<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                         
                                   FORM 10-Q


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

For the quarterly period ended September 28, 1998


                                       OR

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


                        Commission file number: 0-27016

                             ROSS TECHNOLOGY, INC.
             (Exact Name of Registrant as Specified in Its Charter)


          DELAWARE                                                74-2507960
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)


                         Two Ceilo Center, Third Floor
                         1250 Capital of Texas Highway,
                           South Austin, Texas 78746
                                 (512) 329-2499
         (Address and Telephone Number of Principal Executive Offices)


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.

                               [X]  Yes  [ ]  No

Number of shares outstanding of each of the issuer's classes of common stock, 
as of November 11, 1998: Common Stock, $.001 par value, 23,476,965 shares.




<PAGE>   2
                         QUARTERLY REPORT ON FORM 10-Q
                        THREE MONTHS ENDED JUNE 29, 1998

                                     INDEX
<TABLE>
<CAPTION>

<S>            <C>                                                          <C> 
Title Page.................................................................. 1 

Index....................................................................... 2

PART I - FINANCIAL INFORMATION 

     ITEM 1.   Financial Statements

               Condensed Consolidated Balance Sheets - September 28, 1998
               and March 30, 1998........................................... 3

               Condensed Consolidated Statements of Operations for the 
               Three and Six Months Ended September 28, 1998 and 
               September 29, 1997........................................... 4

               Condensed Consolidated Statements of Cash Flows for the Six 
               Months Ended September 28, 1998 and September 29, 1997....... 5

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

     ITEM 2.   Managements's Discussion and Analysis of Financial 
               Condition and Results of Operations.......................... 9

PART II - OTHER INFORMATION

     ITEM 1.   Legal proceedings........................................... 12

     ITEM 2.   Changes in Securities....................................... 12

     ITEM 3.   Defaults Upon Senior Securities............................. 12

     ITEM 4.   Submission of Matters to a Vote of Security-Holders......... 12   

     ITEM 5.   Other Information........................................... 12

     ITEM 6.   Exhibits and Reports on Form 8-K............................ 12 

SIGNATURES................................................................. 13                               

</TABLE>

                                       2
<PAGE>   3
Part 1 - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

 
                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                              SEPTEMBER 28,   MARCH 30,
                                                                  1998          1998
                                                              -------------   ---------
<S>                                                           <C>             <C>
ASSETS
 
Current assets:
  Cash and cash equivalents.................................    $  7,048       $   787
  Trade accounts receivable.................................       1,668         2,712
  Receivable from Fujitsu...................................         607         3,343
  Inventory.................................................       1,930         7,808
  Prepaid expenses and other assets.........................           2           512
                                                                --------       -------
          Total current assets..............................      11,255        15,162
Property and equipment, net.................................         696         3,325
                                                                --------       -------
Total assets................................................    $ 11,951       $18,487
                                                                ========       =======
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
Current liabilities:
  Trade accounts payable....................................    $    619       $ 6,091
  Accrued shutdown costs....................................       3,200            --
  Accrued severance costs...................................       2,420            --
  Accrued warranty and production costs.....................       1,772           647
  Accrued liabilities.......................................       1,061         4,436
  Payable to Fujitsu........................................       1,318         1,293
  Notes payable.............................................      20,000        15,000
                                                                --------       -------
          Total current liabilities.........................      30,390        27,467
                                                                --------       -------
          Total stockholders' deficit.......................     (18,439)       (8,980)
                                                                --------       -------
Total liabilities and stockholders' deficit.................    $ 11,951       $18,487
                                                                ========       =======
</TABLE>
 
     See accompanying notes to condensed consolidated financial statements.
 
                                       3
<PAGE>   4
 
                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                            THREE MONTHS    THREE MONTHS     SIX MONTHS      SIX MONTHS
                                                ENDED           ENDED           ENDED           ENDED
                                            SEPTEMBER 29,   SEPTEMBER 28,   SEPTEMBER 29,   SEPTEMBER 28,
                                                1997            1998            1997            1998
                                            -------------   -------------   -------------   -------------
<S>                                         <C>             <C>             <C>             <C>
Net sales.................................     $11,472         $ 4,396         $23,285         $12,229
Cost of sales.............................      10,063           4,402          21,238          10,992
                                               -------         -------         -------         -------
  Gross profit............................       1,409              (6)          2,047           1,237
                                               -------         -------         -------         -------
Operating expenses:
  Research and development, net...........        (152)            765           1,394           3,811
  Selling, general and administrative.....       3,535           3,880           7,135           6,954
  Severance costs.........................          --              --              --           5,248
  Shutdown costs..........................          --           4,125              --           4,125
                                               -------         -------         -------         -------
          Total operating expenses........       3,383           8,770           8,529          20,138
                                               -------         -------         -------         -------
  Gain on sale of subsidiary..............          --           2,500              --           2,500
  Gain on sale of intellectual property...          --           7,550              --           7,550
                                               -------         -------         -------         -------
          Income (loss) from operations...      (1,974)          1,274          (6,482)         (8,851)
Interest expense, net.....................        (933)           (296)         (1,584)           (608)
                                               -------         -------         -------         -------
          Income (loss) before income
            taxes.........................      (2,907)            978          (8,066)         (9,459)
Income tax provision (benefit)............          --              --              --              --
                                               -------         -------         -------         -------
          Net income (loss)...............     $(2,907)        $   978         $(8,066)        $(9,459)
                                               =======         =======         =======         =======
Net income (loss) applicable to common
  shareholders............................     $(2,907)        $   978         $(8,066)        $(9,459)
                                               =======         =======         =======         =======
Basic net income (loss) per share.........     $ (0.12)        $   .04         $ (0.34)        $ (0.40)
                                               =======         =======         =======         =======
Weighted average common shares
  outstanding -- Basic....................      23,547          23,477          23,542          23,477
                                               =======         =======         =======         =======
Diluted net income (loss) per share.......     $ (0.12)        $  0.02         $ (0.34)        $ (0.40)
                                               =======         =======         =======         =======
Weighted average common shares
  outstanding -- Diluted..................      23,547          43,477          23,542          23,477
                                               =======         =======         =======         =======
</TABLE>
 
     See accompanying notes to condensed consolidated financial statements.
 
                                       4
<PAGE>   5
 
                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                               SIX MONTHS      SIX MONTHS
                                                                  ENDED           ENDED
                                                              SEPTEMBER 28,   SEPTEMBER 29,
                                                                  1998            1997
                                                              -------------   -------------
                                                               (UNAUDITED)     (UNAUDITED)
<S>                                                           <C>             <C>
Cash flows from operating activities:
  Net loss..................................................     $(9,459)        $(8,066)
  Adjustments to reconcile net loss to cash 
     provided by (used in) operating activities:
     Depreciation and amortization..........................       1,642           2,822
     Write-down of property and equipment...................       1,089              --
     Change in assets and liabilities:
       Trade accounts receivable............................       1,044           5,041
       Receivable from Fujitsu..............................       2,736          (4,758)
       Inventory............................................       5,878           1,850
       Prepaid expenses.....................................         510             539
       Trade accounts payable...............................      (5,472)         (7,224)
       Accrued shutdown costs...............................       3,200              --
       Accrued severance costs..............................       2,420              --
       Accrued warranty and production costs................       1,125              --
       Payable to Fujitsu...................................          25           4,946
       Accrued liabilities..................................      (3,375)         (5,117)
                                                                 -------         -------
          Net cash provided by (used in) operating
            activities......................................       1,363          (9,967)
                                                                 -------         -------
Cash flows from investing activities:
  Capital expenditures......................................        (102)         (1,419)
                                                                 -------         -------
Cash flows from financing activities:
  Proceeds from issuance of common stock....................          --              11
  Proceeds from borrowings on notes payable.................       5,000          12,500
                                                                 -------         -------
       Net cash provided by financing activities............       5,000          12,511
                                                                 -------         -------
       Net increase in cash and cash equivalents............       6,261           1,125
Cash and cash equivalents at beginning of period............         787           2,811
                                                                 -------         -------
Cash and cash equivalents at end of period..................     $ 7,048         $ 3,936
                                                                 =======         =======
</TABLE>
 
     See accompanying notes to condensed consolidated financial statements.
 
                                       5
<PAGE>   6
 
                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY
 
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
(1) FINANCIAL STATEMENT PRESENTATION
 
     The preceding financial statements of ROSS Technology, Inc. and subsidiary
(the "Company") have been prepared without audit pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC") and, in the
opinion of management, reflect all adjustments necessary, such adjustments being
of a normal recurring nature, to present fairly the financial condition and the
results of operations for such interim periods. As a result of the Company's
continued financial deterioration, in July 1998, the Company's Board of
Directors adopted and Fujitsu Limited ("Fujitsu"), as the holder of a majority
of the outstanding shares of Common Stock entitled to vote and all outstanding
shares of Preferred Stock, approved the Plan of Complete Liquidation and
Dissolution. As a result of this action, the Company changed its basis of
accounting from a going concern basis to a liquidation basis. Accordingly, the
carrying values of assets as of September 28, 1998 are presented at estimated
net realizable values and liabilities are presented at estimated amounts
required to liquidate and dissolve the Company. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations; however, management believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto for the fiscal year ended March
30, 1998. The results for interim periods are not necessarily indicative of the
results for the respective fiscal years.
 
(2) INVENTORIES
 
<TABLE>
<CAPTION>
                                                              SEPTEMBER 28,   MARCH 30,
                                                                  1998          1998
                                                              -------------   ---------
<S>                                                           <C>             <C>
Die bank....................................................     $  475        $  694
Work-in-process.............................................        724         5,297
Finished goods..............................................        731         1,817
                                                                 ------        ------
                                                                 $1,930        $7,808
                                                                 ======        ======
</TABLE>
 
     Die bank inventory, consisting of silicon wafers and cut and tested die, is
comparable to raw material inventory in other manufacturing industries.
Work-in-process inventory includes work in process as well as the Company's
inventories of multi-die packages (MDPs) and components and sub-systems to be
incorporated into module, board and system products. Finished goods inventory
includes finished module, board and system products as well as MDPs and ASICs
offered for sale to OEM customers.
 
(3) NOTES PAYABLE
 
     The notes payable to a bank at September 28, 1998, were outstanding under a
$20,000,000 revolving credit facility with a bank, due November 30, 1998.
Interest accrues at the bank's quoted rate (6.3% at September 28, 1998). The
notes payable are guaranteed by Fujitsu. The credit facility and Fujitsu's
guaranty expire on December 31, 1998.
 
(4) NET INCOME (LOSS) PER COMMON SHARE
 
     Basic earnings (loss) per share is based on the weighted average of all
common shares issued and outstanding, and is calculated by dividing net income
(loss) available to common stockholders by the weighted average shares
outstanding during the period. Diluted earnings per share is calculated by
dividing net income (loss) available to common stockholders by the weighted
average number of common shares used in
 
                                       6
<PAGE>   7
                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY
 
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
the basic calculation plus the number of common shares that would be issued
assuming conversion of all potentially dilutive common shares outstanding.
 
<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED               SIX MONTHS ENDED
                                    -----------------------------   -----------------------------
                                    SEPTEMBER 29,   SEPTEMBER 28,   SEPTEMBER 29,   SEPTEMBER 28,
                                        1997            1998            1997            1998
                                    -------------   -------------   -------------   -------------
<S>                                 <C>             <C>             <C>             <C>
Net income (loss) applicable to
  common stockholders.............     $(2,907)        $   978         $(8,066)        $(9,459)
                                       =======         =======         =======         =======
Weighted average shares
  outstanding -- Basic............      23,547          23,477          23,542          23,477
                                       =======         =======         =======         =======
Basic income (loss) per share.....     $  (.12)        $   .04         $  (.34)        $ (0.40)
                                       =======         =======         =======         =======
Weighted average shares
  outstanding -- Diluted..........      23,547          43,477          23,542          23,477
                                       =======         =======         =======         =======
Diluted income (loss) per share...     $  (.12)        $   .02         $  (.34)        $ (0.40)
                                       =======         =======         =======         =======
</TABLE>
 
     For the quarter ended September 28, 1998 options totaling 2,361,483 shares
of common stock were excluded from the computation of diluted earnings per share
because they would have been antidilutive for this period. For the quarter ended
September 29, 1997, options totaling 739,468 were excluded from the computation
of diluted earnings per share because they would have been antidilutive for that
period. For the six month period ended September 28, 1998, options totaling
3,033,684 and the conversion of Series B Convertible Preferred Stock to
20,000,000 shares of common stock were excluded from the computation of dilutive
earnings per share because they would have been antidilutive for this period.
For the six month period ended September 29, 1997, options totaling 717,130 were
excluded from the computation of diluted earnings per share because they would
have been antidilutive for that period.
 
(5) SEVERANCE COST
 
     As previously reported, the Company has commenced an orderly shutdown of
its operations. In conjunction with the Company's orderly shutdown of its
operations and in order to provide certain employees with an incentive to
continue his or her employment with the Company, the Company adopted an Employee
Retention and Severance Plan (the "Retention Plan"). The Company provided
severance packages to all eligible terminated employees as required by its
general severance policy, and substantially all of the executive officers were
retained pursuant to individual retention agreements. Given the Company's
uncertain financial position, retention agreements were provided by the Company
to such executive officers to provide incentives so that the key personnel
necessary to effect the sale of the Company's assets remained with the Company
until such time that their services were no longer required. The total cost of
the Retention Plan and severance packages totals $5.2 million, of which $3.2
million relates to prior contractual obligations of the Company and obligations
of the Company under its general severance policy. At June 29, 1998, these
severance costs met the criteria as stated in Emerging Issues Task Force issue
No. 94-3 and, therefore, these severance costs have been accrued in the first
quarter of Fiscal 1999. These severance costs are not of a normal recurring
nature.
 
     As part of the preparation for the shutdown of the Company's business, on
June 1, 1998, the Company issued notices to its employees under the Federal
Workers Adjustment and Retraining Notification Act (the "WARN Act"). These
notices provided advance notice to all employees of the scheduled termination of
their employment in connection with the shutdown. Approximately 138 employees,
or 70% of the Company's work force (excluding employees at the Company's Design
Center in Israel), were laid off on July 31, 1998, including the members of the
Company's "Viper" development team.
 
                                       7
<PAGE>   8
                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY
 
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(6) GAIN ON SALE OF SUBSIDIARY
 
     On August 10, 1998, the Company sold all of the issued and outstanding
shares of capital stock of ROSS Semiconductors (Israel) Ltd. ("RIL") to Fujitsu
for $2.5 million. In Fiscal 1998, the Company recorded a $1.1 million charge to
write-down its investment in RIL to $0. Accordingly, the sale of RIL resulted in
a gain of $2.5 million.
 
(7) GAIN ON SALE OF INTELLECTUAL PROPERTY
 
     On July 27, 1998, the Company sold certain intellectual property rights
(the "Acquired IP") to Fujitsu (subject to a license back of certain of those
rights) for $7.6 million. The Acquired IP had a book value of $0. Accordingly,
the sale of the Acquired IP resulted in a gain of $7.6 million.
 
(8) OTHER
 
     The Company has entered into an Asset Purchase Agreement (the "Asset
Purchase Agreement") to sell its manufacturing, sales and service operations and
certain assets related to the Company's 32-bit hyper-SPARC(TM) business (the
"BridgePoint Sale") to a newly-formed Texas corporation ("Buyer"), of which Joe
D. Jones (currently Vice President of Operations of the Company) is president
and sole stockholder. The Asset Purchase Agreement provides for an aggregate
consideration of $5.66 million, of which $250,000 will be deposited by Buyer
into an escrow account for a holdback amount to cover possible indemnification
claims. Also, the Company will pay $1.72 million to the Buyer at the closing in
consideration for the Buyer's assumption of and undertaking to pay, discharge
and perform certain warranty repair liabilities of the Company.
 
     In furtherance of the Company's previously announced plans to commence an
orderly shutdown of its operations, on July 22, 1998 the Company adopted a Plan
of Complete Liquidation and Dissolution (the "Plan of Liquidation") pursuant to
which the Company will be liquidated by the sale of all or substantially all of
its remaining assets and payment of claims, obligations and expenses owing to
the Company's creditors. The Company does not believe that it will have any
funds or assets available for distribution to either preferred or common
stockholders.
 
     The BridgePoint Sale and the Plan of Liquidation have been approved by
Fujitsu, as holder of a majority of the outstanding shares of the Company's
common stock and all of the outstanding shares of the Company's Series B
Convertible Preferred Stock. The Company has filed a preliminary information
statement with respect to the BridgePoint Sale and the Plan of Liquidation with
the SEC and will mail the information statement to its stockholders following
the SEC's review and clearance of the preliminary information statement. The
BridgePoint Sale will not be effective until at least twenty days after the
mailing of the information statement and following satisfaction or waiver of the
other conditions to that sale. The Plan of Liquidation will not be effective
until at least twenty days after the mailing of the information statement. The
Company intends to proceed with liquidation and dissolution regardless of
whether the BridgePoint Sale is consummated.
 
     The Company estimates total future obligations and commitments associated
with the Company's planned shutdown of its operations, including employee
related costs, at approximately $10.4 million (excluding the Company's
obligations under its revolving credit facility guaranteed by Fujitsu). The
Company has received gross proceeds of $10.1 million from the IP Sale and the
sale of RIL, and will receive approximately $3.9 million of proceeds (net of
payment for warranty liability assumption) and will receive approximately $1.9
million for cost reimbursements if the BridgePoint Sale is consummated.
 
(9) RECLASSIFICATIONS

     Certain reclassifications have been made to conform prior periods data 
to the current presentation. 



                                       8
<PAGE>   9
ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                  RESULTS OF OPERATIONS


CAUTIONARY STATEMENT

     This Quarterly Report contains forward-looking statements, within the 
meaning of the Private Securities Litigation Reform Act of 1995, with respect 
to the financial condition, results of operations and business of ROSS 
Technology, Inc. and its subsidiary (collectively, unless the context otherwise 
requires, "ROSS", the "Company", or the "Registrant"). Such statements are 
subject to certain risks and uncertainties that could cause actual results to 
differ materially and adversely from those set forth in the forward-looking 
statements, including without limitation the availability of financial 
resources adequate to the Company's short-, medium- and long-term needs, 
general economic conditions, and the other risks and uncertainties described 
from time to time in the Company's public announcements and SEC filings, 
including without limitation the Company's Current, Quarterly, and Annual 
Reports on Forms 8-K, 10-Q, and 10-K, respectively. The Company does not 
undertake to update any written or oral forward-looking statement that may be 
made from time to time by or on behalf of the Company.

     The information contained in this Quarterly Report is not a complete 
description of the Company's business or the risks associated with an 
investment in the Company. More complete discussions can be found in the 
Company's Annual Report on Form 10-K for the fiscal year ended March 30, 1998, 
as supplemented by the information contained in the Current Reports on Form 8-K 
dated July 30, 1998 and August 11, 1998 and this Quarterly Report.

RESULTS OF OPERATIONS

     Net Sales. Net sales in the three month period ended September 28, 1998
(the "second quarter") of the fiscal year ending March 29, 1999 ("Fiscal 1999")
decreased 61.7% to $4.4 million from $11.5 million in the corresponding period
of Fiscal 1998. This reduction in sales reflects the continued decline in demand
for the Company's 32-bit products and the previously reported migration of the
Company's primary customers to 64-bit products sold by the Company's
competitors, primarily Sun. A similar decline in sales is also reflected in the
47.5% decrease in net sales during the first six months of Fiscal 1999 as
compared to the corresponding period in Fiscal 1998. This reduction was
mitigated by a $5.0 million end of life ("EOL") order from Fujitsu. This order
was placed and shipped during the first quarter of Fiscal 1999 in connection
with Company's previously announced EOL program, which provided the Company's
customers the opportunity to place EOL orders until July 31, 1998, with all such
orders to be shipped on or before November 28, 1998.
 
     Gross Profit. Gross profit as a percentage of net sales for the quarter
ended September 29, 1998 decreased to (.1)% as compared to 12.3% of net sales
for the comparable period in Fiscal 1998. This decrease reflected a sharp
decrease in sales without a decrease of equal magnitude in the Company's
manufacturing overhead. In contrast, for the six month period ended September
28, 1998, gross profit as a percentage of net sales increased to 10.1% as
compared to 8.8% for the corresponding period in Fiscal 1999. This increase was
primarily attributable to the Company's ability to ship orders from stock which
allowed the Company to reduce its manufacturing overhead during the first
quarter of Fiscal 1999. This reduction in manufacturing overhead in the first
quarter of Fiscal 1999 coupled with an equal level of such costs in the second
quarter of Fiscal 1999 provided the Company with a slight percentage increase in
gross profit for the first six months of Fiscal 1999 versus the same period of
Fiscal 1998.
 
     Research and Development Expense. Research and development ("R&D") expense
includes costs associated with the definition, design and development of new
products. Net R&D expenses were 17.4% of net sales for the quarter ended
September 28, 1998, compared with (1.3)% of net sales for the comparable period
in Fiscal 1998. Absolute R&D expenses increased $.9 million in the quarter ended
September 28, 1998 from the comparable period in the prior fiscal year. This
increase was primarily attributable to reimbursement by
 
                                       9
<PAGE>   10
Fujitsu of $4.5 million in expenses in the second quarter of Fiscal 1998
relating to the development of the Company's 64-bit Viper project pursuant to a
development agreement between the Company and Fujitsu (the "Viper Development
Agreement"). No such reimbursements occurred during the second quarter of Fiscal
1999. As previously reported, the Company will not complete development of the
"Viper" project and the Company and Fujitsu have terminated the Viper
Development Agreement. For the same reasons, net R&D expenses were 31.2% of net
sales for the six month period ended September 28, 1998 as compared to 6.0% for
the corresponding period in Fiscal 1998. During the first six months of Fiscal
1998, the Company received $9.0 from Fujitsu for expense reimbursement. No such
payment was received during the first six months of Fiscal 1999.
 
     For the second quarter of Fiscal 1999, gross R&D expense was significantly
lower than the level experienced in the corresponding period of Fiscal 1998
reflecting that on July 31, 1998, the Company laid off approximately 70% of its
domestic work force, including all members of the Company's R&D operations.
 
     Selling, General and Administrative Expense. Selling, general and
administrative ("SG&A") expenses were 88.3% of net sales for the quarter ended
September 28, 1998, compared with 30.8% of net sales for the comparable period
in Fiscal 1998. Absolute SG&A expenses increased $.3 million in the quarter
ended September 28, 1998 from the comparable period in the prior fiscal year.
The increase in SG&A expense is primarily attributable to an increase in legal
and related expenses associated with the Company's planned shutdown of its
operations, particularly expenses related to the Company's obligations under the
federal Workers Adjustment and Retraining Notification Act (the "WARN Act").
 
     For similar reasons, SG&A expenses for the six months ended September 28,
1998 increased to 56.9% of net sales as compared to 30.6% for the comparable
period in Fiscal 1998.
 
     Severance Cost. In conjunction with the Company's orderly shutdown of its
operations and in order to provide certain employees with an incentive to
continue his or her employment with the Company, the Company adopted an Employee
Retention and Severance Plan (the "Retention Plan"). The Company provided
severance packages to all eligible terminated employees as required by its
general severance policy, and substantially all of the executive officers were
retained pursuant to individual retention agreements. Given the Company's
uncertain financial position, retention agreements were provided by the Company
to such executive officers to provide incentives so that the key personnel
necessary to effect the sale of the Company's assets remained with the Company
until such time that their services were no longer required. The total cost of
the Retention Plan and severance packages totals $5.2 million, of which $3.2
million relates to prior contractual obligations of the Company and obligations
of the Company under its general severance policy. At June 29, 1998, these
severance costs met the criteria as stated in Emerging Issues Task Force issue
No. 94-3 and, therefore, these severance costs have been accrued in the first
quarter of Fiscal 1999.
 
     As part of the preparation for the shutdown of the Company's business, on
June 1, 1998, the Company issued notices to its employees under the WARN Act.
These notices provided advance notice to all employees of the scheduled
termination of their employment in connection with the shutdown. Approximately
138 employees, or 70% of the Company's work force (excluding employees at the
Company's Design Center in Israel), were laid off on July 31, 1998, including
the members of the Company's "Viper" development team.
 
     Gain on Sale of Subsidiary. On August 10, 1998, the Company sold all of the
issued and outstanding shares of capital stock of RIL to Fujitsu for $2.5
million. In Fiscal 1998, the Company recorded a $1.1 million charge to
write-down its investment in RIL to $0. Accordingly, the sale of RIL resulted
in a gain of $2.5 million.
 
     Gain on Sale of Intellectual Property. On July 27, 1998, the Company sold
certain intellectual property (the "Acquired IP") to Fujitsu for $7.6 million,
with a royalty-free license back of certain of those rights.  The Acquired IP
had a book value of $0. Accordingly, the sale of the Acquired IP resulted in a
gain of $7.6 million.
 
     Net Interest Expense. The Company had net interest expense of $.3 million
for the quarter ended September 28, 1998, versus interest expense of $.9 million
in the quarter ended September 29, 1997, reflecting a lower level of debt during
the first quarter of Fiscal 1999 as compared to the corresponding period in
Fiscal
 
                                       10
<PAGE>   11
 
1998. For similar reasons, interest expense decreased to $.6 million for the six
months ended September 28, 1998 as compared to $1.6 million for the comparable
period in Fiscal 1998.
 
     Income Tax Expense. The Company has established a 100% reserve against its
deferred income tax asset and will not record income tax expense or benefit
until such time as the Company achieves profitability. Although it is
anticipated that the Company will not generate any future tax obligations as a
result of any future transactions, it is possible that such tax obligations may
occur.
 
     Future Operating Results. The Company intends to dissolve and liquidate and
pay out the net proceeds of the sale of its remaining assets to satisfy the
Company's obligations to its creditors. The Company does not believe it will
have any funds or assets remaining to make distributions to either preferred or
common stockholders.
 
LIQUIDITY AND CAPITAL RESOURCES

     The Company experienced significant negative cash flows during the fiscal
year ended March 30, 1998. Historically, the Company has been dependent on
Fujitsu for its capital requirements. Fujitsu has provided a guarantee for a
credit facility with DKB for a maximum principal amount of $20 million. The line
of credit and guaranty are scheduled to expire on November 30 and December 31,
1998, respectively. As of November 11, 1998, the Company has borrowed the
maximum $20 million of available credit provided by the existing credit
facility. There is no assurance that DKB will renew the line of credit or that
Fujitsu will agree to extend or renew the guaranty, on their existing terms or
otherwise. In addition, there can be no assurance that the Company will not
experience negative cash flow from operations and the Company may in future be
required to seek additional external sources of financing to fund the shutdown
of its operations, which it does not believe it will be able to obtain from
Fujitsu or any other third party. Although the Company hopes it will have
sufficient funds from the sale of its inventory and assets to fund an orderly
shutdown of its operations, the Company may nevertheless be forced to seek
protection under Federal bankruptcy laws.
                                           
     On May 18, 1998, the Company was informed by The Nasdaq Stock Market of the
Company's failure to maintain certain listing requirements for the Nasdaq
National Market -- failure to maintain a closing bid price of greater than or
equal to $1.00 per share and failure to maintain a market value of public float
greater than or equal to $5 million. On July 15, 1998, the Company received
another notice from The Nasdaq Stock Market informing the Company that it no
longer met the minimum net tangible assets requirement for continued listing on
the Nasdaq National Market. As a result of the Company's noncompliance with
these rules, the Company's common stock was delisted from the Nasdaq National
Market effective at the close of business on July 31, 1998. The Company's Common
Stock continues to trade on the over-the-counter bulletin board market
maintained by the Nasdaq Stock Market.

     The Company's principal source of liquidity as of September 28, 1998 
consisted of $7.0 million of cash.  The Company has no availability under any 
credit facility. As of September 28, 1998, the Company had negative working 
capital of $19.1 million, an accumulated deficit of $149.3 million and 
stockholders deficit of $18.4 million.


                                       11
<PAGE>   12
ITEM 1.   LEGAL PROCEEDINGS

          Kris Vorm v. ROSS Technology, Inc., Cause No. 9704693 (District Court 
of Travis County, Texas). On April 18, 1997, the above-referenced action was 
filed against the Company in the 353rd Judicial District Court of Travis 
County, Austin, Texas (the "Vorm Action"). The Vorm Action was brought by Kris 
Vorm, a former employee of the Company, alleging that in late May 1996 the 
Company, through false and material representations and promises, prevented him 
from selling shares of common stock of the Company owned by him. Plaintiff 
further contended that the Company misrepresented that it would provide him a 
low interest loan to cover his tax liability in connection with his having 
purchased his shares. Plaintiff sought compensation in an unspecified amount 
which the Company estimates, based upon Plaintiff's allegations, to approximate 
$500,000. Plaintiff also sought exemplary damages, as well as attorneys' fees, 
costs, and pre-judgment and post-judgment interest. The Company and the
plaintiff have settled the Vorm Action for $190,000. The Company did not admit
to any liability under the Vorm Action.             

          Hummingbird Communications, Ltd. v. ROSS Technology, Inc., Cause No.
9810439 (District Court of Travis County, Texas). On October 7, 1998, the
above-referenced action was filed against the Company in the 261st Judicial
District Court of Travis County, Austin, Texas (the "Hummingbird Action"). The
Hummingbird Action was brought by Hummingbird Communications, Ltd.
("Hummingbird"), a vendor of computer software to the Company, alleging that the
Company had not paid amounts due to Hummingbird pursuant to an agreement between
Hummingbird and the Company. Hummingbird seeks damages of $750,000, plus $50,000
per year from the inception of the agreement (August 19, 1996), plus reasonable
attorney's fees.

          The Company has filed an answer to the complaint and has denied 
liability. The Company believes that it has meritorious defenses to the
Hummingbird Action and intends to defend it vigorously. Given the early stage
of the proceedings, the fact that the ultimate outcome will depend upon the
resolution of disputed issues of fact and law and the inherent uncertainties of
litigation such as this, it is not possible at this time to predict the
ultimate outcome of the matter with any degree of certainty, although based on
information presently known to management, the Company does not believe that
the ultimate resolution of this lawsuit will have a material adverse effect
upon the financial condition or results of operation of the Company, although
the result of this lawsuit will not affect the Company's decision to proceed
with an orderly shutdown of its operations.

          The Company is involved in routine litigation arising in the ordinary
course of business, and, while the results of the proceedings cannot be 
predicted with certainty, the Company believes that the final outcome of such 
proceedings will not be material.


ITEM 2.   CHANGES IN SECURITIES

          NONE

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          NONE

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

          NONE

ITEM 5.   OTHER INFORMATION 

          The BridgePoint Sale and the Plan of Liquidation are still pending,
          subject to clearance of stockholder materials by the Securities
          and Exchange Commission. Both the BridgePoint Sale and the Plan of 
          Liquidation have been approved by the Company's majority stockholder.
          The Company anticipates that it will consummate the BridgePoint Sale
          by the end of 1998, although that transaction remains subject to
          certain contingencies, including financing, and accordingly no
          assurances can be given. The Company continues to pursue the
          previously-announced orderly shutdown of its operations and
          anticipates that it will cease all operations by early 1999. The
          Company does not believe that it will have any funds or assets
          available for distribution to common or preferred stockholders.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          Exhibit No.         Description
          -----------         -----------

          10.1                Termination Agreement dated as of August 31, 1998
                              between the Company and Fujitsu Limited

          10.2                Technology Framework Agreement between the 
                              Company, Fujitsu Limited and BridgePoint 
                              Technical Manufacturing Corporation

          27                  Financial Data Schedule

     (b)  Reports on Form 8-K

          Two Current Reports on Form 8-K dated July 30, 1998 and August 11, 
1998 reporting the delisting of the Company's Common Stock from the Nasdaq 
National Market, the agreement to sell the Company's BridgePoint business
unit, the adoption of the Plan of Liquidation and the sale of certain
intellectual property to Fujitsu.              


                                       12
<PAGE>   13
                                   SIGNATURES

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

                                      ROSS TECHNOLOGY, INC.,
                                      a Delaware corporation


Date:  November 12, 1998              /s/ F. S. (KIT) WEBSTER III
                                      ----------------------------------------
                                      F. S. (Kit) Webster III
                                      Chief Financial Officer



                                      13
<PAGE>   14

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>

EXHIBIT 
NUMBER              DESCRIPTION
-------             -----------
<S>                 <C>
  10.1              Termination Agreement dated as of August 31, 1998
                    between the Company and Fujitsu Limited
                    
  10.2              Technology Framework Agreement between the 
                    Company, Fujitsu Limited and BridgePoint 
                    Technical Manufacturing Corporation

  27                Financial Data Schedule
</TABLE>