<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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


       For the quarterly period ended       August 1, 1998         .
                                     ------------------------------
   
[   ]  TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934


For the transaction period from                        to
                               ------------------------    

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

Commission file number        0-17168      .
                       --------------------  

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


          Virginia                                     54-1289115          
--------------------------------                 ---------------------
(State or Other Jurisdiction of                   (I.R.S. Employer
 Incorporation of Organization)                   Identification No.)


                               45472 Holiday Drive
                            Sterling, Virginia 20166
         --------------------------------------------------------------
               (Address of principal executive offices, Zip code)


                                 (703) 318-7750
         --------------------------------------------------------------
               (Registrants telephone number, including area code)


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

As of September 10, 1998, there were 12,343,442 shares of the Common Stock, par
value $.01 per share, of the registrant outstanding.

No exhibits are filed with this report, which consists of 12 consecutively
numbered pages.

<PAGE>   2
                      FASTCOMM COMMUNICATIONS CORPORATION

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
PART I              FINANCIAL INFORMATION                                                    Page No.
                                                                                             --------
<S>     <C>                                                                                  <C>
        Item 1.     Financial Statements

                        Consolidated Statements of Operations
                        Fiscal quarters ended August 1, 1998
                         and August 2, 1997................................................     3

                        Consolidated Balance Sheets
                        August 1, 1998, and April 30, 1998.................................     4

                        Consolidated Statements of Cash Flows
                        Fiscal quarters ended August 1, 1998
                         and August 2, 1997................................................     5

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

        Item 2.         Management's Discussion and Analysis of
                        Financial Conditions and Results of
                        Operations.........................................................  7-10

PART II                 OTHER INFORMATION

        Item 1. Legal Proceedings..........................................................    11

SIGNATURES.................................................................................    12
</TABLE>

                                       2


<PAGE>   3
                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                       FASTCOMM COMMUNICATIONS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Debtor in Possession)

                                   (unaudited)

<TABLE>
<CAPTION>

                                                                              Fiscal quarter ended
                                                                    ------------------------------------------
                                                                         August 1               August 2,
                                                                          1998                    1997
                                                                    ------------------      ------------------
<S>                                                                   <C>                    <C>

Revenue                                                                $  1,129,875           $  2,001,948

Expenses
        Cost of sales                                                       611,841                908,831
        Selling, general and administrative                               1,569,838              1,737,967
        Research and development                                            702,456                615,516
        Depreciation and amortization                                       115,187                127,542
        Litigation settlement                                                 7,970                      -
                                                                       ------------           ------------
Loss from operations                                                     (1,877,417)            (1,387,908)

Other income (expense)
        Other income                                                                                15,154
        Interest income                                                      10,189                 57,095
        Interest expense                                                    (27,866)               (64,683)
                                                                       ------------           ------------

Loss before reorganizional items                                         (1,895,094)            (1,380,342)

Reorganizational items
        Professional fees                                                   110,059                      -
        Interest earned on accumulated cash
        resulting from Chapter 11 proceeding                                 (5,154)                     -
                                                                       ------------           ------------
                                                                            104,905                      -
                                                                       ------------           ------------

Net loss                                                               $ (1,999,999)          $ (1,380,342)
                                                                       ============           ============

Loss per share:
             Basic:                                                          ($0.15)                ($0.14)
             Diluted:                                                        ($0.15)                ($0.14)

Weighted average number of shares
             Basic                                                       12,273,731             10,040,647
             Diluted                                                     12,273,731             10,040,647

</TABLE>

      See accompanying notes to unaudited consolidated financial statements


                                        3
<PAGE>   4
                             FASTCOMM COMMUNICATIONS CORPORATION
                                 CONSOLIDATED BALANCE SHEETS
                                    (Debtor in Possession)

                                            ASSETS
<TABLE>
<CAPTION>
                                                                                 August 1                April 30,
                                                                                  1998                      1998
                                                                             ----------------         --------------
                                                                               (unaudited)
<S>                                                                          <C>                      <C>
Current assets
     Cash and cash equivalents                                                $  1,530,643              $  1,213,052
     Accounts receivable, net                                                    1,291,804                 3,126,100
     Inventories, net                                                            3,445,547                 3,118,195
     Prepaid and other                                                             332,041                   374,614
                                                                              ------------              ------------
                                                                                 6,600,035                 7,831,961


Property and equipment, net                                                        696,301                   775,457
Deferred financing costs                                                            57,258                    76,344
Notes receivable                                                                    26,400                    26,400
Goodwill, net                                                                      460,389                   482,144
Other assets                                                                        45,323                    33,723
                                                                              ------------              ------------
                                                                              $  7,885,706              $  9,226,029
                                                                              ============              ============


                             LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Accounts payable                                                         $    569,813              $  2,427,712
     Accrued payroll                                                               220,110                   308,109
     Other current liabilities                                                     367,100                   843,178
     Accrued litigation settlement                                                       -                 1,195,560
                                                                              ------------              ------------
                                                                                 1,157,023                 4,774,559

Liabilities subject to compromise  (a)                                           5,011,014

Convertible debentures                                                                   -                 1,205,299
                                                                              ------------              ------------
                                                                                 6,168,037                 5,979,858
                                                                              ------------              ------------

Shareholders' equity
     Common stock, $.01 par value,                                                 123,434                   120,488
     (25,000,000 shares authorized; 12,343,442and
     12,048,753 issued and outstanding)
     Additional paid in capital                                                 21,104,750                20,636,197
     Accumulated deficit                                                       (19,510,515)              (17,510,514)
                                                                              ------------              ------------
     Total shareholders' equity                                                  1,717,669                 3,246,171

                                                                              ------------              ------------
                                                                              $  7,885,706              $  9,226,029
                                                                              ============              ============

(a)  Liabilities subject to compromise

     Accounts payable                                                         $  3,052,185              $          -
     Accrued litigation settlement                                               1,203,530                         -
     Convertible debentures                                                        755,299                         -
                                                                              ------------              ------------
                                                                              $  5,011,014              $          -
                                                                              ============              ============
</TABLE>

      See accompanying notes to unaudited consolidated financial statements


                                        4
<PAGE>   5
                       FASTCOMM COMMUNICATIONS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Debtor in Possession)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                          Fiscal quarter ended
                                                                  --------------------------------------
                                                                       August 1             August 2,
                                                                        1998                  1997
                                                                  -----------------     ----------------
<S>                                                               <C>                   <C>
Operating activities
    Net loss                                                        $(1,999,999)            $(1,380,342)

  Items not affecting cash
    Depreciation and amortization                                       115,187                 127,542
    Provision for doubtful accounts                                           -                 125,000
    Provision for inventory obsolescence                                      -                  75,000
    Non cash interest expense on debentures                              21,499                  62,500
    Amortization of deferred financing costs                             19,086                       -
    Provision for litigation loss                                         7,970                       -
  Changes in assets and liabilities
    Accounts receivable                                               1,834,297               1,184,809
    Inventories                                                        (327,352)               (608,472)
    Prepaid and other current assets                                     42,573                 (42,790)
    Other non current assets                                                  -                 (15,460)
    Accounts payable and accrued liabilities                            630,208                 430,118
    Other current liabilities                                           (11,600)                 17,863

                                                                    -----------             -----------
    Net cash used by operations                                         331,869                 (24,232)
                                                                    -----------             -----------

Investing activities
    Additions of property, plant and equipment                          (14,278)               (139,387)

                                                                    -----------             -----------
    Net cash used by investing activities                               (14,278)               (139,387)
                                                                    -----------             -----------

Financing activities
    Proceeds from the issuance of convertible debentures                      -               2,000,000
    Payment of deferred financing costs                                       -                (100,000)
    Net proceeds from exercise of options                                     -                  18,097
    Repayment of notes payable                                                -                 (29,000)

                                                                    -----------             -----------
    Net cash provided by financing activities                                 -               1,889,097
                                                                    -----------             -----------

Net increase in cash and equivalents                                    317,591               1,725,478

Cash and cash equivalents, beginning of period                        1,213,052               4,036,336
                                                                    -----------             -----------

Cash and cash equivalents, end of period                            $ 1,530,643             $ 5,761,814
                                                                    ===========             ===========

Supplemental Cash Flow Disclosure:
    Reorganizational items affecting cash

    Professional fees paid                                          $    85,000             $         -
    Interest received on accumulated cash
       resulting from Chapter 11 proceeding                              (5,154)                      -
                                                                    -----------             -----------
                                                                    $    79,846             $         -
</TABLE>

      See accompanying notes to unaudited consolidated financial statements

                                        5
<PAGE>   6


                      FASTCOMM COMMUNICATIONS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


1.      BASIS OF PRESENTATION
The accompanying interim consolidated financial statements of FastComm
Communications Corporation (the "Company") have been prepared without audit
pursuant to the rules and regulations of the Securities and Exchange
Commission.  Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading.  These financial
statements should be read in conjunction with the consolidated financial
statements and related footnotes included in the Company's latest Annual Report
on Form 10-K.

In the opinion of Management, the consolidated financial statements reflect all
adjustments considered necessary for a fair presentation and all such
adjustments are of a normal and recurring nature.    The results of operations
as presented in this report are not necessarily indicative of the results to be
expected for the fiscal year ending April 30, 1999.

The Company's fiscal year ends on April 30.  For interim reporting purposes the
interim fiscal quarters are closed on the first weekend following the calendar
quarter end date, unless the quarter end date falls on a weekend, in which case
such weekend is used as the interim fiscal quarter end. The quarter ended
August 1, 1998, consisted of 93 calendar days as compared to 94 calendar days
for the quarter ended August 2, 1997.

2.       EARNINGS (LOSS) PER SHARE
Net income (loss) per common share is calculated using the weighted average
number of shares of common stock outstanding and common share equivalents
outstanding for the period.  For the quarters ended August 1, 1998 and August
2, 1997, the earnings per share calculation does not include common share
equivalents in that the inclusion of such equivalents would be antidilutive.

3.       INVENTORIES
Inventories are valued at the lower of cost or market and consist of the
following:

<TABLE>
<CAPTION>
                                      August 1,           April 30,
                                        1998                1998
                                    -----------------------------------
     <S>                           <C>                 <C>
     Production materials           $   2,120,106       $   1,547,922
     Work in process                      319,304             336,680
     Finished goods                     1,006,137           1,233,593
                                    -------------       -------------
                                    $   3,445,547       $   3,118,195
                                    =============       =============
</TABLE>


4.      SIGNIFICANT CUSTOMERS AND CONCENTRATION OF RISK
The quarter ended August 1, 1998, includes sales of $126,000 representing 11%
of total revenues to one unrelated third party domestic corporation.  As of
August 1, 1998, accounts receivable includes $55,000 due from this corporation.

5.      INCOME TAXES
The Company has estimated its annual effective tax rate at 0% due to
uncertainty over the level of earnings in fiscal 1999.   Also, the Company has
net operating loss carryforwards for income tax reporting purposes for which no
income tax benefit has been recorded due to uncertainty over generation of
future taxable income.

                                       6


<PAGE>   7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS


PETITION FOR REORGANIZATION UNDER CHAPTER 11

On June 2, 1998, the Company filed a voluntary petition for reorganization
under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy
Court for the Eastern District of Virginia.  This filing was a direct result of
enforcement activities by a judgment creditor. (See Part II. Item 1. Legal
Proceedings)   The Company has filed its Schedules and Statements of Financial
Affairs in accordance with the requirements of the Bankruptcy Code and is
current with its monthly operating reports. The Company continues to operate
under Bankruptcy Court protection from creditors while it develops  a plan of
reorganization.

Chapter 11 provides that, unless the court appoints a trustee, the Company has
the exclusive right to file a plan of reorganization for the first 120 days
subsequent to the filing of the petition (or for such longer or shorter period
as the Bankruptcy Court may permit).  The Company plans to exercise this right
and is currently preparing its plan.  Such plan is subject to the approval of
the Bankruptcy Court.  The approval of the plan is dependent on the Company's
ability to demonstrate that it will be able to meet its obligations, return to
profitability, generate positive cash flow or raise new capital.  The Company
can offer no assurance as to whether its plan will be approved, or that, if
approved, the terms and conditions of the plan will be favorable to its
creditors and shareholders.

If the Company is unable to attain approval of its plan or the exclusive period
lapses, any creditor or party in interest may file a competing plan of
reorganization. If the court approves such plan, control of the Company might
transfer to the proponents of the competing plan.  The Company is unaware of
any efforts to prepare a competing plan of reorganization, however it can offer
no assurances as to whether one might be prepared in the future.

FUTURE PROSPECTS

On a forward-looking basis, the Company anticipates improved sales of data
based frame relay products.  It is currently making changes to the Comstat
product that will qualify this product for larger and enhanced distribution
channels.  The Company anticipates that sales related to its license agreement
with KG Data will generate significant revenues commencing with the later part
of its fiscal year ended April 30, 1999.   The Company has changed its
organizational structure in an effort to reduce costs and anticipates lower
sales and administration spending levels in the future.

The Company anticipates that it will require additional funding to meet future
expansion and research and development expenses.  It is anticipated that such
funding will be generated by way of additional placements of equity, through
research and development arrangements funded by third parties or by investments
by strategic partners.  The Company can give no assurance as to whether it will
be able to conclude such financing arrangements, or that, if concluded, they
will be on terms favorable to the Company.

The Company anticipates significant legal expenses associated with its
reorganization and other legal affairs, however, it is unable to estimate the
amount of such expenses at this time.  Assuming the plan is approved, the
Company anticipates a return to profitability in the latter part of its  fiscal
year ended April 30, 1999.

There can be no assurance that the required increased sales and improved
operating efficiencies necessary to return to profitability will materialize or
if they do, the Company will be able to raise sufficient funding to finance its
working capital needs.  Absent a return to profitability or the receipt of
additional capital, FastComm is unlikely to be able to operate and meet its
obligations throughout fiscal year 1999.  The Company's independent auditors
have included an explanatory paragraph in their opinion on the fiscal 1998
consolidated financial statements related to this uncertainty.  No adjustments
to the financial statements have been made to reflect these risks.



                                       7
<PAGE>   8

RESULTS OF OPERATIONS

REVENUE

<TABLE>
<CAPTION>
                      Fiscal quarter ended
                 --------------------------------
                  August 1            August 2,
                    1998                1997
                 -----------         ----------
                 <S>                <C>

                 $1,129,875          $2,001,948
</TABLE>

The Company believes that its filing a petition for reorganization under
Chapter 11 has negatively impacted its ability to sell its products in the
market place in the near term and it is unable to predict the effect this
filing will have on future sales. The Company's selling efforts were further
hindered by delays in certain foreign markets and planned volume orders.

Total revenues decreased $2,136,000 (65%) compared with that of the previous
quarter and decreased $872,000 (44%) when compared with the corresponding
quarter of the previous fiscal year.  This decrease is primarily attributable
to a decrease in unit sales of voice and data frame relay access devices
($365,000 in the current fiscal quarter as compared with $2,425,000 in the
previous fiscal quarter and $1,268,000 in the first quarter of the previous
fiscal year).  Sales were further negatively impacted by reduced unit sales of
Comstat product ($365,000 in the current fiscal quarter as compared with
$721,000 in the previous fiscal quarter and $613,000 in the first quarter of
the previous fiscal year).  This decline was offset by a $115,000 increase in
sales of data compression products.

The Company is engaged in discussions with several large resellers worldwide,
each of which has multiple end user opportunities.  The Company can give no
assurance as to the outcome of such negotiations.

The quarter ended August 1, 1998, includes sales of $126,000 to one,
unrelated, domestic corporation.

A significant portion of the Company's sales are derived from products shipped
against firm purchase orders received in each fiscal quarter and from products
shipped against firm purchase orders released in that quarter.  Unforeseen
delays in product deliveries or the closing of sales, introduction of new
products by the Company or its competitors, supply shortages, varying patterns
of customer capital expenditures or other conditions affecting the digital
access product industry or the economy during any fiscal quarter could cause
quarterly revenue and net earnings to vary greatly.


COST OF GOODS SOLD AND GROSS MARGIN

<TABLE>
<CAPTION>
                                         Fiscal quarter ended
                                    --------------------------------
                                      August 1            August 2,
                                       1998                 1997
                                    ----------           -----------
            <S>                    <C>                  <C>
             Cost of sales          $   611,841          $   908,831

             Gross margin                    46%                  55%
</TABLE>

The decline in gross margin is primarily attributable to an increase in fixed
manufacturing costs as a percentage of gross sales and an increase in the sale
of voice frame relay access products as a percentage of gross sales.  The voice
products are produced by another manufacturer and as such generate a
significantly lower gross margin when compared with that of data products.
Gross margins were also negatively impacted by lower sales of data frame relay
access products that generate relatively higher gross margins.  The Company
anticipates continued sales of voice frame relay products.

SELLING AND GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>
                                        Fiscal quarter ended
                                   --------------------------------
                                     August 1            August 2,
                                       1998                1997
                                   -----------        -------------
                                   <S>               <C>
                                   $ 1,569,838        $ 1,737,967
</TABLE>

Selling, general and administrative expenses decreased $168,000 or (10%) when
compared with that of the corresponding quarter in the previous fiscal year.
This is primarily attributable to increased compensation costs offset by a
decline in commission expenses associated with a decline in sales ($123,000
net); decreased advertising and promotion costs ($136,000); decreased travel
costs ($25,000) and decreased bad debt expense ($130,000).

                                       8
<PAGE>   9


RESEARCH AND DEVELOPMENT EXPENSES

<TABLE>
<CAPTION>
                                   Fiscal quarter ended
                                ------------------------------
                                  August 1         August 2,
                                    1998             1997
                                ------------     ------------
                              <S>                <C>
                                $  702,456       $   615,516
</TABLE>

Research and development expenditures consist primarily of hardware and
software engineering, personnel expenses, subcontracting costs, equipment,
prototypes and facilities.  The increase in such expenses is primarily
attributable to increased labor and material costs associated with new product
development and new product prototypes.

The markets for the Company's products are characterized by continuing
technological change.  Management believes that significant expenditures for
research and development will continue to be required in the future.

DEPRECIATION AND AMORTIZATION
The Company's autodialer patent was fully depreciated during the previous
fiscal year, which accounts for the current quarter decline in depreciation and
amortization.

REORGANIZATIONAL ITEMS
The Company incurred $115,000 in expenses associated with its reorganization
under Chapter 11.  Such expenses primarily consisted of legal fees and the
costs of financial consulting services.

LIQUIDITY AND CAPITAL RESOURCES
At August 1, 1998, the Company had $1.5 million in cash.  Working capital
increased from $3.1 million at April 30, 1998 to $5.4 million at August 1,
1998.  At August 1, 1998, the Company had a current ratio of 5.7 to one.  The
improvement in these measures of liquidity is attributable to the
reclassification of pre petition accounts payable ($3,052,000), accrued
litigation settlement ($1,203,000) and convertible debenture ($755,000)
balances to liabilities subject to compromise.

On June 2, 1998, the Company filed a voluntary petition for reorganization
under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy
Court for the Eastern District of Virginia.  This filing was a direct result of
enforcement activities by a judgment creditor. (See Part II. Item 1. Legal
Proceedings)  The Company continues to operate under bankruptcy court
protection from creditors while it develops a plan of reorganization.

As a result of this petition for reorganization, pre petition accounts payable
($3,052,000), accrued litigation settlement ($1,203,000) and convertible
debenture ($755,000) balances were reclassified to liabilities subject to
compromise.

The Company anticipates that it will require additional funding to meet future
expansion and research and development expenses.  It is anticipated that such
funding will be generated by way of additional placements of equity, through
research and development arrangements funded by third parties or by investments
by strategic partners.  The Company can give no assurance as to whether it will
be able to conclude such financing arrangements, or that, if concluded, they
will be on terms favorable to the Company.

During fiscal year 1997, the Company closed a $5 million private convertible
debenture offering.  The securities were purchased under Regulation D by
institutional investors. Both the debenture and the related preferred stock
earn a 5% dividend payable in common stock or cash at the option of the
Company. The Company received $3 million from this offering in April 1997.
The remaining $2 million was received during the quarter ended August 2, 1997.


FIRST FISCAL QUARTER OF 1999 COMPARED TO FIRST FISCAL QUARTER OF 1998
The Company generated $332,000 in cash from operations during the quarter ended
August 1, 1998.  This compares favorably to $24,000 in cash used by operations
during the corresponding quarter of the previous fiscal year. The $356,000
increase is primarily attributable to cash generated from accounts receivable
and accounts payable balances offset by purchases of inventory and the
$2,016,000 loss in the current fiscal quarter.

Cash used by investing activities totaled $14,000 in the current fiscal quarter.

Cash provided by financing activities is primarily attributable to $2,000,000
in proceeds received, in the corresponding quarter of the previous fiscal year,
as part of the $5 million convertible debenture offering previously discussed.

INVENTORIES
The Company's inventory balances increased $327,000 in the current fiscal
quarter.  This increase is primarily attributable to increased frame relay
product subassemblies.   The Company's reserve for inventory obsolescence
totals $1,370,000. The Company believes  it will be able to ship and/or
liquidate its current inventory levels profitably and that its reserve for
inventory obsolescence and excess inventory is adequate.

                                       9
<PAGE>   10



SHAREHOLDERS' EQUITY
Shareholders' equity decreased $1,544,000 in the current quarter.  The decrease
is attributable to the net loss in the current quarter offset by the conversion
of $450,000 in convertible debentures to common stock.

INCOME TAXES
The Company has estimated its annual effective tax rate at 0% due to
uncertainty over the level of earnings in fiscal 1998.   Also, the Company has
net operating loss carryforwards for income tax reporting purposes for which no
income tax benefit has been recorded due to uncertainty over generation of
future taxable income.


CERTAIN PARTS OF THE FOREGOING DISCUSSION AND ANALYSIS MAY INCLUDE
FORWARD-LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES.
AS A CONSEQUENCE, ACTUAL RESULTS MIGHT DIFFER MATERIALLY FROM RESULTS FORECAST
OR SUGGESTED IN ANY FORWARD-LOOKING STATEMENTS.  SEE "MARKETS FOR REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS -- CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION" IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K.



                                       10


<PAGE>   11

                           PART II. OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS
The United States Securities and Exchange Commission ("SEC") has conducted an
inquiry pursuant to an order directing a private investigation relating to
certain prior public disclosures and periodic reports of the Company.  On April
7, 1998, the Company was informed by the staff of the SEC that the staff
intends to recommend to the Commission that it be authorized to file a civil
injunctive action against the Company and certain of its past and current
officers for various violations of the federal securities laws.  The Company
continues to work with the SEC in an effort to settle this proposed action.  No
assurance can be given that the matter will be settled.

In 1997, Gary H. Davison a former officer and director of the Company commenced
two lawsuits against the Company in the Circuit Court of Fairfax, Virginia, one
for wrongful termination and the other for breach of contract.  The breach of
contract action involved claims for options to purchase 100,000 shares of stock
and a $100,000 bonus.  On February 17, 1998, a jury in Fairfax County awarded
Mr. Davison $1,125,000 in damages and $163,233 in interest accrued from May 26,
1996 in this case.  Accordingly, the Company recorded a loss provision for this
amount in its third fiscal quarter ended January 31, 1998.  Subsequently, this
award was reduced by $100,000.  The Company has filed a petition to appeal this
decision with the Virginia Supreme Court and believes it has sufficient
meritorious defenses to overturn this verdict.  On  August 27, 1998, Davison
filed a brief in opposition to this petition for appeal.

The filing of the bankruptcy petition has stayed any activity on the second
case.  Davison has asked the Bankruptcy Court for leave to lift the stay and to
transfer jurisdiction for the case to the Circuit Court in Fairfax, Virginia.
The Company will vigorously oppose this request.  A hearing on this matter is
scheduled for September 22, 1998.

On June 2, 1998, the Company filed a voluntary petition for reorganization
under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy
Court for the Eastern District of Virginia.  This filing was a direct result of
enforcement activities by a judgment creditor, Gary Davison.  The Company has
filed its Schedules and Statements of Financial Affairs in accordance with the
requirements of the Bankruptcy Court and is current with its monthly operating
reports.   Chapter 11 provides that, unless a trustee is appointed, the Company
has the exclusive right to file a plan of reorganization for the first 120 days
subsequent to the filing of the petition (or for such longer or shorter period
as the Bankruptcy Court may permit).  The Company plans to exercise this right.
The Company continues to operate under bankruptcy court protection from
creditors while seeking to work out a plan of reorganization.

No other material legal proceeding to which the Company is party or to which
the Company is subject is pending and no such proceeding is known by the
Company to be contemplated.



                                       11
<PAGE>   12


                                   SIGNATURES

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

                                     FASTCOMM COMMUNICATIONS CORPORATION
                                     (Registrant)





Date: September 15, 1998             By:  /s/ Peter C. Madsen
                                         ---------------------------------------
                                         Peter C. Madsen
                                         President,  Chief Executive Officer
                                         and Chairman of the Board of Directors
                                          (Principal Executive Officer)







Date: September 15, 1998             By:  /s/ Mark H. Rafferty
                                         --------------------------------
                                         Mark H. Rafferty
                                         Vice President, Chief Financial Officer
                                         Treasurer  and Director
                                         (Principal Financial and Accounting
                                         Officer)



                                       12