<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q


              Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                      For the Quarter Ended March 31, 1997

                         Commission File Number 0-20110


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


DELAWARE                                                    52-1513201
--------                                                    ----------
(State or other jurisdiction                                (I.R.S. Employer
  of incorporation or organization)                         I.D. No.)

450 DONALD LYNCH BOULEVARD, MARLBOROUGH, MASSACHUSETTS      01752
------------------------------------------------------      -----
(Address of principal executive office)                     (Zip Code)

(508)-481-4060
--------------
(Registrant's telephone number, including area code)


Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES X No
                                      ---  ---                  

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

            CLASS                                  OUTSTANDING AT MAY 5, 1997
            -----                                  --------------------------

   Common stock, $.01 par value                            9,347,502 shares


                                  Page 1 of 17

<PAGE>   2

                    CROSSCOMM CORPORATION QUARTERLY REPORT ON
                  FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997

                                      INDEX




PART I    FINANCIAL INFORMATION:

ITEM 1.   Financial Statements:
          Condensed Consolidated Balance Sheets as of March 31, 1997 and 
               December 31, 1996 
          Condensed Consolidated Statements of Operations for the three months 
               ended March 31, 1997 and March 31, 1996 
          Condensed Consolidated Statement of Stockholders' Equity for the three
               months ended March 31, 1997 
          Condensed Consolidated Statements of Cash Flows for the three months
               ended March 31, 1997 and March 31, 1996 
          Notes to Condensed Consolidated Financial Statements

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

PART II   OTHER INFORMATION

ITEM 1.   Legal Proceedings

ITEM 2.   Changes in Securities

ITEM 3.   Defaults upon Senior Securities

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

ITEM 5.   Other Information

ITEM 6.   Exhibits and Reports on Form 8-K

          Signatures




                                        2
<PAGE>   3
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                              CROSSCOMM CORPORATION
<TABLE>
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<CAPTION>

                                                                                       March 31,           December 31,
                                                                                         1997                  1996
                                                                                      (Unaudited)               (*)
                                                                                   ------------------    ------------------

<S>                                                                                      <C>                <C>     
                                                          ASSETS
Current assets:
   Cash and cash equivalents                                                             $  8,965           $  6,461
   Available-for-sale securities                                                           34,132             37,279
   Accounts receivable, net                                                                 9,209              8,277
   Inventories, net                                                                         5,171              5,473
   Prepaid expenses and other current assets                                                1,904              1,702
                                                                                         --------           --------

        Total current assets                                                               59,381             59,192

Equipment and leasehold improvements, net of accumulated depreciation of
  $14,859 at  March 31, 1997 and $14,449 at December 31, 1996                               5,077              5,463
Other assets, net                                                                           1,994              2,204
                                                                                         --------           --------

         Total assets                                                                    $ 66,452           $ 66,859
                                                                                         ========           ========


                                           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                      $  3,155           $  3,537
   Accrued liabilities                                                                      5,637              5,621
   Deferred revenue                                                                         4,630              3,339
                                                                                         --------           --------

        Total current liabilities                                                          13,422             12,497


Stockholders' equity:
   Preferred stock, $.01 par value, 4,000,000 shares authorized, none
      issued or outstanding at March 31, 1997 or December 31, 1996                              -                  -
   Common stock, $.01 par value, 20,000,000 shares authorized,
      9,302,285 shares issued and outstanding at March 31, 1997 and
      9,236,132 shares issued and outstanding at December 31, 1996                             93                 92
   Paid-in capital in excess of par value                                                  72,984             72,534
   Retained earnings (accumulated deficit)                                                (21,091)           (21,449)
   Unrealized gain (loss) on available-for-sale securities                                  1,044              3,185
                                                                                         --------           --------
        Total stockholders' equity                                                         53,030             54,362
                                                                                         --------           --------

        Total liabilities and stockholders' equity                                       $ 66,452           $ 66,859
                                                                                         ========           ========

* Condensed from audited financial statements
</TABLE>

                            See accompanying notes.
                                       3

<PAGE>   4
                              CROSSCOMM CORPORATION
<TABLE>
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, except earnings (loss) per share)
                                   (Unaudited)

<CAPTION>

                                                    Three Months Ended
                                                         March 31,
                                                ---------------------------
                                                  1997               1996
                                                --------           --------

<S>                                             <C>                <C>     
Revenues:

     Product                                    $  8,988           $  8,029
     Service                                       2,815              2,629
                                                --------           --------

Total revenues                                    11,803             10,658

Cost of revenues:

     Cost of goods sold                            4,015              4,303
     Cost of services                              1,506              1,382
                                                --------           --------

Total cost of revenues                             5,521              5,685
                                                --------           --------


Gross profit                                       6,282              4,973

Operating expenses:

     Selling, general & administrative             4,108              4,614
     Research and development                      1,835              2,448
     Other charges                                   356                  -
                                                --------           --------

Total operating expenses                           6,299              7,062
                                                --------           --------

Income (loss) from operations                        (17)            (2,089)

Interest income, net                                 458                538
Other income (expense)                               (83)               (43)
                                                --------           --------
Income (loss) before provision
   for income taxes                                  358             (1,594)

Provision for income taxes                             -                  -
                                                --------           --------

Net income (loss)                               $    358           $ (1,594)
                                                ========           ========

Earnings (loss) per share                       $   0.04           $  (0.17)
                                                ========           ========

Shares used in computing earnings
   (loss) per share                                9,860              9,151
                                                ========           ========
</TABLE>

                            See accompanying notes.
                                       4
<PAGE>   5



                              CROSSCOMM CORPORATION
<TABLE>
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        (in thousands, except share data)


<CAPTION>

                                                                                                         Unrealized
                                                                              Paid-in      Retained      Gain (Loss)
                                                          Common Stock       Capital in     Earnings    on Available-     Total  
                                                       ------------------    Excess of    (Accumulated    for-Sale     Stockholders'
                                                       Shares      Amount    Par Value       Deficit)    Securities       Equity
                                                       ---------------------------------------------------------------------------


<S>                                                    <C>           <C>       <C>           <C>           <C>            <C>    
Balance, December 31, 1996 (audited)                   9,236,132     $92       $72,534       ($21,449)     $3,185         $54,362

Adjustment to unrealized gain (loss) on available-
  for-sale securities (unaudited)                              -       -             -              -      (2,141)         (2,141)

Issuance of common stock under stock
  option and stock purchase plans (unaudited)             66,153       1           450              -           -             451

Net income (loss) (unaudited)                                  -       -             -            358           -             358
                                                       ---------     ---       -------       --------      ------         -------

Balance, March 31, 1997 (unaudited)                    9,302,285     $93       $72,984       ($21,091)     $1,044         $53,030
                                                       =========     ===       =======       ========      ======         =======
</TABLE>

                             See accompanying notes.
                                       5

<PAGE>   6

                              CROSSCOMM CORPORATION
<TABLE>
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)

<CAPTION>

                                                                  Three Months Ended
                                                              ----------------------------
                                                              March 31,           March 31,
                                                                1997                1996
                                                               -------            --------

<S>                                                            <C>                 <C>     
OPERATING ACTIVITIES
Net cash provided (used) by operating activities               $ 1,335             ($2,562)

INVESTING ACTIVITIES
Acquisitions of fixed assets                                      (182)               (854)
Purchases of available-for-sale securities                      (5,001)            (11,989)
Sales and maturities of available-for-sale securities            6,000              16,446
Additions to other assets                                           11                (408)
                                                               -------            --------

Net cash provided (used) by investing activities                   828               3,195

FINANCING ACTIVITIES
Proceeds from employee stock plans                                 341                  30
                                                               -------            --------

Net cash provided by financing activities                          341                  30
                                                               -------            --------

Net increase (decrease) in cash and cash equivalents             2,504                 663
Cash and cash equivalents at beginning of period                 6,461               2,244
                                                               -------            --------

Cash and cash equivalents at end of period                     $ 8,965            $  2,907
                                                               =======            ========
</TABLE>


                            See accompanying notes.
                                       6
<PAGE>   7

                              CROSSCOMM CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1)   BASIS OF PRESENTATION

The condensed consolidated financial statements presented have been prepared by
the Company without audit but, in the opinion of management, reflect all
adjustments of a normal recurring nature necessary for a fair statement of the
interim periods presented. The results of operations for the interim periods
shown on this report are not necessarily indicative of results for any future
interim period or for the entire year. Certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been omitted,
although the Company believes that the disclosures included are adequate to make
the information presented not misleading. The condensed consolidated financial
statements and the notes included herein should be read in conjunction with the
financial statements and notes for the year ended December 31, 1996, included in
the Company's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission.


2)   ACCOUNTING CHANGES

In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. The impact of Statement No. 128 on the
calculation of primary and fully diluted earnings per share for the quarters
ended March 31, 1997 and 1996 is not material.

3)   AVAILABLE-FOR-SALE SECURITIES

Available-for-sale securities generally consist principally of U.S. Government
obligations maturing within one to three years. The Company considers these
investments, which represent funds available for current operations, an integral
component of its cash management activities. Management determines the
appropriate classification of debt securities at the time of purchase and
reevaluates such designation on an ongoing basis. Available-for-sale securities
also include certain restricted equity securities of Fore Systems, Inc. (Fore),
received upon Fore's acquisition of an entity in which the Company held a
minority equity interest. These securities, although not salable until June
1997, are considered available-for-sale pursuant to Financial Accounting
Standard No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," and are accounted for as such.


                                       7
<PAGE>   8


<TABLE>

Available-for-sale securities consist of the following as of March 31, 1997:

<CAPTION>

                                                      Gross           Gross          Estimated
                                                    Unrealized     Unrealized          Fair
                                      Cost            Gains           Losses           Value
                                   ------------------------------------------------------------

<S>                                <C>             <C>             <C>              <C>        
U.S. Government and government
     agency obligations            $32,447,000     $    20,000     $(110,000)       $32,357,000
Equity securities                      641,000       1,134,000             -          1,775,000
                                   -----------     -----------     ---------        -----------
Totals                             $33,088,000     $ 1,154,000     $(110,000)       $34,132,000
                                   ===========     ===========     =========        ===========
</TABLE>

Realized gains and losses were not material for the three month periods ending
March 31, 1997 and 1996. The net adjustment to the unrealized gain (loss)
included as a separate component of stockholders' equity served to decrease
equity by $2,141,000 for the quarter ended March 31, 1997. This was primarily
due to the market value of Fore common stock decreasing during the quarter.


4)   CONCENTRATION OF CREDIT

The Company operates in a single industry segment encompassing the development,
manufacture, marketing and support of advanced networking products. Accordingly,
the Company's customers include distributors and resellers of high technology
equipment, along with the end users of such equipment. The Company performs
periodic credit evaluations of its customers' financial condition and extends
trade credit to its customers under normal terms.

For the quarter ended March 31, 1997 revenues attributable to one customer were
approximately 19% of the total revenue. The amount due from this customer
approximated $1,633,000.


5)   INVENTORIES

<TABLE>
Inventories are valued at the lower of cost (first in, first out) or market and
consist of the following, net of reserves:

<CAPTION>
                                         March 31, 1997         December 31, 1996
                                         --------------         -----------------

         <S>                                <C>                     <C>       
         Raw Materials                      $1,373,000              $1,254,000
         Work-in-Process                     1,364,000               1,628,000
         Finished Goods                      2,434,000               2,591,000
                                            ----------              ----------
                                            $5,171,000              $5,473,000
                                            ==========              ==========

</TABLE>

                                       8

<PAGE>   9

6)   MERGER WITH OLICOM A/S


On March 20, 1997, the Company entered into an Agreement and Plan of
Reorganization with Olicom A/S ("the Merger Agreement"). Upon the effectiveness
of the merger, each share of CrossComm common stock will be exchanged for $5.00
in cash, 0.2667 shares of Olicom common stock (the "Exchange Ratio") and 3-year
warrants to purchase 0.1075 shares of Olicom common stock at an exercise price
of $19.74 per whole share. However, (i) in the event the average of the high and
low sales price for Olicom common stock for the ten trading days immediately
preceding (but excluding) the fifth trading day before the meeting of the
CrossComm stockholders held for the purpose of considering the merger, as
reported on the Nasdaq National Market (the "Final Closing Price") is less than
$12.50, Olicom will have the right to increase the Exchange Ratio to the number
which, when multiplied by the Final Closing Price, equals $3.33 (and if Olicom
does not so increase the Exchange Ratio, CrossComm will have the right to
terminate the Merger Agreement); and (ii) in the event that the Final Closing
Price is more than $20.83, Olicom will have the right to decrease the Exchange
Ratio to a number which, when multiplied by the Final Closing Price, equals
$5.56 (and if Olicom so decreases the Exchange Ratio, CrossComm will have the
right to terminate the Merger Agreement). The business combination is subject to
certain conditions and approvals, including the approval of both companies'
shareholders and will be accounted for by Olicom under the purchase method of
accounting. In the first quarter of 1997, the Company recorded approximately
$356,000 of costs associated with the pending business combination with Olicom .


                                       9
<PAGE>   10
 
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Revenue
-------

The Company's product revenue increased by 12% from $8,029,000 for the three
months ended March 31, 1996 to $8,988,000 for the three months ended March 31,
1997. This increase is due primarily to increased switching product revenues and
sustained router product revenues as decreases in the XL router unit sales were
offset by increases in ILAN router unit sales. During the comparative quarter in
1996, the Company's switching product line had not yet been completed.

The Company believes that future product revenue levels will be highly dependent
on its ability to successfully market ATM products, its ability to expand and
capitalize on new indirect and international sales channels, its ability to
bring other new products to market on a timely basis, and upon stability within
the Company's direct sales force.

Service revenue (i.e. maintenance, ExpertWatch and support contracts, billable
product repairs, customer training and product installations) increased by 7%
from $2,629,000 for the three months ended March 31, 1996 to $2,815,000 for the
three months ended March 31, 1997. This growth is primarily attributable to an
increase in the number of installed units.

International revenues accounted for 30% of total revenues for the three month
periods ended March 31, 1996 and 1997, respectively. During the quarter ended
March 31, 1997 versus the comparative quarter in 1996, increased revenue from
Canada and from the Company's subsidiary in the United Kingdom were offset by a
decrease in revenue from the Company's European distributors. The Company
believes that international sales will continue to represent a significant
portion of the Company's revenues. However, the percentage of total revenues
derived from international sales may fluctuate based on changes in the
percentage growth of domestic revenues versus international revenues, the timing
of orders from international distributors, end users and the Canadian indirect
channel partner and the addition of new international distributors.


Gross Profit
------------

Gross profit as a percentage of total revenues for the quarter ended March 31,
1997 increased to 53% from 47% for the same period in 1996. The increase in
gross profit as a percentage of total revenues is primarily attributable to the
increased net revenues, lower product costs as a percentage of revenue and a
higher percentage of ILAN router revenues for which CrossComm realizes higher
gross margins as a percentage of revenue.

The Company believes that future gross profit levels as a percentage of total
revenues will be highly dependent on the continued transition from router
products to new switching technologies. Delays in the introduction of new XL
features and new ATM features, engineering change orders 


                                       10
<PAGE>   11

related to existing products, the Company's inability to generate sufficient
volume to enable product unit cost decreases, pricing pressures associated with
switching products, or higher than expected introductory costs of new ATM
switching modules could negatively impact gross profit levels. Additionally, to
the extent the Company is successful at increasing sales through indirect
channels, gross profit as a percentage of revenue could be adversely affected
because of lower gross margins on such sales.


Selling, General and Administrative
-----------------------------------

Selling, general and administrative expenses decreased to $4,108,000, or 35% of
total revenues for the three months ended March 31, 1997 from $4,614,000, or 43%
of total revenues for the corresponding period in 1996. The decrease in expenses
was primarily attributable to a reduction in headcount costs as a result of
employee turnover and the elimination of certain positions during 1996 and a
reduction in travel expenses. These declines were partially offset by $229,000
of severance expenses incurred during the quarter as the Company continued its
efforts to decrease costs.

Selling, general and administrative expenses as a percentage of revenues may
fluctuate on a quarterly basis due to quarterly fluctuations in revenues, the
timing of spending for marketing programs and the timing of hiring sales,
marketing and administrative personnel.


Research and Development
------------------------

Research and development expenses decreased to $1,835,000, or 16% of total
revenues during the three months ended March 31, 1997 from $2,448,000, or 23% of
total revenues for the corresponding period in 1996. The decrease is primarily
due to: (i) a reduction in headcount costs as a result of employee turnover and
the elimination of certain positions during 1996, (ii) a decline in payroll
costs due to the termination of certain research and development employees in
the fourth quarter of 1996 due to the Company's decision not to fund previously
planned development projects that it considered outside the realm of the
Company's current strategy, (iii) a decline in the development costs associated
with high speed networking products involving ATM and LAN switching technologies
due to the Company's introduction of these products in 1996 and (iv) a reduction
in depreciation due to the write-off of fixed assets during the fourth quarter
of 1996.

The Company believes that the markets for its products are characterized by
rapid rates of technological innovation for both hardware and software products.
The Company expects to continue to invest a significant amount of its resources
in new products, product enhancements and software development. If the Company
experiences an increase in the turnover of engineers and has difficulty
recruiting qualified replacements, its ability to compete in such a fast moving
technological market could be impeded and could have a negative impact on
revenue.


                                       11
<PAGE>   12




Income Taxes
------------

Pursuant to Financial Accounting Standards No. 109, "Accounting for Income
Taxes", the Company has not recorded a provision for income taxes for the three
months ended March 31, 1997 due to the availability of loss carryforwards to
offset current period income or a benefit related to the operating losses
experienced for the three month period ended March 31, 1996.


LIQUIDITY AND CAPITAL RESOURCES

To date, the Company has satisfied its cash requirements principally with the
proceeds of equity financings and cash provided from operating activities.
During the three months ended March 31, 1997, the Company provided $1,335,000 in
cash from operating activities compared to $2,562,000 used for the three months
ended March 31, 1996. The increase in cash provided from operating activities is
primarily attributable to the decrease in operating loss for the quarter ended
March 31, 1997 versus the operating loss for the corresponding quarter in 1996,
and the timing of changes in working capital in 1997 compared to 1996. At March
31, 1997, the Company had $8,965,000 in cash and cash equivalents, $34,132,000
in available-for-sale securities. The Company also had a credit line available
for international borrowings in the amount of $320,000. This line makes
available short-term credit in the form of guarantees. Grant of credit and its
continued availability is at the sole discretion of the bank. At March 31, 1997,
this line was fully utilized.

The Company believes that existing cash and available-for-sale securities as
well as cash generated from operations will be sufficient to finance its
operations and currently projected capital expenditures through at least the
next 24 months. While the Company believes that its ongoing operations will be
financed primarily from internally generated funds, it anticipates funding costs
related to the merger with Olicom A/S out of existing cash and
available-for-sale securities.


MERGER WITH OLICOM A/S

On March 20, 1997, the Company entered into an Agreement and Plan of
Reorganization with Olicom A/S ("the Merger Agreement"). Upon the effectiveness
of the merger, each share of CrossComm common stock will be exchanged for $5.00
in cash, 0.2667 shares of Olicom common stock (the "Exchange Ratio") and 3-year
warrants to purchase 0.1075 shares of Olicom common stock at an exercise price
of $19.74 per whole share. However, (i) in the event the average of the high and
low sales price for Olicom common stock for the ten trading days immediately
preceding (but excluding) the fifth trading day before the meeting of the
CrossComm stockholders held for the purpose of considering the merger, as
reported on the Nasdaq National Market (the "Final Closing Price") is less than
$12.50, Olicom will have the right to increase the Exchange Ratio to the number
which, when multiplied by the Final Closing Price, equals $3.33 (and if Olicom
does not so increase the Exchange Ratio, CrossComm will have the right to
terminate the Merger Agreement); and (ii) in the event that the Final Closing

                                       12

<PAGE>   13

Price is more than $20.83, Olicom will have the right to decrease the Exchange
Ratio to a number which, when multiplied by the Final Closing Price, equals
$5.56 (and if Olicom so decreases the Exchange Ratio, CrossComm will have the
right to terminate the Merger Agreement). The business combination is subject to
certain conditions and approvals, including the approval of both companies'
shareholders.

Olicom develops and markets a broad range of Token-Ring, Fast Ethernet and ATM
local area network products. Olicom products are distributed worldwide by a
network of strategic partners and resellers. Founded in 1985, Olicom's corporate
headquarters is located in Copenhagen, Denmark and their stock is traded on the
Nasdaq National Market under the symbol OLCMF.

Achieving the anticipated benefits of the merger will depend on, among other
things, the integration of the companies' respective product offerings,
coordination of sales and marketing organizations, and research and development
efforts. There can be no assurances that integration will be accomplished
smoothly and successfully. The integration of certain operations following the
merger will require the dedication of management resources which may temporarily
distract the attention from the day-to-day business of the respective companies.
The inability of management to successfully integrate the operations of the two
companies could have an adverse effect on the business and results of operations
of the combined companies. In addition, there can be no assurance that present
and potential customers of the Company and Olicom will continue their current
buying patterns and any significant delay or reduction in orders could have an
adverse effect on the results of operations.

In the event the merger is not consummated, the Company's stock price may
decline and its results of operations could be materially and adversely
affected. In addition, the Company's relationships with its customers and
position in the industry could be materially and adversely affected. Further,
such failure could have a negative impact on the Company's ability to attract
and retain key personnel.


FACTORS THAT MAY AFFECT OPERATING RESULTS

The statements contained in this Report on Form 10-Q that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including statements regarding the Company's expectations, hopes,
intentions or strategies regarding the future. Forward-looking statements
include, among others: statements regarding future product revenue levels;
statements regarding future international sales; statements regarding future
gross profit levels; statements regarding the level of future selling, general
and administrative and research and development expenses; statements regarding
the sufficiency of the Company's existing cash and available-for-sale securities
to meet future operating cash requirements; and statements regarding the
Company's proposed merger with Olicom. All forward-looking statements included
in this document are based on information available to the Company on the date
hereof, and the Company assumes no obligation to update any such forward-looking
statements. It is important to note that the Company's actual results could
differ materially from those in such forward-looking statements. Some of the
factors that could cause actual results to differ materially are set forth
below.


                                       13

<PAGE>   14

The Company's future operating results could be adversely affected by a number
of factors, including, among other things, market conditions specific to the
highly competitive networking industry market, the degree and rate of growth of
the market in which the Company operates, the ability of the Company to develop,
market and forecast demand of new and existing products, customer acceptance of
new products introduced by the Company, dependence on suppliers, the Company's
ability to successfully increase distribution and the Company's ability to
attract and retain key personnel.

The networking products industry is highly competitive and subject to rapid
technological change. Significant competitive factors in the networking products
market include product features, performance, price, the timing of product
introductions, the emergence of new standards, quality and customer support. The
industry is dominated by much larger competitors that have substantially greater
technical, financial and marketing resources and greater name recognition than
the Company. The Company currently lacks the critical mass and product line
breadth and depth of these much larger competitors. Accordingly, the Company has
had a difficult time getting opportunities to bid its products and services to
potential customers and to give these potential customers the confidence that
the Company has a sustainable business and has the ability to deliver its
products and services. The Company also competes against other companies that
focus on specific technologies within the networking products industry. The
Company's net losses during the past three years has made it very difficult for
the Company to retain customers and to attract new customers. There can be no
assurance that the Company will be able to compete successfully in the future or
that competitive pressures will not adversely affect the Company's financial
condition and results of operations.

The Company's net losses and the highly competitive networking industry resulted
in a high rate of employee turnover at the Company in 1996, especially in the
research and development and direct sales groups. There can be no assurances
that the Company will not continue to experience such high rates of turnover in
the future. In the highly competitive networking products industry, the Company
has also found it difficult to recruit qualified replacements. The Company
believes that its future success is contingent on its ability to attract and
retain key employees. If the Company continues to incur a high rate of employee
turnover and fails to recruit qualified replacements, its research and
development efforts, as well as sales and marketing, could be materially and
adversely affected, thereby resulting in a material adverse effect on the
Company's results of operations and financial position.

As customers require increased performance with nonstop availability, total
network connectivity and a migration path to high bandwidth switched networks,
the Company believes that future profitability is highly dependent on
successfully completing and marketing its new high speed ATM switching modules.
The success of these new modules will depend on the Company's ability to bring
them to market on a timely basis, successful product performance, market
acceptance of the modules and the Company's ability to produce the modules in
quantities sufficient to meet the expected demand.

In the latter part of 1996, the Company decided not to proceed with further
development of its completed Ethernet switching products due to pricing
pressures from competitors and the Company's inability to manufacture these
products at lower costs and realize acceptable gross profit levels. The Company
is currently re-evaluating its earlier decision and although the 


                                       14
<PAGE>   15

Company plans to support all Ethernet switching products that have been sold,
the prior decision to eliminate further development could have a negative impact
on the Company's ability to sell Ethernet switching products.

The Company is increasingly dependent on suppliers to deliver key components on
time, in quantities sufficient to meet demand. The failure of any of these
suppliers to deliver these components in sufficient quantities or on time could
have a material adverse effect on the Company's results of operations.

The Company's backlog at the beginning of each quarter is not necessarily
indicative of actual sales for any succeeding period. The Company's sales often
reflect orders shipped in the same quarter that they are received. Combining
this fact with the introduction of new products, the lack of historical sales
trends for those new products and long purchasing lead times for inventory
components, there can be no assurance that the Company will have the proper mix
of inventory to fulfill all of the orders. If inventory is purchased in
anticipation of expected orders and the expected orders are not received or are
delayed, then this could have a material adverse effect on the Company's
financial position and results of operations.

The Company expects to continue to make significant investments in research and
development, sales and marketing and technical support staff. If the Company is
not able to increase revenue levels, results of operations could be materially
adversely affected.


                                       15
<PAGE>   16




PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

         None.

Item 2.   Changes in Securities

         None.

Item 3.   Defaults Upon Senior Securities

         Not Applicable.

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

         None

Item 5.   Other Information

         None

Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits

     The exhibit filed as part of this form 10-Q is listed on the Exhibit Index
immediately preceding such exhibits, which Exhibit Index is incorporated herein
by reference.

     (b)  Reports on Form 8-K

         None




                                       16

<PAGE>   17


                                   SIGNATURES



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


                                  CROSSCOMM CORPORATION







Date:                             By: 
     -----------------               -----------------------
                                     Douglas G. Bryant
                                     Chief Financial Officer
                                     (Principal Financial & Accounting Officer)



                                       17
<PAGE>   18
  

                                  EXHIBIT INDEX


Exhibit No.         Document
-----------         --------


    11              Statement Regarding Computation of Per Share Earnings (Loss)

    27              Financial Data Schedule   (EDGAR)