<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   July 28, 2001   .
                                      --------------------

                                       OR

        [ ] TRANSITION 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
                             Dulles, 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 5, 2001, there were 29,314,199 shares of the Common
        Stock, par value $.01 per share, of the registrant outstanding.

        No exhibits are filed with this report, which consists of 18
        consecutively numbered pages.


<PAGE>   2


                       FASTCOMM COMMUNICATIONS CORPORATION

                                    FORM 10-Q

                                TABLE OF CONTENTS






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

               Consolidated Statements of Operations
               Fiscal quarter ended July 28, 2001 and July 29, 2000 .......................................3

               Consolidated Balance Sheets
               July 28, 2001 and April 30, 2001............................................................4

               Consolidated Statements of Cash Flows
               Fiscal quarter ended July 28, 2001 and July 29, 2000 .......................................5

               Summary of Accounting Policies ...........................................................6-7

               Notes to Consolidated Financial Statements ..............................................8-10

       Item 2. Management's Discussion and Analysis of
               Financial Condition and Results of Operations...........................................11-16


PART II        OTHER INFORMATION

       Item 1. Legal Proceedings..........................................................................17


SIGNATURES................................................................................................18
</TABLE>


                                       2
<PAGE>   3
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                       FASTCOMM COMMUNICATIONS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                   (unaudited)

<TABLE>
<CAPTION>
                                                         Fiscal quarter ended
                                                   --------------------------------
                                                     July 28,            July 29,
                                                       2001                2000
                                                   ------------        ------------
<S>                                                <C>                 <C>
Revenue                                            $  1,390,406        $  3,647,933

Expenses
       Cost of sales                                    661,130           1,400,183
       Selling, general and administrative              993,144           1,768,903
       Research and development                         657,116           1,311,423
       Depreciation and amortization                    958,383             936,657
                                                   ------------        ------------
Loss from operations                                 (1,879,367)         (1,769,233)

Other income (expense)
       Other income                                          --               1,723
       Interest income                                       --               6,780
       Interest expense                                (166,891)            (87,558)
                                                   ------------        ------------

Net loss                                             (2,046,258)         (1,848,288)
                                                   ------------        ------------

Dividend on prepaid warrants                            (46,475)                 --

Net loss attributable to common shareholders       $ (2,092,733)       $ (1,848,288)
                                                   ============        ============



Basic and diluted loss per share                         ($0.07)             ($0.07)


Weighted average number of shares                    29,097,523          26,025,032
</TABLE>




      See accompanying notes to unaudited consolidated financial statements


                                       3
<PAGE>   4

                       FASTCOMM COMMUNICATIONS CORPORATION
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                           July 28,            April 30,
                                                             2001                2001
                                                         ------------        ------------
                                                         (unaudited)
<S>                                                      <C>                 <C>
Current assets
     Cash and cash equivalents                           $    593,008        $     69,125
     Accounts receivable, net                               1,283,548           1,379,526
     Inventories, net                                       2,424,189           2,759,284
     Prepaid and other                                          1,600              13,628
                                                         ------------        ------------
                                                            4,302,345           4,221,563


Property and equipment, net                                   941,764           1,147,594
Deferred investment advisory fee                               30,044             120,172
Goodwill, net                                               7,962,529           8,714,070
Other assets                                                   38,828              18,830
                                                         ------------        ------------
                                                         $ 13,275,510        $ 14,222,229
                                                         ============        ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Current portion of notes payable                    $  1,000,000        $  1,000,000
     Accounts receivable financing loan                       146,828             356,200
     Current portion of capital lease obligations                  --               1,519
     Checks issued against future deposits                         --             111,278
     Accounts payable                                       2,222,027           3,074,381
     Accrued compensation                                     345,035             978,011
     Other current liabilities                              1,492,378           1,556,283
                                                         ------------        ------------
                                                            5,206,268           7,077,672

Convertible debentures                                      3,224,615             732,643
                                                         ------------        ------------
                                                            8,430,883           7,810,315
                                                         ------------        ------------

Shareholders' equity
     Common stock, $.01 par value,                            290,979             290,666
     (50,000,000 shares authorized; 26,504,665 and
     29,097,874 issued and outstanding)
     Additional paid in capital                            49,291,266          48,812,608
     Accumulated deficit                                  (44,737,618)        (42,691,360)
                                                         ------------        ------------
     Total shareholders' equity                             4,844,627           6,411,914

                                                         ------------        ------------
                                                         $ 13,275,510        $ 14,222,229
                                                         ============        ============
</TABLE>




      See accompanying notes to unaudited consolidated financial statements


                                       4
<PAGE>   5

                       FASTCOMM COMMUNICATIONS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   Fiscal quarter ended
                                                              ------------------------------
                                                                July  28,          July 29,
                                                                  2001               2000
                                                              -----------        -----------
<S>                                                           <C>                <C>
Operating activities
    Net loss                                                  $(2,046,258)       $(1,848,288)

  Adjustments to reconcile net loss to net cash
      used in operating activities:
    Depreciation and amortization                                 958,383            936,657
    Write-offs of Accounts Receivable                            (198,200)              (607)
    Provision for inventory obsolescense                          100,000             26,901
    Non cash interest expense on convertible debentures            62,395             14,392
    Amortization of deferred investment advisory fee               90,128             90,129
  Changes in assets and liabilities
    Accounts receivable                                           294,178           (519,188)
    Inventories                                                   235,095           (777,143)
    Prepaid and other current assets                               12,028           (134,741)
    Other assets                                                  (19,998)                --
    Accounts payable and accrued compensation                  (1,485,330)           762,110
    Other current liabilities                                    (155,357)          (135,133)

                                                              -----------        -----------
    Net cash used in operating activities                      (2,152,936)        (1,584,911)
                                                              -----------        -----------

Investing activities
    Additions of property, plant and equipment                     (1,012)           (48,535)
    Increase in acquisition costs                                      --           (101,905)

                                                              -----------        -----------
    Net cash used in investing activities                          (1,012)          (150,440)
                                                              -----------        -----------

Financing activities
    Checks issued against future deposits                        (111,278)                --
    Net proceeds from the issuance of common stock                     --          1,170,400
    Net proceeds from the issuance of prepaid warrants                 --            346,607
    Net proceeds from issuance of convertible debenture         3,000,000                 --
    Repayments on capital lease obligations                        (1,519)            (9,544)
    Repayments of accounts receivable line of credit             (209,372)          (219,517)
    Increase in restricted cash                                        --            (37,900)

                                                              -----------        -----------
    Net cash provided by financing activities                   2,677,831          1,250,046
                                                              -----------        -----------

Net increase (decrease) in cash and cash equivalents              523,883           (485,305)

Cash and cash equivalents, beginning of period                     69,125            548,136
                                                              -----------        -----------

Cash and cash equivalents, end of period                      $   593,008        $    62,831
                                                              ===========        ===========
</TABLE>




      See accompanying notes to unaudited consolidated financial statements

                                       5
<PAGE>   6

                       FASTCOMM COMMUNICATIONS CORPORATION
                         SUMMARY OF ACCOUNTING POLICIES




USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Certain estimates used by
management are particularly susceptible to significant changes in the economic
environment. These include estimates of inventory obsolescence, valuation
allowances for trade receivables and deferred tax assets and evaluation of the
impairment of goodwill. Each of these estimates, as well as the related amounts
reported in the financial statements, are sensitive to near term changes in the
factors used to determine them. A significant change in any one of those factors
could result in the determination of amounts different than those reported in
the financial statements. Management believes that as of July 28, 2001, the
estimates used in the financial statements are adequate based on the information
currently available.

REVENUE RECOGNITION
Revenues from product sales are recognized at the time of product shipment. An
allowance is provided for estimated sales returns and uncollectible accounts.
Also, the Company establishes a reserve for estimated warranty claims at the
time of product shipment.

GOODWILL
The Company has recorded goodwill based on the difference between the cost and
the fair value of certain purchased assets and it is being amortized on a
straight-line basis over the estimated period of benefit, which ranges from 4 to
7 years. The Company periodically evaluates the goodwill for possible
impairment. The analysis consists of a comparison of future projected cash flows
to the carrying value of the goodwill. Any excess goodwill would be written off
due to impairment.

ASSET IMPAIRMENT
In accordance with Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be disposed of ("SFAS 121"), the Company periodically evaluates the carrying
value of long-lived assets when events and circumstances warrant such a review.
The carrying value of a long-lived asset is considered impaired when the
anticipated undiscounted cash flow from such asset is separately identifiable
and is less than the carrying value. In that event, a loss is recognized based
on the amount by which the carrying value exceeds the fair market value of the
long-lived asset. Fair market value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with the risk involved.

RECENT ACCOUNTING PRONOUNCEMENT
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Accounting Standards No. 142, "Accounting for Goodwill" ("SFAS 142"). SFAS
142 establishes accounting standards for existing goodwill related to purchase
business combinations. Under the Statement, the Company would discontinue the
periodic amortization of goodwill effective with the adoption of the Statement.
Also, the Company would have to test any remaining goodwill for possible
impairment within the first six months of adopting the Statement based on new
valuation criteria set forth in the Statement. Based on information available,
the Company estimates that annual amortization expense will be reduced
approximately $920,000 excluding any potential impairment charge which may
result from the implementation of the new impairment test criteria or
reclassification of goodwill to other intangible assets. The Statement becomes
effective in 2003.

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments" ("SFAS 133"). SFAS 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. SFAS 133
requires that an entity


                                       6
<PAGE>   7

recognize all derivatives as either assets or liabilities and measure those
instruments at fair market value. Under certain circumstances, a portion of the
derivative's gain or loss is initially reported as a component of other
comprehensive income and subsequently reclassified into income when the
transaction affects earnings. For a derivative not designated as a hedging
instrument, the gain or loss is recognized in income in the period of change.
SFAS 133 is effective for all fiscal quarters beginning on January 1, 2001 and
requires application prospectively. Presently, the Company does not use
derivative instruments either in hedging activities or as investments.
Accordingly, the Company believes that adoption of SFAS 133will have no impact
on its financial position or results of operations.

In March 2000, the FASB issued interpretation No. 44 ("FIN 44"),"Accounting for
Certain Transactions Involving Stock Compensation, an Interpretation of APB
Opinion No. 25". FIN 44 clarifies the application of APB No. 25 for (a) the
definition of employee for purposes of applying APB No. 25, (b) the criteria for
determining whether a plan qualifies as a non compensatory plan, (c) the
accounting consequences of various modifications to the previously fixed stock
option or award, and (d) the accounting for an exchange of stock compensation
awards in a business combination. FIN 44 is effective July 2, 2000 but certain
conclusions cover specific events that occur after either December 15, 1998 or
January 12, 2000. The Company believes that adoption of FIN 44 will not have an
affect on the Company's financial statements but may impact the accounting for
grants or awards in future periods.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 which summarizes certain of the SEC staff's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The Staff Accounting bulletin is effective for the fiscal
year beginning May 1, 2001. The initial adoption of this guidance is not
anticipated to have a material impact on the Company's results of operations or
financial position, however, the guidance may impact the way in which the
Company will account for future transactions.


                                       7
<PAGE>   8

                       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, 2002.

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 July
28, 2001 consisted of 89 calendar days while the quarter ended July 29, 2000
consisted of 91 calendar days.

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 presented, 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>
                             July 28,       April 30,
                               2001           2001
                          -----------------------------
<S>                       <C>             <C>
Production materials        $1,114,562    $1,366,116
Work in process                532,281       487,209
Finished goods                 777,346       905,959
                            ----------    ----------
                            $2,424,189    $2,759,284
                            ==========    ==========
</TABLE>

4.      ACCOUNTS RECEIVABLE FINANCING AGREEMENT
On February 6, 2001, the Company entered into an accounts receivable financing
agreement with Alliance Financial Capital, Inc. Under the terms and conditions
of this agreement, the Company can borrow up to the lesser of $3,000,000 or up
to 85% of eligible accounts receivable, as defined in the agreement. The
accounts receivable financing agreement bears interest at the prime rate plus
1.0% plus an additional 1.5% per invoice funded. The term of this agreement is
for twelve months with a minimum average daily account balance of $750,000.

5.      SIGNIFICANT CUSTOMERS AND CONCENTRATION OF RISK
The fiscal quarter ended July 28, 2001 includes sales to one unrelated third
party that represented 42% of total revenues. The fiscal quarter ended July 29,
2000 includes sales of $1,032,000 to this party representing 28% of total
revenues. In addition, the fiscal quarter ended July 29, 2000 included sales of
$572,000, $417,000 and $368,000 representing 16%, 11% and 10%, respectively, of
total revenues to three other unrelated third parties.


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<PAGE>   9

6.      INCOME TAXES
The Company has estimated its annual effective tax rate at 0% due to uncertainty
over the level of earnings in fiscal 2002. 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.

7.      LONG TERM DEBT
In May 2001, the Company raised $3,000,000 through the sale of a 10% senior
secured convertible debenture to Wesley Clover Corporation. All or any portion
of this Debenture may be converted into shares of common stock of the Company by
dividing the aggregate principle amount converted together with all accrued but
unpaid interest to the date of conversion by $0.446. The entire debenture plus
accrued interest is due and payable in a single installment on June 8, 2006,
unless sooner accelerated or converted into shares of common stock. In
connection with this investment, the Company also issued warrants entitling
Wesley Clover to purchase 3,363,229 shares of common stock of the Company for
$0.5575 per share. The warrants expire on June 8, 2006 and may be called for
redemption, by the Company, at such time as the bid price of the Company's
shares of common stock remains above $1.12 for 30 (thirty) consecutive trading
days.

The Company valued the warrant component of this investment at $525,546 using
the Black-Scholes valuation model, and accordingly, recorded this amount as a
discount. This discount will be amortized into interest expense over the five
year life of the warrants. Quarterly amortization charges to interest expense of
$17,518 have been recorded in the current fiscal quarter.

8.      STOCK OPTIONS
The Company has both qualified and non-qualified stock option plans (the
"Plans") under which options to purchase up to 4,750,000 shares of common stock
may be granted to officers, directors and other key employees of the Company.

The exercise price of each option may not be less than 100% of the fair market
value of the stock on the date of grant for incentive stock options or 85% of
such fair market value for non-qualified stock options, as determined by the
Board. Generally, options vest over a three year period and expire five years
from the date of grant and, in most cases, upon termination of employment. The
following table relates to options granted, exercised and cancelled during the
three month period ended July 28, 2001:

<TABLE>
<CAPTION>
                                   Number of
                                     Shares            Price per share
                                   ---------      -----------------------
<S>                                <C>            <C>           <C>
Outstanding at April 30, 2001      3,783,765      $ 0.25   to   $   12.00
Granted during the period            253,000      $ 0.30   to   $    0.51
Cancelled during the period         (490,634)     $ 0.46   to   $    3.97
                                   ---------
Outstanding at July 28, 2001       3,546,131      $ 0.25   to   $   12.00
</TABLE>

The Company has adopted the disclosure-only provisions of SFAS-No. 123
"Accounting for Stock Based Compensation", but applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its stock
option plans. For SFAS No. 123 purposes, the weighted average fair value of each
option granted during the quarter has been estimated as of the date of grant
using the Black-Scholes option pricing model with the following weighted average
assumptions: risk-free interest rate of 6.4%, expected volatility of 95%,
expected option life of 5 years and dividend payout rate of zero. Using these
assumptions, the weighted average fair value of the stock options granted is
$0.28 for the quarter ended July 28, 2001. There were no adjustments made in
calculating the fair value to account for vesting provisions or for
non-transferability or risk of forfeiture.

If the Company had elected to recognize compensation cost based on the fair
value at the grant dates for options issued under the plans described above,
consistent with the method prescribed by SFAS No. 123, net loss applicable to
common shareholders and loss per share would have been changed to the pro forma
amounts indicated below:


                                       9
<PAGE>   10

<TABLE>
<CAPTION>
                                                   Three months ended       Three months ended
Net loss applicable to common shareholders:           July 28, 2001            July 29, 2000

<S>                                                  <C>                      <C>
               As reported                           $   (2,046,258)          $   (1,848,288)
               Proforma                              $   (2,463,296)          $   (2,247,806)

Basic and diluted loss per share:
               As reported                           $        (0.07)          $        (0.07)
               Proforma                              $        (0.08)          $        (0.09)
</TABLE>

As part of a program to retain its employees, the Company adopted a program to
re-price the options of its current employees. The Company also re-priced the
options issued to its board of directors and to its chairman of the board. Under
the program, the exercise price of current stock options was changed to $0.51
per share. Although each employee could elect not to participate in this
program, the exercise price of approximately 2.5 million options was changed to
the lower price. Under applicable accounting rules, the Company will have to
account for future variations in the price of its common stock above $0.51 per
share as compensation expense until the repriced options are either exercised,
cancelled or expire. This calculation will be made each quarter based upon the
performance of the Company's common stock in that quarter. Accordingly,
operating results and earnings per share will be subjected to potentially
significant fluctuations based upon changes in the market price of the Company's
common stock. For the quarter ended July 28, 2001, operating results and
earnings per share were not impacted by this repricing because the price of the
common stock at July 28, 2001 was below $0.51 per share.

9.      RESTRUCTURING COSTS
In fiscal year 2001, the Company commenced a broad restructuring aimed at
achieving profitability and positive cash flow in its fiscal year 2002.
Accordingly, in fiscal year 2001, the Company established a $618,000 liability
for future cash expenditures associated with this restructuring. During the
current fiscal quarter, the Company charged $190,000 against this liability. The
Company anticipates that the remainder of this liability will be substantially
paid in the second quarter of the current fiscal year.

10.     COMMITMENTS AND CONTINGENCIES
A supplier of parts for the Company's integrated access device product line has
filed an action against the Company. The Plaintiff seeks $96,581 for goods sold
and delivered, $280,662 for goods allegedly manufactured but not yet delivered
and $380,015 for parts allegedly ordered by Plaintiff to fulfill anticipated
orders. The Company filed its answer to the complaint on June 15, 2001 and
intends to vigorously defend this case.

On January 29, 2001, two individuals holding subordinated senior notes totaling
$1,000,000 commenced an action in the Circuit Court, Cook County, Illinois
against the Company, Cronus, certain former principal shareholders of Cronus and
a liquidating trust established by Cronus and its trustees seeking repayment of
the notes, together with accrued interest. FastComm has filed an answer and
counterclaim. In connection with this lawsuit, two co-defendants have filed
cross-claims for indemnification against the Company. The Company has denied
liability for indemnification in the circumstances of the lawsuit. All motions
and discovery have been stayed pending the results of settlement discussions.

The Company was recently sued in Federal District Court N.D. Illinois by Richard
L. Abrahams, as Trustee of the R.L.A. 1993 Trust (the "Trust"). The action is
for an alleged breach of contract entered into by the Company and the Trust in
March 2000 in connection with the Cronus acquisition. The trust seeks a
declaratory judgment stating that the Company must issue to it, approximately
628,000 shares of common stock, which it contends, are due under the agreement,
together with unspecified damages and costs.

The Company has been engaged in settlement discussions with the plaintiffs in
each of the two previously mentioned actions and believes that it has reached
tentative settlement agreements in each case which it expects to finalize in the
second fiscal quarter. The proposed terms of these agreements would not have a
material adverse impact on the Company's financial statements.

<PAGE>   11

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




FUTURE PROSPECTS

RECENT FUNDING
In May 2001, the Company raised $3,000,000 through the sale of a 10% senior
secured convertible debenture ("Debenture") to Wesley Clover Corporation. All or
any portion of this Debenture may be converted into shares of common stock of
the Company by dividing the aggregate principle amount converted together with
all accrued but unpaid interest to the date of conversion by $0.446. The entire
debenture plus accrued interest is due and payable in a single installment on
June 8, 2006, unless sooner accelerated or converted into shares of common stock
of the Company. In connection with this investment, the Company also issued
warrants entitling Wesley Clover to purchase 3,363,229 shares of common stock of
the Company for $0.5575 per share. The warrants expire on June 8, 2006 and may
be called for redemption, by the Company, at such time as the bid price of the
Company's shares of common stock remains above $1.12 for 30 consecutive trading
days.

The Company valued the warrant component of this investment at $525,546 using
the Black-Scholes valuation model, and accordingly, recorded this amount as a
discount. This discount will be amortized into interest expense over the five
year life of the warrants. Quarterly amortization charges to interest expense of
$17,518 have been recorded in the current fiscal quarter.

When and if exercised, the unexercised warrants associated with this offering
and other prior offerings and agreements would generate a maximum of $13,000,000
in additional cash for the Company. The Company can give no assurance as to
whether any warrants will be exercised, nor to the amount of cash that will be
generated, if any of these securities are exercised.

SIGNALING OPPORTUNITIES
The Company is using the proceeds from this offering to develop new products and
to add new features to its existing product line. In May 2001, FastComm
announced the SignalPath Release 7 software which significantly increases
performance and system availability in its SignalPath Signaling Gateway product
line. Release 7 software has more capacity and supports higher calling volumes
which in turn means more revenues for carriers who use the Signaling Gateway
product in their networks. This release lays the foundation for future products
aimed at supporting large capacity switch vendors who are looking to replace
entirely the circuit-switch technology used by incumbent telecom providers with
packet networks.

The competitive environment that exists in the telecommunications marketplace
today dictates that the telecommunications carriers and Internet Service
Providers must seek additional revenue sources. Voice over internet protocol
(VoIP) offers unparalleled scalability, flexibility and economy. For this
reason, telecommunications carriers are reselling carrier grade IP telephony
services purchased from business to business outsource providers. A problem
exists in that the VoIP vendors are often limited in terms of supporting
traditional signaling protocols. The Company's SignalPath 230 Signaling Gateway
resolves this issue by providing a new level of interoperability with global
networks that employ protocols not directly supported by the VoIP network.
Worldwide, VoIP networks carried less than 1% of the number of calls made during
calendar year 2000, however it has been estimated that 40% of large corporations
have some sort of VoIP testing underway. Based on this market data, the Company
believes that VoIP will continue to offer revenue opportunities in the future.

PABX OPPORTUNITIES
In June 2001, the Company introduced the R2 Adapter, a small low cost signaling
appliance designed to enable PABX vendors to penetrate international markets
where signaling conversion is required. Next generation IP based PABX's are
software driven and far more flexible and cheaper to administer than traditional
PABX's. According to an independent research report, the market for the IP based
PABX's is significant and is expected



                                       11
<PAGE>   12

to grow from $200 million today to $4 billion over the next four years.
Currently, some PABX vendors, due to signaling incompatibilities, cannot sell IP
based PABX's in parts of the world that employ an R2 signaling variant. The R2
Adapter resolves this incompatibility issue and opens large marketplaces that
deploy R2, such as Latin America, the Middle East, Africa and parts of Southeast
Asia, to these vendors. The IP/PABX vendors will generally sell one R2 Adapter
for every IP based PABX sold. There is a very limited number of suppliers with
competing products in the marketplace and accordingly, the Company anticipates
significant future revenue from this product.

RESTRUCTURING
The Company commenced a broad restructuring aimed at achieving profitability and
positive cash flow in its fiscal year 2002 by reducing costs and focusing on
market opportunities which offer the greatest revenue potential.

The Company discontinued its ChanlComm product line that was designed by KG Data
and closed its Connecticut facility. Until recently, the Company had been
actively marketing the technology associated with this division. The Company has
reduced its headcount from 103 to 63 fulltime employees and consolidated its two
Virginia facilities into one. As a result of these and other cost saving
activities, operating expenses have declined by approximately $1 million per
quarter. One time charges for these restructuring activities were reflected in
the Company's operating results for its fourth fiscal quarter for the year ended
April 30, 2001.

The Company will require additional funding to meet future working capital needs
and research and development expenses. It is anticipated that such funding will
be generated by way of additional placements of convertible debt or equity,
through investments made by strategic partners and through the exercise of in
the money common stock warrants and options. 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.

There can be no assurance that the required increased sales and improved
operating efficiencies necessary to return to profitability will materialize.

As part of a program to retain its employees, the Company adopted a program to
re-price the options of its current employees. The Company also re-priced the
options issued to its board of directors and to its chairman of the board. Under
the program, the exercise price of current stock options was changed to $0.51
per share. Although each employee could elect not to participate in this
program, the exercise price of approximately 2.5 million options was changed to
the lower price. Under applicable accounting rules, the Company will have to
account for future variations in the price of its common stock above $0.51 per
share as compensation expense until the re-priced options are either exercised,
cancelled or expire. This calculation will be made each quarter based upon the
performance of the Company's common stock in that quarter. Accordingly,
operating results and earnings per share will be subjected to potentially
significant fluctuations based upon changes in the market price of the Company's
common stock. For the quarter ended July 28, 2001, operating results and
earnings per share were not impacted by this re-pricing because the price of the
common stock at July 28, 2001 was below $0.51 per share.


RESULTS OF OPERATIONS

REVENUE

<TABLE>
<CAPTION>
                        Fiscal quarter ended
                   -------------------------------
                      July 28,        July 29,
                        2001            2000
                   --------------  ---------------
                   <S>             <C>
                     $1,390,406      $3,647,933
</TABLE>

Total revenues decreased $2,258,000 or 62%, compared with that of the
corresponding quarter of the previous fiscal year. This decrease is primarily
attributable to a decline in unit sales of all of the Company's products
associated with a global downturn in the demand for telecommunications
equipment.

The fiscal quarter ended July 28, 2001 includes sales to one unrelated third
party that represented 42% of total revenues.


                                       12
<PAGE>   13

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
                           -----------------------------
                              July 28,        July 29,
                               2001            2000
                           -------------   -------------
<S>                        <C>             <C>
Cost of sales                 $ 661,130     $ 1,400,183

Gross margin                         52%             62%
</TABLE>

Gross margin on product sales approximated 60% in the current fiscal quarter,
compared to 62% recorded in the corresponding quarter of the previous fiscal
year. The Company increased its reserve for inventory obsolescence by $100,000
in the quarter ended July 28, 2001. This reduced gross margin to 52%. The
Company has recorded a $700,000 reserve for inventory obsolescence, which
management believes is adequate.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<TABLE>
<CAPTION>
                                Fiscal quarter ended
                           -----------------------------
                              July 28,        July 29,
                               2001            2000
                           -------------   -------------
                           <S>             <C>
                              $ 993,144     $ 1,768,903
</TABLE>

Selling, general and administrative expenses decreased $776,000, or 44%, when
compared with that of the corresponding quarter in the previous fiscal year. In
response to the global downturn in demand for telecommunications equipment, the
Company reduced headcount, cut back on travel and other discretionary expenses,
and consolidated operating facilities. Accordingly, salary and related expenses
declined $417,000; travel expenses declined $103,000; professional fees declined
$118,000; and office and occupancy expenses declined $93,000.


RESEARCH AND DEVELOPMENT EXPENSES

<TABLE>
<CAPTION>
                                Fiscal quarter ended
                           -----------------------------
                              July 28,        July 29,
                               2001            2000
                           -------------   -------------
                           <S>             <C>
                              $ 657,116     $ 1,311,423
</TABLE>

Research and development expenditures consist primarily of hardware and software
engineering personnel expenses, subcontracting costs, equipment, prototypes and
facilities. These expenses decreased $654,000 or 50%, in the current quarter
when compared with the corresponding quarter of the previous fiscal year. This
decrease in expenses is primarily attributable to the reductions in headcount,
facility costs and research and development costs associated with the
discontinuance of the ChanlComm product line.

The markets for the Company's products are characterized by continuing
technological change. The Company intends to continue to make substantial
investments in product and technology development and believes that its future
success depends significantly upon its ability to continue to enhance existing
products and to develop or acquire new products that maintain the Company's
technological competitiveness.

Research and development project schedules for high technology products are
inherently difficult to predict, and there can be no assurance that the Company
will achieve its expected initial shipment dates of products in


                                       13
<PAGE>   14

development. The timely availability of new and enhanced products is critical to
the success of the Company. Delays in availability of these new products, or
lack of market acceptance of such products, could adversely affect the Company.

DEPRECIATION AND AMORTIZATION

<TABLE>
<CAPTION>
                                Fiscal quarter ended
                           -----------------------------
                             July 28,        July 29,
                               2001            2000
                           -------------   -------------
                           <S>             <C>
                             $ 958,383       $ 936,657
</TABLE>

The increase in depreciation and amortization is primarily associated with the
increased depreciation associated with fixed asset additions.


LIQUIDITY AND CAPITAL RESOURCES

At July 28, 2001, the Company had a cash balance of $577,000. During the current
fiscal quarter, working capital deficit decreased from $2.9 million at April 30,
2001 to $820,000 at July 28, 2001. At July 28, 2001, the Company had a current
ratio of 0.84 to one.

As of the date of this report, the Company has $60,000 in cash and $900,000 in
accounts receivable. The Company is in various stages of negotiation with
several large potential customers as well as potential sources of financing.

MAY PRIVATE PLACEMENT
In May 2001, the Company raised $3,000,000 through the sale of a 10% senior
secured convertible debenture to Wesley Clover Corporation. All or any portion
of this Debenture may be converted into shares of common stock of the Company by
dividing the aggregate principle amount converted together with all accrued but
unpaid interest to the date of conversion by $0.446. The entire debenture plus
accrued interest is due and payable in a single installment on June 8, 2006,
unless sooner accelerated or converted into shares of common stock. In
connection with this investment, the Company also issued warrants entitling
Wesley Clover to purchase 3,363,229 shares of common stock of the Company for
$0.5575 per share. The warrants expire on June 8, 2006 and may be called for
redemption, by the Company, at such time as the bid price of the Company's
shares of common stock remains above $1.12 for 30 (thirty) consecutive trading
days.

The Company valued the warrant component of this investment at $525,546 using
the Black-Scholes valuation model, and accordingly, recorded this amount as a
discount. This discount will be amortized into interest expense over the five
year life of the warrants. Quarterly amortization charges to interest expense of
$17,518 have been recorded in the current fiscal quarter.

UNEXERCISED WARRANTS
When and if exercised, the unexercised warrants associated with this offering
and other prior offerings and agreements would generate a maximum of $13,000,000
in additional cash for the Company. The Company can give no assurance as to
whether any warrants will be exercised, nor to the amount of cash that will be
generated, if any of these securities are exercised.

ACCOUNTS RECEIVABLE FINANCING AGREEMENT
On February 6, 2001, the Company entered into an accounts receivable financing
agreement with Alliance Financial Capital, Inc. Under the terms and conditions
of this agreement, the Company can borrow up to the lesser of $3,000,000 or 85%
of eligible accounts receivable, as defined in the agreement. The accounts
receivable financing agreement bears interest at prime rate plus 1.0% plus an
additional 1.5% per invoice funded. The term of this agreement is for twelve
months with a minimum average daily account balance of $750,000.

In connection with the acquisition of Cronus, the Company assumed $1,000,000 in
debt to two individuals, which is subordinated in priority and payment to all
senior debt referenced above. This debt matured on December 10, 2000. The
Company is currently in default on the repayment of this debt and the
individuals have


                                       14
<PAGE>   15

commenced a lawsuit against the Company. The Company is actively working to
settle this matter.

The Company anticipates that it may 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, by investments by
strategic partners and through the exercise of in the money common stock
warrants and options. 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

THREE MONTHS OF FISCAL 2002 COMPARED TO THREE MONTHS OF FISCAL 2001
The Company used $2,153,000 in cash from operations during the three months
ended July 28, 2001 compared to $1,585,000 in cash used in operations during the
corresponding period of the previous fiscal year. This $648,000 increase is
primarily attributable to an increase in funds used to satisfy current
liabilities offset by funds generated from accounts receivable and reduced
inventory purchases.

Cash provided by financing activities is primarily attributable to the sale of a
$3,000,000, 10% senior secured convertible debenture to Wesley Clover
Corporation.

RESTRUCTURING COSTS
In fiscal year 2001, the Company commenced a broad restructuring aimed at
achieving profitability and positive cash flow in its fiscal year 2002.
Accordingly, in fiscal year 2001, the Company established a $618,000 liability
for future cash expenditures associated with this restructuring. During the
current fiscal quarter, the Company charged $190,000 against this liability. The
Company anticipates that the remainder of this liability will be substantially
paid in the second quarter of the current fiscal year.

INCOME TAXES
The Company has estimated its annual effective tax rate at 0% due to uncertainty
over the level of earnings in fiscal year 2002. Also, the Company has net
operating loss carry-forwards for income tax reporting purposes for which no
income tax benefit has been recorded due to uncertainty over generation of
future taxable income.

RECENT ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Accounting Standards No. 142, "Accounting for Goodwill" ("SFAS 142"). SFAS
142 establishes accounting standards for existing goodwill related to purchase
business combinations. Under the Statement, the Company would discontinue the
periodic amortization of goodwill effective with the adoption of the Statement.
Also, the Company would have to test any remaining goodwill for possible
impairment within the first six months of adopting the Statement based on new
valuation criteria set forth in the Statement. Based on information available,
the Company estimates that annual amortization expense will be reduced
approximately $920,000 excluding any potential impairment charge which may
result from the implementation of the new impairment test criteria or
reclassification of goodwill to other intangible assets. The Statement becomes
effective in 2003.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments" ("SFAS 133"). SFAS 133 establishes
accounting and reporting standards for derivative instruments and for hedging
activities. SFAS 133 requires that an entity recognize all derivatives as either
assets or liabilities and measure those instruments at fair market value. Under
certain circumstances, a portion of the derivative's gain or loss is initially
reported as a component of other comprehensive income and subsequently
reclassified into income when the transaction affects earnings. For a derivative
not designated as a hedging instrument, the gain or loss is recognized in income
in the period of change. SFAS 133 is effective for fiscal quarters of years
beginning after June 15, 2000 and requires application prospectively. Presently,
the Company does not use derivative instruments either in hedging activities or
as investments. Accordingly, the adoption of SFAS 133 had no impact on the
financial position or results of operations.

In March 2000, the FASB issued interpretation No.44 ("FIN 44"), "Accounting for
Certain Transactions Involving Stock Compensation, an Interpretation of APB
Opinion No. 25". FIN 44 clarifies the application of APB Opinion No. 25 for (a)
the definition of employee for purposes of applying APB Opinion No. 25, (b) the
criteria for determining whether a plan qualifies as a non-compensatory plan,
(c) the accounting consequences of various modifications to the previously fixed
stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 2, 2000
but certain conclusions cover specific events that occur after either December
15, 1998 or January 12, 2000. The adoption of FIN 44 did not have an affect on
the Company's financial statements.


                                       15
<PAGE>   16

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 which summarizes certain of the SEC staff's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The company adopted Staff Accounting Bulletin No. 101
effective October 1, 2000. The adoption of this guidance did not have a material
impact on the Company's results of operations or financial position; however,
the guidance may impact the way in which the company will account for future
transactions.

OTHER FACTORS
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.

THE COMPANY CONTINUES TO EXPERIENCE SEVERE CASH FLOW PROBLEMS RESULTING FROM
REDUCED SALES AND SLOW COLLECTIONS. FURTHER, THE COMPANY'S INDEPENDENT AUDITORS
HAVE INCLUDED A PARAGRAPH IN THEIR OPINION WHICH INDICATES THAT, BASED ON RECENT
OPERATING LOSSES, ALONG WITH EXISTING WORKING CAPITAL AND ACCUMULATED DEFICITS,
THERE IS SUBSTANTIAL DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A GOING
CONCERN. SEE "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" IN THE COMPANY'S LATEST ANNUAL REPORT ON FORM 10-K

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 LATEST ANNUAL REPORT ON FORM 10-K.


                                       16
<PAGE>   17

PART II.  OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS

A supplier of parts for the Company's integrated access device product line has
filed an action against the Company. The Plaintiff seeks $96,581 for goods sold
and delivered, $280,662 for goods allegedly manufactured but not yet delivered
and $380,015 for parts allegedly ordered by Plaintiff to fulfill anticipated
orders. The Company filed its answer to the complaint on June 15, 2001 and
intends to vigorously defend this case.

On January 29, 2001, two individuals holding subordinated senior notes totaling
$1,000,000 commenced an action in the Circuit Court, Cook County, Illinois
against the Company, Cronus, certain former principal shareholders of Cronus and
a liquidating trust established by Cronus and its trustees seeking repayment of
the notes, together with accrued interest. FastComm has filed an answer and
counterclaim. In connection with this lawsuit, two co-defendants have filed
cross-claims for indemnification against the Company. The Company has denied
liability for indemnification in the circumstances of the lawsuit. All motions
and discovery have been stayed pending the results of settlement discussions.

The Company was recently sued in Federal District Court N.D. Illinois by Richard
L. Abrahams, as Trustee of the R.L.A. 1993 Trust (the "Trust"). The action is
for an alleged breach of contract entered into by the Company and the Trust in
March 2000 in connection with the Cronus acquisition. The trust seeks a
declaratory judgment stating that the Company must issue to it, approximately
628,000 shares of common stock, which it contends, are due under the agreement,
together with unspecified damages and costs.

The Company has been engaged in settlement discussions with the plaintiffs in
each of the two previously mentioned actions and believes that it has reached
tentative settlement agreements in each case which it expects to finalize in the
second fiscal quarter. The proposed terms of these agreements would not have a
material adverse impact on the Company's financial statements.

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.

<PAGE>   18


                                   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)







                                                         /s/ Peter C. Madsen
Date: September 11, 2001                            By:
Peter C. Madsen                                         ------------------------
President,  Chief Executive Officer
and Chairman of the Board of Directors
 (Principal Executive Officer)






                                                         /s/ Mark H. Rafferty
Date: September  11, 2001                           By:
Mark H. Rafferty                                        ------------------------
Vice President, Chief Financial Officer
Treasurer,  Secretary and Director
(Principal Financial and Accounting Officer)


                                       18