19, 1988, between the Company
             and Texas Instruments France, as amended by Amendment to
             License Agreement dated November 29, 1989, together with
             Texas Instruments Program License Agreement dated October 11,
             1989, between the Company and Texas Instruments A/S,
             Amendment to License Agreements dated October 6, 1992,
             between the Company and Texas Instruments France, and
             Amendment to License Agreement(s) dated January 1, 1992,
             between the Company and Texas Instruments Trade Corporation (5).+

    3.5  --  Share Purchase Agreement dated January 23, 1996, between the Company
             and Nilex Systems ApS.(1).
</TABLE>

                                       56

<PAGE>   57


<TABLE>
<S>          <C>
    3.6  --  Agreement and Plan of Reorganization dated as of March
             20, 1997, among the Company, PW Acquisition Corporation and
             CrossComm Corporation (1).

    3.7  --  Agreement re sale of shareholding in Lasat. (6)

    3.8  --  Agreement for the Sale and Purchase of assets relating to
             Olicom's Token Ring Business made on August 31, 1999,
             between the Company and Madge Networks NV.

    3.9  --  Umbrella Agreement relating to the Purchase and Sale of Certain
             businesses and assets made on September 30, 1999, between the
             Company, Intel Corporation and Olicom Poland Sp. Z O.O.

    3.10 --  Stock Purchase Agreement dated October 26, 1999, by and
             among the Company, Olicom Ventures A/S and Motorola, Inc.
</TABLE>


   -------------

         (1)      Incorporated herein by reference to the Company's registration
                  statement on Form F-4, registration no. 333-24655.

         (2)      Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1997, file no. 0-20738.

         (3)      Incorporated herein by reference to the Company's registration
                  statement on Form S-8, registration no. 33-93684.

         (4)      Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1996, file no. 0-20738.

         (5)      Incorporated herein by reference to the Company's registration
                  statement on Form F-1, registration no. 33-51818.

         (6)      Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1999, file no. 0-20738.

         +        Confidential treatment granted as to portions thereof.


                                       57

<PAGE>   58


                                   SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                                     OLICOM A/S


                                     By:   /s/ Niels Christian Furu
                                           ----------------------------
                                           Niels Christian Furu
                                           President and Chief Executive Officer


February 25, 2000



                                       58

<PAGE>   59


                               INDEX TO EXHIBITS



<TABLE>
<CAPTION>
   Exhibit
   Number                   Description of Exhibits
   ------                   -----------------------
<S>          <C>
    1.1  --  Articles of Association of the Company, as amended (1).

    1.2  --  Rules of Procedure for the Board of Directors (2).

    2.1  --  1994 Share Incentive Plan, as amended (3).

    2.2  --  1996 Share Incentive Plan (4).

    2.3  --  1997 Share Incentive Plan (4).

    3.1  --  Agreement of Substitution (License Agreement) dated as of
             September 1, 1990, between Willemijn Houdstermaatschappij BV
             and the Company (5).+

    3.2  --  Form of Indemnification Agreement between the Company
             and/or Olicom, Inc.) and Jan Bech, Bo Vilstrup, Frank G. Petersen,
             Michael Peytz, S0ren Bjerre-Nielsen, J0rgen H0g, Niels Christian
             Furu, Lars Larsen and Mette R.L. Fogt (5).

    3.3  --  Trademark Agreement effective as of December 11, 1998, between
             the Company and Ing. C. Olivetti & C., S.p.A. (6)

    3.4  --  License Agreement dated October 19, 1988, between the Company
             and Texas Instruments France, as amended by Amendment to
             License Agreement dated November 29, 1989, together with
             Texas Instruments Program License Agreement dated October 11,
             1989, between the Company and Texas Instruments A/S,
             Amendment to License Agreements dated October 6, 1992,
             between the Company and Texas Instruments France, and
             Amendment to License Agreement(s) dated January 1, 1992,
             between the Company and Texas Instruments Trade Corporation (5).+

    3.5  --  Share Purchase Agreement dated January 23, 1996, between the Company
             and Nilex Systems ApS.(1).
</TABLE>


<PAGE>   60


<TABLE>
<S>          <C>
    3.6  --  Agreement and Plan of Reorganization dated as of March
             20, 1997, among the Company, PW Acquisition Corporation and
             CrossComm Corporation (1).

    3.7  --  Agreement re sale of shareholding in Lasat. (6)

    3.8  --  Agreement for the Sale and Purchase of assets relating to
             Olicom's Token Ring Business made on August 31, 1999,
             between the Company and Madge Networks NV.

    3.9  --  Umbrella Agreement relating to the Purchase and Sale of Certain
             businesses and assets made on September 30, 1999, between the
             Company, Intel Corporation and Olicom Poland Sp. Z O.O.

    3.10 --  Stock Purchase Agreement dated October 26, 1999, by and
             among the Company, Olicom Ventures A/S and Motorola, Inc.
</TABLE>

-------------

(1)  Incorporated herein by reference to the Company's registration statement on
     Form F-4, registration no. 333-24655.

(2)  Incorporated herein by reference to the Company's Annual Report on Form
     20-F for the fiscal year ended December 31, 1997, file no. 0-20738.

(3)  Incorporated herein by reference to the Company's registration
     statement on Form S-8, registration no. 33-93684.

(4)  Incorporated herein by reference to the Company's Annual Report on Form
     20-F for the fiscal year ended December 31, 1996, file no. 0-20738.

(5)  Incorporated herein by reference to the Company's registration statement
     on Form F-1, registration no. 33-51818.

(6)  Incorporated herein by reference to the Company's Annual Report on Form
     20-F for the fiscal year ended December 31, 1999, file no. 0-02738.

 +   Confidential treatment granted as to portions thereof.