<PAGE>   1
                           _________________________

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  ____________

                                    FORM 10-Q

                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, 1996

                                  ____________

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

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

    1377 Clint Moore Road
     Boca Raton, Florida
    (Address of principal                           33847
      executive offices)                          (Zip Code)

                    Registrant's telephone number, including
                            area code: (407) 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.


<TABLE>
<CAPTION>
                                                        Outstanding as of
          Class                                         November 12, 1996
          -----                                         -----------------

<S>                                                        <C>
  Common stock, par value                                  8,662,216
      $.01 per share
</TABLE>
<PAGE>   2
                               BOCA RESEARCH, INC.
               Form 10-Q For The Quarter Ended September 30, 1996

                                      INDEX


<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
<S>                                                                                    <C>  
PART I. FINANCIAL INFORMATION
      Item 1.    Financial Statements

                         Condensed Consolidated Balance Sheets
                           (unaudited) as of September 30, 1996 and
                           December 31, 1995 .........................................  3

                         Condensed Consolidated Statements of
                           Income (unaudited) for the three and nine
                           months ended September 30, 1996 and 1995 ..................  4
 .

                         Condensed Consolidated Statements of
                           Cash Flows (unaudited) for the nine
                           months ended September 30, 1996 and 1995 ..................  5

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

      Item 2.    Management's Discussion and Analysis of
                           Financial Condition and Results of
                           Operations ................................................ 12

PART II.         OTHER INFORMATION
      Items 1-3.         Not applicable .............................................. 24

      Item  4.   Submission of Matters to a Vote of
                           Security Holders .......................................... 24

      Item  5.   Other Information ................................................... 24

      Item  6.   Exhibits and Reports on Forms 8-K ................................... 24

      Signatures ..................................................................... 25
</TABLE>



                                      - 2 -
<PAGE>   3
PART I.  ITEM 1.


                               BOCA RESEARCH, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                 (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                               September 30,  December 31,
                                                                    1996          1995
                                                                  -------        -------
<S>                                                               <C>            <C>    
                                     ASSETS
Current assets:
     Cash and cash equivalents ...........................        $ 2,056        $   477
     Trade receivables, net ..............................         31,569         22,871
     Inventory, net ......................................         16,867         22,457
     Prepaid expenses and other assets ...................            415            890
     Deferred and prepaid income taxes ...................          2,783          2,230
                                                                  -------        -------
        Total current assets .............................         53,690         48,925
     Property and equipment, net .........................          7,773          7,722
     Deferred income taxes, noncurrent ...................            242            242
     Goodwill, net .......................................             41            166
     Other assets ........................................            711            623
                                                                  -------        -------
        Total assets .....................................        $62,457        $57,678
                                                                  =======        =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable ....................................        $ 5,104        $ 5,837
     Accrued expenses and other current liabilities ......          3,181          4,628
     Income taxes payable ................................              0            607
                                                                  -------        -------
       Total current liabilities .........................          8,285         11,072
                                                                  -------        -------

Commitments and contingencies

Stockholders' equity:
     Common stock, 25,000,000 $.01 par value shares
       authorized, 8,648,883 issued and outstanding
       at September 30, 1996, 8,522,759 issued and
       outstanding at December 31, 1995 ..................             87             85
     Additional paid-in capital ..........................         24,649         23,470
     Retained earnings ...................................         29,436         23,051
                                                                  -------        -------
       Total stockholders' equity ........................         54,172         46,606
                                                                  -------        -------
           Total liabilities and stockholders' equity ....        $62,457        $57,678
                                                                  =======        =======
</TABLE>

See notes to condensed consolidated financial statements.


                                      - 3 -
<PAGE>   4

                               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,
                                                   ----------------------        -----------------------
                                                    1996           1995            1996           1995
                                                   -------        -------        --------        -------

<S>                                                <C>            <C>            <C>             <C>    
Net sales .................................        $32,966        $37,350        $124,563        $97,815
Cost of goods sold ........................         26,798         27,829          99,169         72,397
                                                   -------        -------        --------        -------
        Gross profit ......................          6,168          9,521          25,394         25,418
                                                   -------        -------        --------        -------
Operating expenses:
        Research and development ..........            739            839           2,222          2,086
        Selling, general and administrative          4,010          4,951          13,636         13,417
                                                   -------        -------        --------        -------
        Total operating expenses ..........          4,749          5,790          15,858         15,503
                                                   -------        -------        --------        -------
Income from operations ....................          1,419          3,731           9,536          9,915
Non-operating income, net .................            177             63             440            419
                                                   -------        -------        --------        -------
Income before income taxes ................          1,596          3,794           9,976         10,334
Income taxes ..............................            574          1,372           3,591          3,726
                                                   -------        -------        --------        -------
Net income ................................        $ 1,022        $ 2,422        $  6,385        $ 6,608
                                                   =======        =======        ========        =======
Primary earnings per share ................        $  0.12        $  0.27        $   0.71        $  0.74
                                                   =======        =======        ========        =======
Shares used in primary
        per share calculation .............          8,792          9,087           8,965          8,874
                                                   =======        =======        ========        =======
Fully diluted earnings per share ..........        $  0.12        $  0.27        $   0.71        $  0.73
                                                   =======        =======        ========        =======
Shares used in fully diluted
        per share calculation .............          8,792          9,087           8,965          9,016
                                                   =======        =======        ========        =======
</TABLE>


            See notes to condensed consolidated financial statements.



                                      - 4 -
<PAGE>   5
                               BOCA RESEARCH, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                     Nine Months
                                                                  Ended September 30,
                                                               ------------------------
                                                                1996             1995
                                                               -------         --------

<S>                                                            <C>             <C>     
Cash provided by (used in):
Operating activities:
         Net income ...................................        $ 6,385         $  6,608
         Adjustments for non-cash charges .............          2,267            1,938
         Changes in assets and liabilities ............         (6,061)         (13,476)
                                                               -------         --------
           Net cash provided by (used in)
           operating activities .......................          2,591           (4,930)
                                                               -------         --------

Investing activities:
         Loan to related party ........................              0             (205)
         Loan repayment from related party ............              0              500
         Capital expenditures .........................         (2,193)          (2,352)
                                                               -------         --------
           Net cash used in investing activities ......         (2,193)          (2,057)
                                                               -------         --------
Financing activities - Exercise of options ............          1,181              494
                                                               -------         --------
Net increase (decrease) in cash and cash equivalents ..          1,579           (6,493)
Cash and cash equivalents, beginning of period ........            477            6,666
                                                               -------         --------
Cash and cash equivalents, end of period ..............        $ 2,056         $    173
                                                               =======         ========
</TABLE>


            See notes to condensed consolidated financial statements.



                                      - 5 -
<PAGE>   6
                               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, 1996, and the results of its operations and its
cash flows for the three and nine month periods ended September 30, 1996 and
1995. 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 1995 audited financial statements.

        The accompanying financial statements should be read in conjunction with
the Company's most recent audited financial statements and notes thereto for the
year ended December 31, 1995. The results of operations for the three and nine
month periods ended September 30, 1996 are not necessarily indicative of the
results to be expected for the full year.

        The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," effective January 1, 1996. The adoption did not have
a significant effect on financial position or results of operations.

        The Company adopted SFAS No. 123, "Accounting for Stock-Based
Compensation," effective January 1, 1996. The Company is continuing to measure
stock-based employee compensation using the intrinsic value method, and will
provide the pro forma disclosures required by SFAS No. 123 in its financial
statements for the year ending December 31, 1996.

        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 $4,751,683 and
$4,082,231 in the nine month periods ended September 30, 1996 and 1995,
respectively.


                                      - 6 -
<PAGE>   7
                               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):

<TABLE>
<CAPTION>
                                                            September 30,    December 31,
                                                                1996             1995
                                                              --------         --------

<S>                                                           <C>              <C>     
        Accounts receivable ..........................        $ 35,668         $ 26,484
        Allowance for sales returns, allowances and
          price protection ...........................          (2,500)          (2,613)
        Allowance for doubtful accounts ..............          (1,599)          (1,000)
                                                              --------         --------

                                                              $ 31,569         $ 22,871
                                                              ========         ========
</TABLE>

        Included in the accounts receivable balance are: (a) $846,000 from
MBf/Boca Asia Pacific Sdn Bhd, a joint venture in Malaysia in which the Company
has a 50% ownership interest; and (b) $376,000 from Powertel of India, a joint
venture in India in which the Company has a 20% ownership interest. Sales to
these related parties in the three and nine month periods ended September 30,
1996 were approximately $843,000 and $4,472,000, respectively. The Company did
not have such investments in the nine months ended September 30, 1995.

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

<TABLE>
<CAPTION>
                                            September 30,    December 31,
                                                1996             1995
                                            -------------    ------------
<S>                                           <C>              <C>     
        Raw materials ................        $ 13,069         $ 16,501
        Work in process ..............           5,045            5,346
        Finished goods ...............             753            1,690
        Inventory reserves ...........          (2,000)          (1,080)
                                              --------         --------
                                              $ 16,867         $ 22,457
                                              ========         ========
</TABLE>

PROPERTY AND EQUIPMENT

        Property and equipment is included in the condensed consolidated balance
sheets net of accumulated depreciation of $7,319,715 at September 30, 1996 and
$5,347,030 at December 31, 1995.


                                      - 7 -
<PAGE>   8
                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CON'T)
                                   (UNAUDITED)

LINE OF CREDIT

        The Company had an unsecured revolving line of credit expiring April 30,
1997, which permitted borrowings of the lesser of $7,000,000 or 50% of qualified
accounts receivable. On September 12, 1996, the Company entered into a new
unsecured revolving line of credit agreement expiring May 31, 1998, which
permits borrowings of the lesser of $12,000,000 or 60% of qualified accounts
receivable. Under the terms of the loan agreement relating to the line of
credit, the Company may elect the interest rate to be either the bank's prime
rate or the London InterBank Offered Rate (LIBOR) plus 1 1/2%. The loan
agreement requires the Company to maintain certain financial ratios, limits the
incurrence of additional debt, and prohibits payment of dividends without the
bank's consent. There were no borrowings outstanding at September 30, 1996.

COMMITMENTS AND CONTINGENCIES

        Rent expense for the three month periods ended September 30, 1996 and
1995 was $197,153 and $166,990, respectively, and $603,657 and $975,073 for the
nine month periods ended September 30, 1996 and 1995, respectively. In the three
month period ended March 31, 1995, the Company incurred additional rent expense
of approximately $269,000 to record the effect of vacating two leased
facilities. The Company is committed through 2000 for rents under noncancelable
operating leases for use of its offices, warehouses and manufacturing
facilities. The aggregate minimum annual payments under such leases for the
years ending December 31, 1996, 1997, 1998, 1999 and 2000 are $659,320,
$543,426, $427,533, $325,728, and $206,686, respectively.

        The Company receives communications from time to time alleging that
certain of the Company's products infringe the patent rights of other parties.
Based on information currently available to the Company, it is the opinion of
the Company's management that the ultimate outcome of these matters will not
have a material adverse effect on the Company's results of operations or
financial position.

        On October 4, 1996, the Company entered into a Consulting Agreement (the
"Consulting Agreement") with ARGOQUEST, Inc., a California corporation
("ArgoQuest") pursuant to which ArgoQuest was retained to serve as a consultant
to the Company with respect to sales to retail accounts, wholesale distributors
and original equipment manufacturers ("OEMs"). The principal terms of the
Consulting Agreement are as follows:



                                      - 8 -
<PAGE>   9
                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CON'T)
                                   (UNAUDITED)


        The Consulting Agreement has a term of 54 months (the "Term"). In
consideration of entering into the Consulting Agreement, ArgoQuest will receive
a monthly fee of $83,333 in cash, plus expenses, for the Term, except that no
fees will be paid for the period commencing on the first day of the seventh
month of the Term and ending on the last day of the eighteenth month of the Term
(the "Deferred Period"), unless the Board of Directors of the Company shall
determine otherwise. If the Company achieves at least $50 million in certain Net
Sales, as defined in the Consulting Agreement ("Net Sales"), during the first
eighteen months of the Consulting Agreement (the "First Period"), then ArgoQuest
will be entitled to receive an additional consulting fee of $1,000,000, less any
consulting fees paid to ArgoQuest during the Deferred Period. If the Company
does not achieve at least $50 million in Net Sales during the First Period, the
Company may terminate the Consulting Agreement.

        ArgoQuest will have the right to be granted options to purchase shares
of Common Stock of the Company, subject to the Company achieving specified Net
Sales during certain periods (the "Initial Options"). In the event that during
the First Period, the Company achieves Net Sales of at least $100 million, then
ArgoQuest will be granted options to purchase 500,000 shares of Common Stock of
the Company (the "Boca Common Stock"), at an exercise price of $2.95 per share.
In the event that during the period commencing at the expiration of the First
Period and continuing through the date which is thirty months after the
execution and delivery of the Consulting Agreement (the "Second Period"), the
Company achieves Net Sales of at least $125 million, then ArgoQuest will be
granted options to purchase 1,000,000 shares of Boca Common Stock, at an
exercise price of $2.95 per share. In the event that the Company achieves at
least $50 million in Net Sales for the First Period, the Initial Options to be
granted with respect to the First Period will be pro rated on a linear basis
between $0 and $100 million of the targeted Net Sales for such period. In the
event that the Company achieves at least $70 million in Net Sales for the Second
Period, the Initial Options to be granted with respect to the Second Period will
be pro rated on a linear basis between $0 and $125 million of the targeted Net
Sales for such period. In addition, in the event that Net Sales for the First
Period are less than $100 million, ArgoQuest will be entitled to be granted
those Initial Options attributable to the First Period which were not granted in
the First Period if the Company achieves Net Sales for the Second Period of at
least $125 million plus an amount equal to the difference between actual Net
Sales for the First Period and $100 million.

        ArgoQuest will have the right to receive additional options to purchase
shares of Boca Common Stock, the grant of such options to be subject to the
Company achieving the Target Net Sales set forth below during the periods set
forth below (the "Performance Options"):


                                      - 9 -
<PAGE>   10
                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CON'T)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                          Pro Rata              Number of
                             Target Net Sales            Threshold             Performance        Exercise Price
   Period                       (Millions)               (Millions)              Options             per Share
   ------                       ----------               ----------              -------             ---------

<S>                                <C>                      <C>                  <C>                   <C>   
Date of Agreement                  $150                     $100                 225,000               $14.16
through 3/31/98                     200                      150                 225,000                14.16

4/1/98 through                      175                      150                 300,000                17.70
3/31/99                             225                      175                 300,000                17.70

4/1/99 through                      250                      175                 300,000                20.65
3/31/00                             350                      250                 300,000                20.65

4/1/00 through                      325                      250                 300,000                23.60
3/31/01                             400                      325                 300,000                23.60
</TABLE>

        In the event that the Company achieves Net Sales equal to at least the
Pro Rata Threshold set forth in the table above but less than the Net Sales
Target for such period, then ArgoQuest will be entitled to be granted a portion
of the Performance Options designated for such period determined on a linear
basis from the Pro Rata Threshold through the Net Sales Target for such period.

        All earned Initial Options will vest in full on the date of grant. All
earned Performance Options will vest over a three-year period from the date of
grant, commencing on the first anniversary of the date of grant, and will be
subject to the restrictions on transfer discussed above with respect to the
issuance of the shares. The vesting of all earned Options will accelerate upon a
change of control (as defined). In the event of a change of control, the Company
may elect to terminate the Consulting Agreement and will be discharged from any
further obligations to grant Options or pay consulting fees under the Agreement,
except that a portion of the remaining Options will be granted subject to the
Company achieving certain Net Sales targets during the period in which the
change of control occurs. The shares of Common Stock issuable upon exercise of
any Options granted pursuant to the Consulting Agreement will not be registered
under the Securities Act of 1933, as amended, and will be subject to the
restrictions on resale imposed by the Securities Act. The Consultant has been
granted certain rights to require the Company to register (at the expense of the
Consultant) the shares issuable upon exercise of the Options. The Consultant may
not assign or otherwise transfer any Options, except that the Consultant may
transfer Options aggregating not more than 25% of the Options,


                                     - 10 -
<PAGE>   11
                               BOCA RESEARCH, INC.

          NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CON'T)
                                   (UNAUDITED)


determined on a cumulative basis. The Consultant is not permitted to sell or
otherwise dispose of any shares of Common Stock issuable upon exercise of the
Options until the first anniversary of the date of issuance thereof and, after
such date, not to sell or otherwise dispose of greater than 33% of such shares,
in the aggregate, on an annual basis.

 STOCKHOLDERS' EQUITY

        During the nine month period ended September 30, 1996, 105,379 shares
were issued to current employees in connection with the exercise of options
granted to the individuals under the Company's stock option plans. The aggregate
proceeds received from these exercises were $792,125.

        In January and July 1996, 9,502 and 11,243 options were exercised by
employees under the 1992 Employee Stock Purchase Plan. Aggregate proceeds
received from these exercises were $388,439.

STOCK OPTION PLAN

        During the nine month period ended September 30, 1996, the Company
granted options to purchase 448,408 shares at prices ranging from $11.50 to
$25.00 to both new and existing employees.

        During the nine month period ended September 30, 1996, 80,849 stock
options were canceled.


                                     - 11 -
<PAGE>   12
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, 1996 and 1995, the following table sets
forth the items in the consolidated statements of income 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,
                                                  -------------------        Percent        ---------------------        Percent
                                                   1996         1995          Change         1996           1995         Change
                                                  ------       ------        --------       ------        -------        ------

<S>                                               <C>           <C>           <C>            <C>           <C>            <C>  
Net sales ................................        100.0%        100.0%        (11.7)%        100.0%        100.0%         27.3%
Cost of goods sold .......................         81.3          74.5          (3.7)          79.6          74.0          37.0
                                                  -----         -----                        -----         -----
    Gross profit .........................         18.7          25.5         (35.2)          20.4          26.0          (0.1)
                                                  -----         -----                        -----         -----
Operating expenses:
    Research and development .............          2.2           2.2         (11.9)           1.8           2.1           6.5
    Selling, general and administrative ..         12.2          13.3         (19.0)          10.9          13.7           1.6
                                                  -----         -----                        -----         -----
        Total operating expenses .........         14.4          15.5         (18.0)          12.7          15.8           2.3
                                                  -----         -----                        -----         -----
Income from operations ...................          4.3          10.0         (62.0)           7.7          10.2          (3.8)
Non-operating income, net ................          0.5           0.2         181.0            0.3           0.4           5.0
                                                  -----         -----                        -----         -----
Income before income taxes ...............          4.8          10.2         (57.9)           8.0          10.6          (3.5)
Income taxes .............................          1.7           3.7         (58.2)           2.9           3.8          (3.6)
                                                  -----         -----                        -----         -----
Net income ...............................          3.1           6.5         (57.8)           5.1           6.8          (3.4)
                                                  =====         -----                        =====         -----
</TABLE>


                                     - 12 -
<PAGE>   13
RESULTS OF OPERATIONS

               Net Sales. The Company's net sales decreased by 11.7% to
$32,966,000 in the three months ended September 30, 1996 from $37,350,000 in the
three months ended September 30, 1995. For the nine months ended September 30,
1996, net sales increased by 27.3% to $124,563,000 from $97,815,000 for the
comparable period in 1995. The sales increase for the three and nine month
periods ended September 30, 1996 over the comparable periods in 1995 is shown
below by product category.



<TABLE>
<CAPTION>
                                     THREE MONTHS                NINE MONTHS
                                  ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                 --------------------        --------------------
                                  1996          1995          1996          1995
                                 ------        ------        ------        ------
                                                  (IN MILLIONS)

<S>                              <C>           <C>           <C>           <C>   
Data Communications .....        $ 27.1        $ 24.3        $108.0        $ 48.0
Multimedia ..............           0.3           2.2           0.7          22.8
Networking ..............           1.8           2.8           4.9           7.0
Video Graphics ..........           1.5           4.2           4.8          10.3
I/O, IDE, & Multiport ...           2.1           3.7           5.8           9.4
Memory ..................            --           0.1            --           0.3
ISDN ....................           0.1            --           0.3            --
Video Phone .............           0.1            --           0.1            --
                                 ------        ------        ------        ------
                                 $ 33.0        $ 37.3        $124.6        $ 97.8
                                 ======        ======        ======        ======
</TABLE>


         The decrease in sales for the three month period ended September 30,
1996 compared to the comparable period in 1995 was attributable to decreased
sales in all product categories except the Company's data communications
products. The increase in sales for the nine month period ended September 30,
1996 compared to the comparable period in 1995 was attributable to increased
sales of data communications products offset by a decline in sales of the
Company's other product categories. Sales of product in the Company's two new
product categories, ISDN and video phone, were minimal for the three month and
nine month periods ended September 30, 1996. The increased sales of the
Company's data communications products in the three months and nine months ended
September 30, 1996 compared to the comparable periods in 1995 was primarily due
to the increase in demand for the Company's 28.8 Kbps modem products. These
higher speed modems are becoming increasingly popular for accessing the Internet
and connecting individuals and information worldwide. The Company believes that
the increased use of the Internet and on-line services is fueling the demand for
modem products. The overall sales level of the Company's products is affected by
pricing conditions in the industry. The decrease in sales for the three month
period ended September 30, 1996 was due, in part, to industry-wide decreases in
prices of the Company's


                                     - 13 -
<PAGE>   14
major product, the 28.8 Kbps modem, which the Company anticipates could continue
in the future.

         Sales of the Company's Sound Expression multimedia product declined by
$1,900,000 for the three months ended September 30, 1996 and declined by
$22,100,000 for the nine months ended September 30, 1996 compared to the
comparable periods in 1995. This is a continuation of a decline in sales of the
Sound Expression product that occurred in the last six months of 1995 due to the
increased use by OEMs of a chipset incorporating sound on the system board of
the PC. As of September 30, 1996, net inventory includes $500,000 of components
and finished goods relating to this product line. The Company believes that
there is a niche market for its 28.8 Sound Expression product and anticipates
sales in this category in the future, however, at gross margin percentages below
the Company's average. The decline in sales of networking, video and I/O, IDE
and multiport products reflects the Company's decision to focus its sales
efforts on other product categories that have more value-added features and thus
the potential for higher gross profits.

         Two OEM customers accounted for approximately $12,300,000 and
$6,300,000 in sales, representing 36% and 19% respectively of net sales for the
three months ended September 30, 1996. These two OEM customers for the nine
month period ended September 30, 1996 accounted for approximately $19,800,000
and $23,800,000 in sales, representing 15% and 19%, respectively, of net sales.
The Company expects that sales to these two customers for the remainder of 1996
will likely be less than in the third quarter of 1996. As of September 30, 1996
the Company had accounts receivable balances of $12,300,000 and $5,600,000,
respectively, from these two OEM customers of which approximately $1,600,000 was
between 60 and 90 days beyond the invoice date. In addition, an international
OEM customer accounted for $13,700,000 in sales, representing 11% of net sales
for the nine months ended September 30, 1996, none of which was in the third
quarter. As of September 30, 1996, the Company had an accounts receivable
balance of $3,200,000 from this customer which was beyond the agreed terms. The
Company believes that this customer's inventory of products purchased from the
Company is at higher than normal levels, which impacted the Company's sales to
this customer for the three month period ended September 30, 1996. In light of
the customer's inventory levels, the Company believes that sales to this
customer for the last three months of 1996 will continue to be adversely
affected. A delay or default in payment by any significant customer could have a
material adverse effect on the Company's results of operations or financial
condition. Also, a decline in sales to a significant customer could have a
material adverse effect on the Company's results of operations or financial
condition.

         International sales represented 14% of net sales for the three months
ended September 30, 1996 and 30% of net sales for the nine months ended
September 30, 1996. International sales represented 17% of net sales for the
three months ended September 30, 1995 and 16% of net sales for the nine month
period ended September 30, 1995.


                                     - 14 -
<PAGE>   15
         The percentage of net sales attributable to OEM customers increased to
66% in the three months ended September 30, 1996 from 38% in the three months
ended September 30, 1995. For the nine month period ended September 30, 1996,
the percentage of net sales to OEM customers increased to 63% from 44% in the
comparable period in 1995. The Company believes that sales to OEM customers will
continue to represent a substantial portion of net sales.

         Gross Profit. Gross profit decreased to $6,168,000 in the three months
ended September 30, 1996 from $9,521,000 in the three months ended September 30,
1995, and decreased as a percentage of net sales to 18.7% in the three months
ended September 30, 1996 from 25.5% in the three months ended September 30,
1995. As discussed above, sales to OEM customers, for which gross profit margins
are typically lower, increased to 66% of net sales in the three months ended
September 30, 1996 compared to 38% of net sales in the three months ended
September 30, 1995. Gross profit percentage was also affected by increased price
competition on the Company's major product, the 28.8 Kbps modem, and a rapid
decline in selling price of certain products due to their replacement with later
generation products. For the nine months ended September 30, 1996, gross profit
decreased to $25,394,000 from $25,418,000 for the nine months ended September
30, 1995. Gross profit as a percentage of net sales decreased to 20.4% for the
nine month period ended September 30, 1996 from 26.0% for the nine month period
ended September 30, 1995. The decrease in gross profit percentage for the nine
month period is attributable to the increase in sales to OEM customers to 63%
for the nine month period ended September 30, 1996, from 44% for the nine month
period ended September 30, 1995. Gross profit percentage was also affected by a
write down of DRAM inventory components of $750,000, increased inventory
reserves of $920,000, a rapid decline in selling price of certain products due
to their replacement with later generation products and a decline in price of
the Company's major product, the 28.8 Kbps modem.

         The modem market is experiencing changing dynamics in that the supply
of modem chips is more available in 1996 as contrasted to the short supply in
1995. Also, modem manufacturers are increasing production and seeking to expand
their market share. These circumstances will likely result in lower selling
prices for modems in the future. The Company's gross profit percentage will be
dependent on the Company's ability to offset this price decrease with cost
decreases on the major components.

         The gross profit margins for the Company's products depend upon 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 OEMs), component costs, and manufacturing efficiencies. In general, gross
profit margins are higher on sales to wholesale distributors and retailers than
on sales to OEMs. In addition, gross profit margins on product categories
differ. Accordingly, the Company's gross profit margin has varied substantially
from quarter to quarter in the past, and can be expected to continue to do so in
the future. Management believes that the lower operating expenses typically
associated with OEM sales generally offset their corresponding lower gross
profit margins. 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 phase-out inventory, to utilize manufacturing capacity, and
to increase penetration in the retail channel.


                                     - 15 -
<PAGE>   16
         Research and Development Expenses. Research and development expenses
decreased to $739,000 in the three months ended September 30, 1996 from $839,000
in the three months ended September 30, 1995. As a percentage of net sales,
research and development expenses were 2.2% for the three months ended September
30, 1996 and 1995. For the nine months ended September 30, 1996, research and
development expenses increased to $2,222,000 from $2,086,000 for the nine month
period ended September 30, 1995. This represented a decrease in research and
development expenses as a percentage of net sales to 1.8% for the nine months
ended September 30, 1996 from 2.1% of net sales for the comparable period in
1995. The decrease in research and development expenses as a percentage of net
sales was primarily attributable to the fixed nature of certain research and
development costs allocated over a larger sales base. Also, the Company relies
on license and royalty agreements with third parties for much of its new product
development. The Company has formed alliances with Chase Research Plc, NetComm
Limited, Viewpoint Systems, a wholly owned subsidiary of Multimedia Access
Computer and Telesoft International, Inc. to develop ISDN, high-end network
management products and video conferencing products. The Company has recently
increased its staff of engineers which is anticipated to increase research and
development expenses in the fourth quarter.

         Selling, General, and Administrative Expenses. Selling, general and
administrative expenses decreased to $4,010,000 in the three months ended
September 30, 1996 from $4,951,000 in the three months ended September 30, 1995.
Selling, general and administrative expenses as a percentage of net sales
decreased to 12.2% in the three months ended September 30, 1996 from 13.3% in
the three months ended September 30, 1995. Selling, general and administrative
expenses increased to $13,636,000 in the nine months ended September 30, 1996
from $13,417,000 in the nine months ended September 30, 1995. Selling, general
and administrative expenses as a percentage of net sales decreased to 10.9% in
the nine months ended September 30, 1996 from 13.7% in the nine months ended
September 30, 1995. The decrease in selling, general and administrative expenses
as a percentage of net sales is primarily the result of increased sales to OEM
customers during the three and nine month periods ended September 30, 1996, as
well as the non-variable nature of certain expenses relative to sales increases.
Certain selling, general and administrative expenses associated with OEM sales
are typically lower than those expenses associated with sales to wholesale
distributors and retailers. Selling, general and administrative expenses as a
percentage of net sales will continue to fluctuate and will be influenced by the
level of sales to the various channels, and the particular sales and marketing
requirements of each of the channels. Expenses for employee bonuses are
approximately $708,000 less in the nine months ended September 30, 1996 compared
to the comparable period in 1995 because net income performance targets are not
being met. Selling, general and administrative expenses are anticipated to
increase in the fourth quarter as the Company increases its sales focus and
consulting fees and expenses are recorded per the October 4, 1996 Consulting
Agreement entered into by the Company with ArgoQuest, Inc. The Company
anticipates that it will incur fees and other expenses of at least $100,000
monthly during the fourth quarter of 1996 in connection with this Agreement,
which amount could


                                     - 16 -
<PAGE>   17
increase depending on the level of sales resulting from the Agreement. See Notes
to the Condensed Consolidated Financial statements for further information
regarding this Agreement. Also, the terms and conditions of this Agreement are
detailed in the Company's Current Report on Form 8-K filed with the Commission
on October 15, 1996.

LIQUIDITY AND CAPITAL RESOURCES

         In the nine months ended September 30, 1996, the Company's working
capital increased by $7,552,000 from December 31, 1995. This increase was
represented by increases in cash and cash equivalents of $1,579,000, trade
receivables of $8,698,000, other current assets of $78,000 and a decrease in
current liabilities of $2,787,000; offset by a decrease in inventories of
$5,590,000. The Company's operations provided cash of $2,591,000 for the nine
months ended September 30, 1996. The Company's investing activities consisted of
capital expenditures of $2,193,000 during the nine months ended September 30,
1996.

         The Company may from time to time experience periods of negative cash
flow from operations. The Company intends to borrow under its line of credit to
the extent necessary to finance cash needs. The Company had an unsecured
$7,000,000 line of credit with a commercial bank expiring on April 30, 1997. On
September 12, 1996, the Company entered into a new unsecured revolving line of
credit agreement expiring May 31, 1998. As of September 30, 1996, no borrowings
were outstanding under this line of credit, which permits borrowings of the
lesser of $12,000,000 or 60% of qualified accounts receivable. Under the terms
of the loan agreement relating to the line of credit, the Company may elect the
interest rate to be either the bank's prime rate or the London InterBank Offered
Rate (LIBOR) plus 1 1/2%. The loan agreement requires the Company to maintain
certain financial ratios, limits the incurrence of additional debt, and
prohibits payment of dividends without the bank's consent. The Company does not
anticipate that borrowings will be made under the line of credit in the fourth
quarter of 1996 unless there is an unexpected delay of the collection of
receivables from three major customers as discussed on page 12.

         The Company's trade receivables have increased at September 30, 1996 as
a result of slow payments by major customers and extended credit terms. It is
anticipated that these extended terms will increase the Company's investment in
receivables in the future. In addition, while inventories decreased during the
nine months ended September 30, 1996, increases may occur in the future to
support higher sales, particularly to OEMs and management may make strategic
investments in inventory to improve the flow of components to manufacturing in
order to assure timely delivery to customers. The Company intends to finance
these increases through existing cash balances, cash generated from operations
and borrowings under its line of credit. The Company currently believes that the
combination of cash generated from operations, the Company's existing cash
balances, and its line of credit will be sufficient to meet its liquidity and
capital requirements through at least December 31, 1996.


                                     - 17 -
<PAGE>   18
         The Company's management continually reviews its financing options. The
Company is considering and will continue to consider alternative financing
opportunities including the issuance of equity, debt or convertible debt, if
market conditions make such alternatives financially attractive methods of
funding the Company's short-term or long-term needs.

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 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.

         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 all 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


                                     - 18 -
<PAGE>   19
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. In this regard, demand for the Company's SoundExpression
multimedia products declined in the last six months of 1995 and the first nine
months of 1996 due to the increased use by OEMs of chipsets incorporating sound
and modem features which are integrated into the system board of the PC. 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 competitive pricing pressures, the timing of
orders from and shipments to major customers, the timing of new product
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
continue its growth in sales or sustain its 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.

         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. Certain of these acquisitions may involve
businesses in which the Company lacks experience. Acquisitions involve a number
of risks that could adversely affect the 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


                                     - 19 -
<PAGE>   20
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 certifications 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. One or more of these factors 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 modem chipsets used in the
Company's data communications products 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, 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.


                                     - 20 -
<PAGE>   21
         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 63% of net sales in the
nine months ended September 30, 1996. 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 continue to 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
products for sale to OEMs. In addition, OEMs may require special distribution
arrangements and product pricing, which could have a material adverse effect on
the Company's operating results. In the nine months ended September 30, 1996,
the Company's three largest OEM customers accounted for approximately 45% of the
Company's net sales. A decline in sales to either of these customers or a delay
or default in payment by either customer 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 14% of the Company's net sales in the nine months ended September
30, 1996. 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.

         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 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 introduce
additional products or add features to their existing products that are superior
to the Company's products or that achieve greater market acceptance. In addition
to U.S.-based firms, the Company faces competition from Pacific Rim suppliers
which generally offer products at significantly lower prices. The introduction
of lower priced competitive products or significant price reductions by the
Company's competitors would result in price reductions in the Company's products
that could have a material adverse effect on the Company's operating results. In
addition, as the Company enters into new product


                                     - 21 -
<PAGE>   22
markets, such as ISDN, cable modems and videoconferencing, 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.

         MANAGEMENT OF GROWTH. In recent years, the Company has experienced
significant growth and expansion in the overall level of its business and scope
of operations, including sales and distribution, research and development,
marketing and technical support. The Company's ability to manage its growth will
require it to continue to invest in its operations and to retain, motivate and
effectively manage its employees. If the Company's management is unable to
manage growth effectively, the Company's results of operations could be
materially and adversely affected.

         PROPRIETARY RIGHTS; DEPENDENCE ON SOFTWARE LICENSES. Although the
Company has not historically been the subject of significant claims of
infringement by third parties, 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


                                     - 22 -
<PAGE>   23
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 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.


                                     - 23 -
<PAGE>   24
PART II.

                               BOCA RESEARCH, INC.
                                OTHER INFORMATION

Items 1-3.

       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, 1996.

Item 5.         Other information

       None.

Item 6.         Exhibits and Reports on Form 8-K

       (a)      Exhibits:

                10         First Union Line of Credit Agreement

                11         Calculation of shares used in determining earnings
                           per share.

                27         Financial Data Schedule

       (b)      Reports on Form 8-K

                On October 15, 1996, the Company filed a Current Report on Form
                8-K with the Securities and Exchange Commission reporting under
                Item 5 of Form 8-K the execution and delivery of the Consulting
                Agreement between the Company and ArgoQuest, Inc.



                                     - 24 -
<PAGE>   25
                               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:  November 12, 1996                  /s/ Anthony F. Zalenski
                                           -------------------------------------
                                           Anthony F. Zalenski
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)




Dated:  November 12, 1996                  /s/ R. Michael Brewer
                                           -------------------------------------
                                           R. Michael Brewer
                                           Vice President - Finance and
                                           Chief Financial Officer
                                           (Principal Financial and
                                           Accounting Officer)




                                     - 25 -
<PAGE>   26
                               BOCA RESEARCH, INC.

                                INDEX TO EXHIBITS


<TABLE>
<CAPTION>
                                                                                     Pages
                                                                                     -----

<S>                                                                                  <C>  
Exhibit 10      First Union Line of Credit Agreement
        11      Calculation of shares used in determining earnings per share         27-28
        27      Financial Data Schedule


</TABLE>






                                     - 26 -