UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q/A

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

   For the quarter ended                       Commission File Number 0-21138
     September 30, 1998


                               BOCA RESEARCH, INC.
             (Exact name of registrant as specified in its charter)


           Florida                                    59-2479377
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

    1377 Clint Moore Road
     Boca Raton, Florida
    (Address of principal                                    33487
     executive offices)                                    (Zip Code)

               Registrant's telephone number, including area code:
                                 (561) 997-6227


        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___
    -

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

                                                            Outstanding as of
          Class                                             November 13, 1998
          -----                                             -----------------
Common stock, par value
    $.01 per share                                              8,756,487 


                                      - 1 -
<PAGE>

                               BOCA RESEARCH, INC.
               Form 10-Q/A For The Quarter Ended September 30, 1998

                                      INDEX
                                                                         Page
                                                                         ----
Part I. FINANCIAL INFORMATION
  Item 1. Financial Statements

    Condensed Consolidated Balance Sheets
     (unaudited) as of September 30, 1998
     (As Restated) and December 31, 1997 ......................            3

    Condensed Consolidated Statements of Income
     (unaudited) for the three and nine months
     ended September 30, 1998 (As Restated) and 1997 ..........            4

    Condensed Consolidated Statements of Cash Flows
     (unaudited) for the nine months ended
     September 30, 1998 (As Restated) and 1997 ................            5

    Notes to Condensed Consolidated
     Financial Statements (unaudited) .........................            6

  Item 2. Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations .........................................            13


Part II. OTHER INFORMATION
  Item 1.      Legal Proceedings...............................            26

  Items 2-3.   Not applicable .................................            26


  Item 4.      Submission of Matters to a Vote of
                Security Holders ..............................            26

  Item 5.      Other Information ..............................            26

  Item 6.      Exhibits and Reports on Forms 8-K ..............            27

  Signatures ..................................................            28


                                      - 2 -
<PAGE>

PART I. Item 1.

                               BOCA RESEARCH, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                 (In thousands except share and per share data)
<TABLE>
<CAPTION>
                                                                 September 30,
                                                                     1998        December 31,
                                                                  As Restated        1997
                                                                  -----------        ----
                                     ASSETS
<S>                                                              <C>             <C>
Current assets:
  Cash and cash equivalents ...............................       $  5,328        $  8,205
  Trade receivables, net ..................................         20,151          11,723
  Inventory, net ..........................................          9,098          14,876
  Prepaid expenses and other current assets ...............            820             470
  Prepaid and deferred income taxes .......................          2,052           9,214
                                                                    ------          ------
    Total current assets ..................................         37,449          44,488

  Property and equipment, net .............................          4,092           5,540
  Goodwill and other intangible assets ....................          5,374              --
  Other assets ............................................            627             191
                                                                    ------          ------
    Total assets ..........................................       $ 47,542        $ 50,219
                                                                    ======          ======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable ........................................       $ 11,365        $  6,546
  Notes payable ...........................................          5,955              --
  Accrued expenses and other current liabilities ..........          4,290           3,092
                                                                     -----           -----
    Total current liabilities .............................       $ 21,610        $  9,638
                                                                    ------           -----
Commitments and contingencies

Stockholders' equity:
  Common stock, 25,000,000 $.01 par value shares
   authorized, 8,756,487 issued and outstanding
   at September 30, 1998, 8,725,079 issued and
   outstanding at December 31, 1997 .......................             87              87
  Additional paid-in capital ..............................         26,045          25,915
  Retained earnings .......................................           (200)         14,579
                                                                    ------          ------
    Total stockholders' equity.............................         25,932          40,581
                                                                    ------          ------
      Total liabilities and stockholders' equity.........         $ 47,542        $ 50,219
                                                                    ======          ======
</TABLE>

           See notes to condensed consolidated financial statements.


                                      - 3 -
<PAGE>

                               BOCA RESEARCH, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (In thousands except per share data)
<TABLE>
<CAPTION>
                                                                         Three  Months              Nine Months
                                                                      Ended September 30,       Ended September 30,
                                                                      -------------------       -------------------
                                                                  As Restated                As Restated
                                                                      1998          1997         1998       1997
                                                                      ----          ----         ----       ----
<S>                                                                  <C>           <C>           <C>        <C>    
Net sales .................................................          $22,789       $18,549       $51,615    $53,660
Cost of goods sold ........................................           19,221        17,138        51,227     51,320
                                                                      ------        ------        ------     ------
Gross profit ..............................................            3,568         1,411           388      2,340
                                                                       -----         -----           ---      -----
Operating expenses:
  Research and development ................................              872           690         2,105      2,104
  Selling, general and administrative .....................            4,880         3,431        10,803     12,384
  In-process research and development .....................               --            --         2,800         --
                                                                       -----         -----        ------     ------
    Total operating expenses ..............................            5,752         4,121        15,708     14,488
                                                                       -----         -----        ------     ------
Loss from operations ......................................           (2,184)       (2,710)      (15,320)   (12,148)
Non-operating income, net .................................              169           241           541        603
                                                                       -----         -----        ------     ------
Loss before income tax benefit ............................           (2,015)       (2,469)      (14,779)   (11,545)
Income tax benefit ........................................               --          (864)           --     (4,041)
                                                                       -----         -----        ------      -----
Net loss...................................................         ($ 2,015)     ($ 1,605)     ($14,779)  ($ 7,504)
                                                                       =====         =====        ======      =====
Net loss per share (Basic and Diluted).....................           ($0.23)       ($0.18)       ($1.69)    ($0.86)
                                                                        ====          ====          ====       ====
Weighted average shares outstanding........................            8,756         8,725         8,747      8,716
                                                                       =====         =====         =====      =====
</TABLE>

            See notes to condensed consolidated financial statements.


                                      - 4 -
<PAGE>

                               BOCA RESEARCH, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                            Nine Months
                                                                        Ended September 30,
                                                                        -------------------

                                                                    As Restated
                                                                        1998           1997
                                                                        ----           ----
<S>                                                                  <C>             <C>
Cash provided by (used in):
Operating activities:
  Net loss ................................................          ($14,779)       ($7,504)
  Adjustments for non-cash charges ........................             5,612          2,202
  Changes in assets and liabilities .......................            10,984          8,474
                                                                       ------          -----
    Net cash provided by operating activities .............             1,817          3,172
                                                                        -----          -----
Investing activities:
  Cash paid for acquisition...............................            (4,580)             --
  Capital expenditures....................................              (244)           (987)
                                                                       -----             ---
    Net cash used in investing activities.................            (4,824)           (987)
                                                                       -----             ---

Financing activities - Exercise of options ...............               130             321
                                                                       -----           -----
Net increase (decrease) in cash and cash equivalents .....            (2,877)          2,506
Cash and cash equivalents, beginning of period ...........             8,205           7,826
                                                                       -----           -----
Cash and cash equivalents, end of period .................           $ 5,328         $10,332
                                                                       =====          ======
</TABLE>

            See notes to condensed consolidated financial statements.


                                      - 5 -
<PAGE>

                               BOCA RESEARCH, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Basis of Presentation

        The condensed consolidated financial statements have been prepared by
the Company in accordance with the rules and regulations of the Securities and
Exchange Commission regarding interim financial reporting and, accordingly, they
do not include all of the information and disclosures required by generally
accepted accounting principles. In the opinion of management, the condensed
consolidated financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position of
the Company as of September 30, 1998, and the results of its operations and its
cash flows for the three and nine month periods ended September 30, 1998 and
1997. These results have been determined on the basis of generally accepted
accounting principles and practices applied consistently with those used in the
preparation of the Company's 1997 audited consolidated financial statements.

        The accompanying financial statements should be read in conjunction with
the Company's most recent audited consolidated financial statements and notes
thereto for the year ended December 31, 1997. The results of operations for the
three and nine month periods ended September 30, 1998 are not necessarily
indicative of the results to be expected for the full year.

        Certain prior year amounts have been reclassified to conform to the
current presentation.

Supplemental Cash Flow Information

        Cash payments (net of refunds) for income taxes were ($7,162,438) and
($1,339,171) in the nine month periods ended September 30, 1998 and 1997,
respectively.

Comprehensive Income (Loss)

        Comprehensive income includes all changes in equity during a period
except those resulting from investment by owners and distributions to owners.
The Company's comprehensive income (loss) equals its net loss for the three and
nine months ended September 30, 1998 and 1997, and net loss is the only
component of comprehensive income (loss) for such periods.

                                      - 6 -
<PAGE>

                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (con't)
                                   (Unaudited)

Current Assets

        Accounts receivable are included in the condensed consolidated balance
sheets net of allowances and consist of the following (in thousands):

                                                  September 30,    December 31,
                                                      1998             1997
                                                      ----             ----
Accounts receivable ............................    $24,885          $14,423
Allowance for sales returns, allowances and
 price protection ..............................     (2,304)          (1,300)
Allowance for doubtful accounts ................     (2,430)          (1,400)
                                                      -----            -----
                                                    $20,151          $11,723
                                                     ======           ======

        Included in the accounts receivable balance is $190,402 in receivables
from PowerTelBOCA Pvt., Ltd. ("PowerTel"), a joint venture in India in which the
Company has a 20% ownership interest. Sales to MBf/Boca Asia Pacific Sdn Bhd, a
joint venture in Malaysia in which the Company has a 50% ownership interest, and
PowerTel in the three and nine month periods ended September 30, 1997 were
approximately $708,000 and $2,517,000, respectively. Sales to these related
parties in the three and nine month periods ended September 30, 1998 were
approximately $57,000 and $229,000, respectively. The Company has agreed to
payment terms of 180 days for PowerTel. MBf Boca Asia Pacific is in the process
of winding down its operations.

        Inventories included in the condensed consolidated balance sheets
consist of the following (in thousands):

                                                  September 30,    December 31,
                                                      1998             1997
                                                      ----             ----
Raw materials ..................................    $ 9,005          $11,075
Work in process ................................      3,454            4,925
Finished goods .................................      1,819            2,376
Inventory reserves .............................     (5,180)          (3,500)
                                                      -----            -----
                                                    $ 9,098          $14,876
                                                      =====           ======

                                      - 7 -
<PAGE>

                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (con't)
                                   (Unaudited)

Property and Equipment

        Property and equipment is included in the condensed consolidated balance
sheets net of accumulated depreciation of $12,984,966 at September 30, 1998 and
$10,709,231 at December 31, 1997.

Line of Credit

        The Company entered into a two-year secured revolving line of credit
agreement on November 9, 1998, which permits borrowings of the lesser of
$5,000,000 or 60% of qualified accounts receivable and 20% of eligible
inventory. The interest rate during the first year of the agreement is 1% in
excess of the prime rate. The loan agreement requires the Company to maintain
certain financial ratios, limits the incurrence of additional debt, and
prohibits payment of dividends without the lender's consent.

Commitments and Contingencies

        As reported in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, the Company received correspondence from IBM
Corporation ("IBM") alleging that certain of the Company's products infringed
the patent rights of IBM. The Company has resolved the matter by entering into a
licensing agreement with IBM. This licensing agreement grants the Company, in
return for an annual royalty, a license to the patented intellectual property
with respect to which IBM alleged patent infringement as well as a broader
portfolio of IBM's technology. The royalty payable under the licensing agreement
is variable depending upon the Company's annual revenues and is anticipated to
be $25,000 in 1998.

         As reported in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, a former shareholder of the Company filed an
action in the United States District Court for the Southern District of Florida
against the Company and Anthony F. Zalenski, its President and Chief Executive
Officer in March, 1997. The former shareholder claimed that he relied on certain
statements made directly to him by Mr. Zalenski and certain other statements in
deciding not to sell his shares of the Company's Common Stock. The former
shareholder claimed that such statements were false and misleading and give rise
to claims under the Federal securities law and Florida common law. The former
shareholder sought damages for his trading losses, which were alleged to be in
excess of $1 million. Such action was settled in September, 1998 by payment made
by the Company's directors and officers liability insurance carrier.

                                      - 8 -
<PAGE>

                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (con't)
                                   (Unaudited)

        The Company receives communications from time to time alleging that
certain of the Company's products infringe the patent rights of other third
parties. The Company cannot predict the outcome of any such claim which may
arise in the future, or the effect of any such claim on the Company's operating
results or financial condition.

        On June 2, 1998, the Company entered into a lease agreement for a 45,647
sq. ft. building located in Sunnyvale, California. The lease term is for 85
months beginning October 1, 1998 at a base rate of $73,035 per month. The base
rate will be increased for tenant improvements and the property operating
expenses. This facility will be used for research and development, sales and
marketing, technical support and administration.

Stockholders' Equity

        In January and July 1998, 31,408 shares were issued in connection with
the exercise of options granted under the 1992 Stock Purchase Plan. Aggregate
proceeds received from these exercises were $130,704.

Stock Option Plan

        During the nine month period ended September 30, 1998, the Company
granted options to purchase 692,381 shares at exercise prices ranging from $1.59
to $6.69 to both new and existing employees and directors.

        During the nine month period ended September 30, 1998, 406,118 stock
options were canceled.

                                      - 9 -
<PAGE>

                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (con't)
                                   (Unaudited)

Acquisition

        On June 18, 1998, the Company consummated, through a wholly-owned
subsidiary, the acquisition of the modem business of Global Village
Communication, Inc. ("Global Village"), in exchange for $9,855,206 in cash and
notes. A $4,000,000 cash payment was made at closing and two additional payments
of $3,000,000 each are due Global Village on September 30, 1998 and on December
31, 1998. The notes payable relating to the two $3,000,000 payments are
non-interest bearing and interest on these notes has been imputed at the rate of
6%. The $3,000,000 payment due on September 30, 1998 was paid on October 2,
1998. The Company purchased intellectual property, including the Global Village
name, logo and trademarks, as well as the modem hardware and software products,
and the inventory, receivables and other assets of the modem business. The
Company also assumed the liabilities of the modem business, including
responsibility for product warranty, technical support, product returns, ongoing
marketing and sales programs, and certain accounts payable and accrued
liabilities. The Company also received a warrant to purchase up to 425,000
shares of Global Village common stock at an exercise price of $1.0003 per share.
Subsequent to the closing of the transaction, Global Village changed its
corporate name to OneWorld Systems, Inc.

        The acquisition was recorded as a purchase with the purchase price
allocated to the acquired assets, assumed liabilities and in-process research
and development as follows:

         Accounts receivable, net                                 $8,740,743
         Inventory                                                 2,131,822
         Other current assets                                         62,000
         Property, plant and equipment                               589,435
         Tradename/marketing intangible asset                      2,300,000
         Existing technology intangible asset                      1,500,000
         Goodwill                                                  1,425,206
         Warrants                                                    140,000
         Accounts payable                                         (7,776,000)
         Accrued expenses                                         (2,058,000)
         In-process research and development                       2,800,000
                                                                   ---------
                                                                  $9,855,206
                                                                   =========

         Direct acquisition costs associated with this transaction, totalling
$580,000, have also been capitalized to goodwill. Goodwill is being amortized
over a five year period. Existing technology is being amortized over a two year
period. The tradename/marketing intangible asset is being amortized over a seven
year period.

                                     - 10 -
<PAGE>

                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (con't)
                                   (Unaudited)

         The allocation of the purchase price is subject to adjustment as
additional information with respect to certain estimates made of the acquired
assets and assumed liabilities is determined.

Restatement of the Three and Nine Month Periods ended September 30, 1998

         Subsequent to the issuance of the Company's September 30, 1998
financial statements, the Company's management revised the amount of the
purchase price which was allocated to in-process research and development in
accounting for the acquisition of the modem business of Global Village on June
18, 1998. The revised allocation is based upon methods prescribed in a letter
from the Securities and Exchange Commission ("SEC") sent to the American
Institute of Certified Public Accountants in September 1998. The letter sets
forth the SEC's views regarding the valuation methodology to be used in
allocating a portion of the purchase price to acquired in-process research and
development at the date of acquisition. As a result of the revised allocation,
the Company's financial statements for the three and nine month periods ended
September 30, 1998 have been restated to reduce the amount of the acquired
in-process research and development expensed by $ 1,000,000 and to increase
goodwill by $ 1,000,000. The change had no impact on net cash flows provided by
operations. The effect of the restatement on the accompanying financial
statements is as follows:

                                      - 11 -
<PAGE>

                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (con't)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                   (In thousands except for per share data)

                                                                     As Previously               As
                                                                       Reported               Restated
                                                                       --------               --------
<S>                                                                    <C>                    <C>
At September 30, 1998

         Goodwill and other intangible assets.................         $4,432                 $5,374
         Total assets.........................................         46,600                 47,542
         Retained earnings (deficit)..........................         (1,142)                  (200)
         Total stockholders' equity...........................         25,000                 25,932
         Total liabilities and stockholders' equity...........         46,600                 47,542


For the three months
ended September 30, 1998

         Selling, general and administrative..................         $4,830                 $4,880
         Total operating expenses.............................          5,702                  5,752
         Loss from operations.................................         (2,134)                (2,184)
         Loss before income tax benefit.......................         (1,965)                (2,015)
         Net loss.............................................         (1,965)                (2,015)
         Net loss per share (Basic and Diluted)...............          (0.22)                 (0.23)


For the nine months
ended September 30, 1998

         Selling, general and administrative..................         $10,745                $10,803
         In-process research and development..................           3,800                  2,800
         Total operating expenses.............................          16,650                 15,708
         Loss from operations.................................         (16,262)               (15,320)
         Loss before income tax benefit.......................         (15,721)               (14,779)
         Net loss.............................................         (15,721)               (14,779)
         Net loss per share (Basic and Diluted)...............           (1.80)                 (1.69)

</TABLE>
                                     - 12 -
<PAGE>

Item 2.

                               BOCA RESEARCH, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The discussion and analysis below contains trend analysis and other
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
Company's actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors set forth below and
elsewhere in this Report.

        As an aid to reviewing the Company's results of operations for the three
and nine months ended September 30, 1998 and 1997, the following table sets
forth the financial information as a percent of net sales and as a percent of
change when compared to the earlier period:
<TABLE>
<CAPTION>
                                                     Three Months                     Nine Months
                                                  Ended September 30,              Ended September 30,
                                                As Restated             Percent  As Restated             Percent
                                                    1998      1997      Change       1998      1997      Change
                                                    ----      ----      ------       ----      ----      ------
<S>                                               <C>       <C>         <C>        <C>       <C>         <C>
Net sales ...................................      100.0%    100.0%      22.9%      100.0%    100.0%     (3.8)%
Cost of goods sold ..........................       84.3      92.4       12.2        99.2      95.6      (0.2)
                                                    ----      ----                   ----      ----
  Gross profit ..............................       15.7       7.6      152.9         0.8       4.4      (83.4)
                                                    ----       ---                    ---       ---
Operating expenses:
  Research and development ..................        3.8       3.7       26.4         4.1       3.9        0.1
  Selling, general and administrative .......       21.4      18.5       42.2        20.9      23.1      (12.8)
  In-process research & development .........        0.0       0.0         *          5.4       0.0         *
                                                    ----      ----                   ----      ----
    Total operating expenses ................       25.2      22.2       39.6        30.4      27.0        8.4
                                                    ----      ----                   ----      ----
Loss from operations ........................       (9.5)    (14.6)     (19.4)      (29.6)    (22.6)      26.1
Non-operating income, net ...................        0.7       1.3      (29.9)        1.0       1.1      (10.3)
                                                     ---      ----                   ----      ----
Loss before income tax benefit ..............       (8.8)    (13.3)     (18.4)      (28.6)    (21.5)      28.0
Income tax benefit ..........................        0.0      (4.7)        *          0.0      (7.5)        *
                                                     ---       ---                   ----      ----
Net loss ....................................       (8.8)%    (8.7)%     25.5%      (28.6)%   (14.0)%     96.9%
                                                     ===       ===                   ====      ====
*Not applicable
</TABLE>

                                     - 13 -
<PAGE>

Results of Operations

     NET SALES. The Company's net sales increased by 22.9% to $22,789,000 in the
three months ended September 30, 1998 from $18,549,000 in the three months ended
September 30, 1997. For the nine months ended September 30, 1998, net sales
decreased by 3.8% to $51,615,000 from $53,660,000 for the comparable period in
1997. The sales fluctuations in the three and nine month periods ended September
30, 1998 over the comparable period in 1997 is shown below by product category.
Included in the data communications product category below is net sales of
$12,418,000 of Global Village branded product during the third quarter of 1998.
The Company acquired the modem business of Global Village as of June 18, 1998.
Net sales of the Global Village branded product for the period from June 18 to
June 30, 1998 amounted to $1,434,000.

<TABLE>
<CAPTION>
                                                    Three Months                             Nine Months
                                                 Ended September 30,                      Ended September 30,
                                                 -------------------                      -------------------
                                                   1998        1997                         1998        1997
                                                   ----        ----                         ----        ----
                                                                         (In Millions)
<S>                                               <C>         <C>                          <C>        <C>
Data Communications ...........                   $18.4       $10.5                        $33.1      $38.9
Custom Manufacturing ..........                     2.4         4.4                         11.3        4.4
Multimedia ....................                      --         0.1                           --        0.9
Networking ....................                     0.4         1.3                          1.3        3.0
Video Graphics ................                     0.2         0.5                          0.7        1.4
I/O, IDE & Multiport ..........                     1.1         1.7                          3.6        4.7
Video Conferencing ............                      --          --                          0.2        0.3
ISDN ..........................                      --          --                           --        0.1
Internet Access Device ........                     0.3          --                          1.4         --
                                                    ---        ----                         ----       ----
                                                  $22.8       $18.5                        $51.6      $53.7
                                                   ====        ====                         ====       ====
</TABLE>


         Excluding the net sales associated with the acquisition of the modem
business of Global Village, the sales decrease in the three months and nine
months ended September 30, 1998 compared to the comparable periods in 1997 was
primarily attributable to decrease in sales of data communications products,
however the product categories of networking, video graphics, I/O, IDE, and
Multiport also experienced a decline in sales. The decrease in sales in these
categories was partially offset by an increase in sales in the category of
custom manufacturing and Internet access devices.

         During the third quarter of 1998, net sales of the Global Village
branded product were $12,418,000. Of this total, $5,128,000 represented sales to
Apple Computer, Inc. This amount represents approximately 23% of net sales
during the third quarter of 1998. Thus far in the fourth quarter of 1998 there
are no sales to Apple, and the Company is uncertain as to the outlook for any
recurrent Apple sales.

         The Company manufactures several categories of Internet access devices
which allow for Internet access via a TV, including a product manufactured for a
major electronic manufacturing customer. For the nine months ended September 30,
1998 revenue of

                                     - 14 -
<PAGE>

$2,700,000 for sales of this particular Internet access device to such customer
is included in custom manufacturing. The revenue of $2,700,000 was recorded
entirely in the three months ended March 31, 1998 and the Company did not derive
any revenue from this customer in the quarters ended June 30, 1998 and September
30, 1998 and does not anticipate deriving any revenues from this customer for
the balance of 1998. For the three months ended September 30, 1998 sales in the
custom manufacturing category were to one customer.

         Included in the category of Internet access devices are sales of a
model of this product which was developed by the Company and sold under the Boca
Research name or co-branded. The Company is placing emphasis on this category,
however sales decreased from $647,000 in the three months ended June 30, 1998 to
$260,000 in the three months ended September 30, 1998.

         Sales for the three months ended September 30, 1998 and the nine month
period ended September 30, 1998 were adversely affected by several factors,
including pricing pressure on all modem products, excess industry-wide channel
inventories of pre-standard 56Kbps product, and the slow adoption of 56Kbps
technology by consumers who realize that the 56Kbps product does not
significantly increase Internet downloading speed capability over the 33.6Kbps
product. The Company's diversification into Internet access devices and custom
manufacturing has not met expectations and has not offset the decline in the
Company's traditional core business.

         International sales were approximately $5.1 million for the three
months ended September 30, 1998 compared to $2.8 million for the three months
ended September 30, 1997. For the nine months ended September 30, 1998
international sales were $9.9 million compared to $11.3 million for the nine
months ended September 30, 1997.

     GROSS PROFIT. Gross profit was $3,568,000 for the three months ended
September 30, 1998 as compared to $1,411,000 for the three months ended
September 30, 1997 and increased as a percentage of net sales to 15.7% in the
three months ended September 30, 1998 from 7.6% in the three months ended
September 30, 1997. For the nine months ended September 30, 1998, gross profit
decreased to $388,000 from $2,340,000 in the nine months ended September 30,
1997. Gross profit as a percentage of net sales decreased to 0.8% for the nine
months ended September 30, 1998 from 4.4% for the nine months ended September
30, 1997. The gross profit percentage for the three months ended September 30,
1998 and nine months ended September 30, 1998 is being affected by several
factors including low utilization of the Company's manufacturing facilities,
aggressive channel pricing to reduce channel inventories of 33.6Kbps product and
prestandard 56Kbps product, competitive pressure in the OEM channel and the
custom manufacturing product category requiring the Company to compete with
offshore manufacturers which the Company believes have a cost advantage because
of currency devaluations and better purchasing power because of their larger
volumes. Most of the above factors have been adversely affecting the Company's
gross profit percentage since January 1, 1997. In the three months ended
September 30, 1998 the Company's gross profit was also impacted favorably by net
sales of $12,418,000 of the Global Village branded product, which have higher
gross margins associated with them

                                     - 15 -
<PAGE>

as compared to sales of Boca Research branded products. Of this total,
$5,128,000 represented sales to Apple Computer, Inc. This amount represents
approximately 23% of net sales during the third quarter of 1998. Thus far in the
fourth quarter of 1998 there are no sales to Apple, and the Company is uncertain
as to the outlook for any recurrent Apple sales. For the nine months ended
September 30, 1998 the Company recorded write downs of inventory and increases
in the inventory reserve as a charge to cost of goods sold in the amount of
$4,780,000. This was the result of excess inventories in the Company of older
technology product that has been determined to have limited sales value. In
particular the Company has seen a significant slow down in sales of 33.6Kbps
product and pre-standard 56Kbps product along with significant price erosion.
This has resulted in additional price protection, rebates and other allowances
to the distribution channel in order to reduce channel inventories which has a
negative impact on gross margins.

         The gross profit margins for the Company's products depend on a number
of factors, such as the degree of competition in the market for such products,
the product and channel mix (wholesale distributors and retailers versus OEM's),
component costs and manufacturing efficiencies and capacity utilization. In
addition gross profit margins on product categories differ. In particular,
custom manufacturing is typically a low profit margin business. Accordingly, the
Company's gross profit has varied substantially from quarter to quarter in the
past, and can be expected to continue to do so in the future. There will be
circumstances, which management anticipates will occur in the fourth quarter, in
which the Company accepts lower margin sales for purposes such as to reduce
inventories, and to utilize manufacturing capacity.

     RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased to $872,000 in the three months ended September 30, 1998 from $690,000
in the three months ended September 30, 1997. This represents an increase in
research and development expense as a percentage of net sales to 3.8% for the
three months ended September 30, 1998 from 3.7% for the three months ended
September 30, 1997. Research and development expenses increased to $2,105,000
for the nine months ended September 30, 1998 from $2,104,000 for the nine months
ended September 30, 1997. This represents an increase in research and
development expense as a percentage of net sales to 4.1% for the nine months
ended September 30, 1998 from 3.9% for the nine months ended September 30, 1997.
Research and development expenses increased in the three months ended September
30, 1998 versus the comparable period in 1997 primarily as the result of the
acquisition of the modem business of Global Village.

     SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to $4,880,000 in the three months ended
September 30, 1998 from $3,431,000 in the three months ended September 30, 1997.
Selling, general and administrative expenses as a percentage of net sales
increased to 21.4% in the three months ended September 30, 1998 from 18.5% in
the three months ended September 30, 1997. Selling, general and administrative
expenses decreased to $10,803,000 in the nine months ended September 30, 1998
from $12,384,000 in the nine months ended September 30, 1997. Selling, general
and administrative expenses as a

                                     - 16 -
<PAGE>

percentage of net sales decreased to 20.9% in the nine months ended September
30, 1998 from 23.1% in the nine months ended September 30, 1997. Selling,
general and administrative expenses increased in the three months ended
September 30, 1998 versus the comparable period in 1997 primarily as the result
of the acquisition of the modem business of Global Village. The Company's
expenses for the nine months ended September 30, 1998 compared to the nine
months ended September 30, 1997 were $260,000 lower for consulting fees and
expenses with ArgoQUEST, Inc. and $1,215,000 lower for advertising.

     IN-PROCESS RESEARCH AND DEVELOPMENT EXPENSES. On June 18, 1998, the
Company completed its acquisition of the modem business of Global Village in
exchange for $9,855,026 in cash and notes. The Company purchased certain of
Global Village's assets, technology, operations and assumed certain of its
liabilities. This transaction was accounted for using the purchase method of
accounting with the purchase price being partially allocated to purchased
technologies and intangible assets. $2,800,000 of the total purchase price
represented the value of in-process research and development that had not yet
reached technological feasibility and had no alternative future use and, as
such, was recorded as a non-recurring charge for in-process research and
development. The value attributed to the in-process research and development was
determined by an independent appraisal.

LIQUIDITY AND CAPITAL RESOURCES

         In the nine months ended September 30, 1998, the Company's working
capital decreased by $19,011,000 from December 31, 1997. This decrease was
represented by a decrease in inventories of $5,778,000, other current assets of
$6,812,000 and cash of $2,877,000, and an increase in current liabilities of
$11,972,000 offset by an increase in accounts receivables of $8,428,000. The
Company's operations provided cash of $1,817,000 for the nine months ended
September 30, 1998. In May 1998, the Company received a federal income tax
refund in the amount of $7,125,000 from the Internal Revenue Service which
accounted for the decrease in other current assets noted above.

         The Company entered into a two-year secured revolving line of credit
agreement on November 9, 1998, which permits borrowings of the lesser of
$5,000,000 or 60% of qualified accounts receivable and 20% of eligible
inventory. The interest rate during the first year of the agreement is 1% in
excess of the prime rate. The loan agreement requires the Company to maintain
certain financial ratios, limits the incurrence of additional debt, and
prohibits payment of dividends without the lender's consent.

                                     - 17 -
<PAGE>

         On June 18, 1998, the Company consummated the acquisition of the modem
business of Global Village in exchange for $9,855,206 in cash and notes. A
$4,000,000 cash payment was made at closing and two additional payments of
$3,000,000 each are due Global Village on September 30, 1998 and on December 31,
1998. The notes payable relating to the two $3,000,000 payments are non-interest
bearing and interest on these notes has been imputed at the rate of 6%. The
$3,000,000 payment due on September 30, 1998 was paid on October 2, 1998.

         The Company regularly evaluates acquisitions of business, technologies
or products complementary to the Company's business. In the event that the
Company effects one or more acquisitions, the Company's cash balances may be
utilized to finance such acquisitions and additional sources of liquidity such
as debt or equity financing may be required to finance such acquisitions or to
meet working capital needs. There can be no assurance that additional capital
beyond the amounts currently forecasted by the Company will not be required nor
that any such required capital will be available on terms acceptable to the
Company, if at all, at such time or times as required by the Company.

YEAR 2000 MATTERS.

         Many currently installed computer systems and software products are
coded to accept only two-digit entries in the date code field and cannot
distinguish 21st century dates from 20th century dates. These date code fields
will need to distinguish 21st century dates from 20th century dates and, as a
result, many companies' software and computer systems may need to be upgraded or
replaced in order to comply with such "Year 2000" requirements.

     STATE OF READINESS. The Company is in the process of evaluating the year
2000 readiness of the information technology systems used in its operations ("IT
Systems") and its non-IT Systems, such as building security, voice mail and
other systems. The Company currently anticipates that the Project will cover the
following phases: (i) evaluation of all IT Systems, and non-IT Systems; (ii)
assessment of repair or replacement requirements; (iii) repair or replacement;
(iv) testing; (v) implementation; and (vi) creation of contingency plans in the
event of year 2000 failures.

         The Company has completed its assessment of all current versions of its
Products and believes they are year 2000 compliant. The Company has also
evaluated all hardware products sold since 1995 and determined them to be year
2000 compliant. Even so, the assessment of whether a complete system or device
in which a Product is embedded will operate correctly for an end-user depends in
large part on the year 2000 compliance of the system's other components, most of
which are supplied by parties other than the Company. The supplier of the
Company's current financial and accounting software has informed the Company
that such software is year 2000 compliant. This supplier has undergone an
independent year 2000 compliance audit and the Company has received a copy of
their year 2000 compliant certification. The Company's employees have also
successfully tested this software and agree that it is

                                     - 18 -
<PAGE>

year 2000 compliant. The Company relies, both domestically and internationally,
upon various vendors, governmental agencies, utility companies,
telecommunications service companies, delivery service companies and other
service providers who are outside of the Company's control. There is no
assurance that such parties will not suffer a year 2000 business disruption,
which could have a material adverse effect on the Company's financial condition
and results of operations.

         During the first half of fiscal 1999, the Company intends to circulate
a questionnaire to vendors and customers with whom the Company has material
relationships to obtain information about their year 2000 compliance and the
Company plans to continue its evaluation of its IT Systems and non-IT Systems.
Until such information is obtained, the Company will not be able to effectively
evaluate whether any remediation efforts will be required with respect to its IT
Systems or non-IT Systems.

     COSTS. To date, the Company has not incurred any material expenditures in
connection with identifying or evaluating year 2000 compliance issues. At this
time, the Company does not possess the information necessary to estimate the
potential impact of year 2000 compliance issues relating to its IT-Systems,
non-IT Systems, prior versions of its Products, its vendors, its customers, and
other parties. Such impact, including the effect of a year 2000 business
disruption, could have a material adverse effect on the Company's financial
condition and results of operations.

     CONTINGENCY PLAN. The Company has not yet developed a year 2000-specific
contingency plan. The Company intends to prepare a contingency plan with respect
to its financial and accounting software no later than mid-1999. In addition, if
further year 2000 compliance issues are discovered, the Company then will
evaluate the need for one or more contingency plans relating to such issues.

CERTAIN FACTORS THAT MAY AFFECT FUTURE PERFORMANCE.

         In addition to the other information contained in this Report, the
following are important factors that should be considered carefully in
evaluating the Company and its business.

     NEW PRODUCTS, TECHNOLOGICAL CHANGES AND INVENTORY MANAGEMENT. The markets
for the Company's products are characterized by rapidly changing technology,
evolving industry standards and short product life cycles. The Company's success
depends upon its ability to enhance its existing products and to introduce new
products with features that meet changing end user requirements. Moreover,
because of short product life cycles coupled with long lead times for many
components used in the Company's products, the Company may not be able to
quickly reduce its production or inventory levels in response to unexpected
shortfalls in sales or, conversely, to increase production or inventory levels
in response to unexpected demand. There can be no assurance that the Company
will be successful in identifying new markets, in developing, manufacturing and
marketing new products, or in enhancing its existing

                                     - 19 -
<PAGE>

products, either internally or through strategic relationships with third
parties. The Company's business would be adversely affected if the Company were
to incur delays in developing new products or enhancing existing products, if
the Company experiences delays in obtaining any required regulatory approvals
for its products or if such new products or enhancements did not gain market
acceptance. In addition, there can be no assurance that products or technologies
developed by others will not render the Company's products or technologies
noncompetitive or obsolete. The recent introduction of competing technologies on
the 56Kbps modem and the marketing activities to promote the advantages of such
technology heightened the competitive pressures in the industry. Each increase
in speed in modem technology has had transition issues; however, the Company
believes that the transition to 56Kbps technology is resulting in more extensive
upgrade policies which may result in lower gross margins. Moreover, price
decreases have occurred earlier in the 56Kbps product cycle than occurred with
14.4Kbps and 28.8Kbps products.

         Sales of individual products and product lines are typically
characterized by rapid declines in sales, pricing and margins toward the end of
the respective product's life cycle, the precise timing of which may be
difficult to predict. As new products are planned and introduced, the Company
attempts to monitor closely the inventory of older products and to phase out
their manufacture in a controlled manner. Nevertheless, the Company could
experience unexpected reductions in sales of older generation products as
customers anticipate the availability of new products. These reductions could
give rise to additional charges for obsolete or excess inventory, returns of
older generation products by distributors or substantial price protection
charges. To the extent that the Company is unsuccessful in managing product
transitions, its business and operating results could be materially adversely
affected.

         Because the majority of the Company's products are used in PCs and
computer networks, the Company's future operating results could be adversely
affected by changes in the PC and computer networking markets, including major
technological developments or fluctuations in the growth rate. In addition,
there is a trend in original PC system manufacturing to integrate additional
functionality onto the system board of the PC or to utilize chipsets which
incorporate additional functionality, thereby decreasing the market for PC
enhancement products. Moreover, it is a concern in the PC industry that the
penetration of PCs into the home has flattened at 40% and that PC sales growth
will slow as PCs become more of a replacement market. This could impact modem
sales to the Company's OEM customers in the future. Any decrease in the markets
for PC enhancement or networking products or reduction in the growth rates in
such markets could have a material adverse effect on the Company's operating
results.

     POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS. The Company's quarterly
operating results have varied significantly, and may continue to vary
significantly, depending on a number of factors, some of which could adversely
affect the Company's operating results and the trading price of the Company's
Common Stock. These factors include the level of demand for the Company's
products, competitive pricing pressures, the timing of orders from and shipments
to major customers, the timing of new product

                                     - 20 -
<PAGE>

introductions by the Company and its competitors, the availability and pricing
of components for the Company's products, the timing of phase-outs of the
Company's products, variations in the Company's product mix and component costs,
variations in the proportion of sales made to wholesale distributors, OEMs and
retailers, product returns or price protection charges from customers, the
timing of sales of the Company's products to end users by the Company's
customers, seasonal promotions by the Company, its customers and competitors,
economic conditions prevailing within the computer industry and economic
conditions generally. Quarterly sales depend on the volume and timing of orders
received during a quarter, which are difficult to forecast. Customers generally
order products on an as-needed basis, and accordingly the Company has
historically operated with a relatively small backlog. Moreover, as is typical
for companies in the PC industry, a disproportionate percentage of the Company's
net sales in any quarter are typically generated in the last month of a quarter.
As a result, a shortfall in net sales in any quarter as compared to expectations
may not be identifiable until the end of the quarter. In addition, from time to
time, a significant portion of the Company's sales are derived from a limited
number of customers, the loss of one or more of which could adversely impact
operating results. There can be no assurance that the Company will be able to
return to its growth in sales or to profitability on a quarterly or annual
basis. The Company's expense levels are based, in part, on its expectations as
to future sales. If sales levels are below expectations, operating results may
be adversely affected, which would likely have an adverse effect on the trading
price of the Company's Common Stock.

     DEPENDENCE ON CUSTOM MANUFACTURING SALES. In the third quarter of 1997, the
Company began manufacturing products on a contract basis for other companies.
Custom manufacturing sales accounted for approximately 12% of the Company's net
sales for the year ended December 31, 1997 and increased to 22% of sales for the
nine months ended September 30, 1998. The Company has only recently begun custom
manufacturing and, accordingly, the Company has limited experience in the
management and operation of custom manufacturing services. Moreover, the
contract manufacturing industry is highly fragmented and intensely competitive.
In addition, the level and timing of orders placed by the Company's contract
manufacturing customers vary due to customer attempts to manage inventory,
changes in the customer's manufacturing strategy and variation in demand for the
product. For all of these reasons, there can be no assurance that the Company
will be successful in developing its custom manufacturing services. The
inability of the Company to expand its custom manufacturing services could
adversely affect the Company's business, results of operations or financial
condition. As of September 30, 1998 the Company has only one custom
manufacturing customer. Sales to this customer will most likely be less in the
fourth quarter of 1998 than they were in the third quarter of 1998.

     ACQUISITIONS. The Company may from time to time pursue the acquisition of
other companies, assets, technologies or product lines that would complement or
expand its existing business, such as the acquisition of the Global Village
modem business. Certain of these acquisitions may involve businesses in which
the Company lacks experience. Acquisitions involve a number of risks that could
adversely affect the

                                     - 21 -
<PAGE>

Company's operating results, including the diversion of management's attention,
the assimilation of the operations, products and personnel of the acquired
companies, the amortization of acquired intangible assets and the potential loss
of key employees of the acquired companies. There can be no assurance that the
Company will be able to identify businesses that would complement or expand its
existing business or complete such acquisitions, manage one or more acquisitions
successfully, or that the Company will be able to integrate the operations,
products or personnel gained through such acquisition without a material adverse
impact on the Company's business, financial condition and results of operations,
particularly in the quarters immediately following such acquisitions.

     INTERNATIONAL OPERATIONS. The Company's international sales are subject to
the risks inherent in international sales, including various regulatory
requirements (including the need to obtain certification for the Company's data
communications products), political and economic changes and disruptions,
tariffs or other barriers, difficulties in staffing and managing foreign
operations, and potentially adverse tax consequences. In addition, fluctuations
in exchange rates may render the Company's products less competitive relative to
local product offerings or expose the Company to foreign currency exchange
losses. The strength of the U.S. dollar has had a negative impact for the nine
months ended September 30, 1998. One or more of thesefactors may have a material
adverse effect on the Company's future international sales and, consequently, on
the Company's operating results.

     DEPENDENCE ON SUPPLIERS. The major components of the Company's products
include circuit boards, microprocessors, chipsets and memory components. Most of
the components used in the Company's products are available from multiple
sources. However, certain components used in the Company's products are
currently obtained from single sources. Certain chipsets used in the Company's
data communications products in the past have been in short supply and are
frequently on allocation by semiconductor manufacturers. Similar to others in
the computer industry, the Company has, from time to time, experienced
difficulty in obtaining certain components. The Company has no guaranteed supply
arrangements with any of its suppliers and there can be no assurance that these
suppliers will continue to meet the Company's requirements. Shortages of
components not only limit the Company's production capacity but also could
result in higher costs due to the higher costs of components in short supply or
the need to utilize higher cost substitute components. An extended interruption
in the supply of any of these components or a reduction in their quality or
reliability would have a material adverse effect on the Company's operating
results. While the Company believes that with respect to its single source
components it could obtain similar components from other sources, it could be
required to alter product designs to use alternative components. There can be no
assurance that severe shortages of components will not occur in the future which
could increase the cost or delay the shipment of the Company's products and have
a material adverse effect on the Company's operating results. Significant
increases in the prices of these components could also have a material adverse
effect on the Company's operating results since the Company may not be able to
adjust product pricing to reflect the increases in component costs. Moreover,

                                     - 22 -
<PAGE>

a number of components for the Company's products are obtained from foreign
suppliers. Increases in tariffs on such components or fluctuations in exchange
rates could result in increases in the prices paid by the Company for these
components, which could impact the Company's ability to compete with foreign
manufacturers and have a material adverse effect on the Company's operating
results.

     SALES CHANNEL RISKS. The Company sells its products to OEMs, national,
regional and international wholesale distributors and retailers and catalog
companies. Sales to OEMs accounted for approximately 45% of net sales in the
year 1997 and 57% of net sales for the nine months ended September 30, 1998.
OEMs have significantly different requirements, and in most cases, more
stringent purchasing procedures and quality standards than wholesale
distributors and other resellers. There can be no assurance that the Company
will be successful in developing products for, and delivering products to, the
OEM market, or that it will be successful in establishing and maintaining an
effective distribution and customer support system for OEMs. The Company's
business could be adversely affected if it is unsuccessful in developing,
manufacturing and marketing product pricing which could have a material adverse
effect on the Company's operating results. A decline in sales to large customers
or a delay or default in payment by one or more of such customers could have a
material adverse effect on the Company's results of operations or financial
condition.

         The Company's three largest wholesale distributors accounted for
approximately 18% of the Company's net sales in 1997 and 27% of net sales for
the nine months ended September 30, 1998. The PC distribution industry has been
characterized by rapid change, including consolidations and financial
difficulties of wholesale distributors and the emergence of alternative
distribution channels. The Company is dependent upon the continued viability and
financial stability of its wholesale distributors. The loss or ineffectiveness
of any of the Company's three largest wholesale distributors or a number of its
smaller wholesale distributors could have a material adverse effect on the
Company's operating results. In addition, an increasing number of vendors are
competing for access to wholesale distributors which could adversely affect the
Company's ability to maintain its existing relationships with its wholesale
distributors or could negatively impact sales to such distributors. The
Company's sales to wholesale distributors declined in absolute dollars from 1995
to 1996 and from 1996 to 1997.

         During the third quarter of 1998, the Company improved the distribution
of Boca Research branded products by leveraging the strong retail position of
its Global Village line of modems. Sales to the retail channel in the nine
months ended September 30, 1998 were 6% of net sales.

     COMPETITION. The markets for the Company's products are intensely
competitive resulting in constant pricing pressures. Some of the Company's
competitors have significantly greater financial, technical, product
development, manufacturing or marketing resources than the Company. The Company
believes that its ability to compete depends on a number of factors, including
price, product quality and reliability, product availability, credit terms, name
recognition, delivery time, and post-sale service

                                     - 23 -
<PAGE>

and support. There can be no assurance that the Company will be able to continue
to compete successfully with respect to these factors. A variety of companies
currently offer products that compete directly with the Company's products.
These competitors could take pricing action that could result in price
reductions in the Company's products or that could have a material adverse
effect on the Company's operating results. In addition, as the Company enters
into new product markets, such as Internet TV appliances, cable modems and video
conferencing, the Company anticipates that it will encounter competition from a
number of well-established companies, many of which have greater financial,
technical, product development, manufacturing or marketing resources and
experience.

     PROPRIETARY RIGHTS; DEPENDENCE ON SOFTWARE LICENSES. The Company receives
from time to time, and may receive in the future, communications from third
parties asserting intellectual property rights relating to the Company's
products and technologies. There can be no assurance that in the future the
Company will be able to obtain licenses of any intellectual property rights
owned by third parties with respect to the Company's products or that any such
licenses can be obtained on terms favorable to the Company. If the Company is
unable to obtain licenses of protected technology, it could be prohibited from
manufacturing and marketing products incorporating that technology. The Company
could also incur substantial costs in redesigning its products or in defending
any legal action taken against it. Should the Company be found to infringe the
proprietary rights of others, the Company could be required to pay damages to
the infringed party which could have a material adverse effect on the Company's
operating results.

         In certain of its products, the Company includes software licensed from
third parties. The Company's operating results could be adversely affected by a
number of factors relating to this third party software, including lack of
market acceptance, failure by the licensors to promote or support the software,
delays in shipment of the Company's products as a result of delays in the
introduction of licensed software or errors in the licensed software, or excess
customer support costs or product returns experienced by the Company due to
errors in the licensed software. Moreover, any impairment or termination of the
Company's relationship with any licensors of third party software could have a
material adverse effect on the Company's operating results.

     RELIANCE ON CENTRALIZED MANUFACTURING. All of the Company's manufacturing
occurs at its leased headquarters facility in Boca Raton, Florida. The Company's
manufacturing operations utilize certain equipment which, if damaged or
otherwise rendered inoperable, would result in the disruption of the Company's
manufacturing operations. Although the Company maintains business interruption
insurance which the Company believes is adequate, any extended interruption of
the operations at this facility would have a material adverse effect on the
Company's operating results.

     PRODUCT RETURNS, PRICE PROTECTION AND WARRANTY CLAIMS.  Like other
manufacturers of computer products, the Company is exposed to the risk of
product returns from wholesale distributors and retailers, either through
contractual stock

                                     - 24 -
<PAGE>

rotation privileges or as a result of the Company's interest in assisting
customers in balancing inventories. Although the Company attempts to monitor and
manage the volume of sales to wholesale distributors and retailers, large
shipments in anticipation of sales by wholesale distributors and retailers can
lead to substantial overstocking by the Company's wholesale distributors and
retailers and to higher than normal returns. Moreover, the risk of product
returns may increase if demand for the Company's products declines. When the
Company reduces its prices, the Company credits its wholesale distributors and
retailers for the difference between the purchase price of products remaining in
their inventory and the Company's reduced price for such products on terms
negotiated with the Company, the result of which could have a material adverse
effect on the Company's operating results. The Company's limited five-year
warranty permits customers to return any product for repair or replacement if
the product does not perform as warranted. The Company to date has not
encountered material warranty claims or liabilities. The Company seeks to
continually introduce new and enhanced products, which could result in higher
product returns and warranty claims due to the risks inherent in the
introduction of such products. The Company has established reserves for product
returns, price protection and warranty claims which management believes are
adequate. There can be no assurance that product returns, price protection and
warranty claims will not have a material adverse effect on future operating
results.

     VOLATILITY OF STOCK PRICE. The price of the Company's Common Stock
historically has been volatile due to fluctuations in operating results and
other factors relating to the Company's operations, the market's changing
expectations for the Company's growth, overall equity market conditions relating
to the market for technology stocks generally and other factors unrelated to the
Company's operations, including announcements by or relating to the Company's
competitors. Such fluctuations are expected to continue. In addition, stock
markets have experienced more price volatility in recent years. This volatility
has had a substantial effect on the market prices of securities issued by many
technology companies, often for reasons unrelated to the operating performance
of the specific companies.

                                     - 25 -
<PAGE>

PART II.

                               BOCA RESEARCH, INC.
                                OTHER INFORMATION

Item 1.     Legal Proceedings

        As reported in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, the Company received correspondence from IBM
Corporation ("IBM") alleging that certain of the Company's products infringed
the patent rights of IBM. The Company has resolved the matter by entering into a
licensing agreement with IBM. This licensing agreement grants the Company, in
return for an annual royalty, a license to the patented intellectual property
with respect to which IBM alleged patent infringement as well as a broader
portfolio of IBM's technology. The royalty payable under the licensing agreement
is variable depending upon the Company's annual revenues and is anticipated to
be $25,000 in 1998.

         As reported in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, a former shareholder of the Company filed an
action in the United States District Court for the Southern District of Florida
against the Company and Anthony F. Zalenski, its President and Chief Executive
Officer in March, 1997. The former shareholder claimed that he relied on certain
statements made directly to him by Mr. Zalenski and certain other statements in
deciding not to sell his shares of the Company's Common Stock. The former
shareholder claimed that such statements were false and misleading and give rise
to claims under the Federal securities law and Florida common law. The former
shareholder sought damages for his trading losses, which were alleged to be in
excess of $1 million. Such action was settled in September, 1998 by payment made
by the Company's directors and officers liability insurance carrier.


Items 2-3.

        Not applicable.


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

        There were no matters submitted to a vote of security holders during the
quarter ended September 30, 1998.


Item 5.     Other information

        None.

                                     - 26 -
<PAGE>

                               BOCA RESEARCH, INC.
                            OTHER INFORMATION (Con't)

Item 6.     Exhibits and Reports on Form 8-K

       (a)    Exhibits:

              10.1 - Loan and Security Agreement dated as of November 9, 1998
                     between Boca Research, Inc. and Finova Business Credit.

              11 - Calculation of shares used in determining earnings per share.

              27 - Financial Data Schedule


        (b)   Reports on Form 8-K

              On September 3, 1998, the Company filed a Form 8-K/A which amended
              the Form 8-K previously filed by the Company to report the
              acquisition of certain assets of Global Village Communications
              Inc.

                                     - 27 -
<PAGE>

                               BOCA RESEARCH, INC.

                                   SIGNATURES

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



Dated:  March 24, 1999                   /S/ ANTHONY F. ZALENSKI
                                         -----------------------
                                         Anthony F. Zalenski
                                         President and Chief Executive Officer
                                         (Principal Executive Officer)



Dated:  March 24, 1998                   /S/ NAVROZE S. MEHTA
                                         --------------------
                                         Navroze S. Mehta
                                         Executive Vice President and
                                         General Manager
                                         (Principal Financial and
                                         Accounting Officer)


                                     - 28 -