<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 June 30, 1997

                                       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.)

                        5316 Highway 290 West, Suite 500
                            Austin, Texas 78735-8930
                                 (512) 436-2000
         (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 August 8, 1997: Common Stock, $.001 par value, 23,534,123 shares.


<PAGE>   2


                             ROSS TECHNOLOGY, INC.

                         QUARTERLY REPORT ON FORM 10-Q
                        THREE MONTHS ENDED JUNE 30, 1997

                                     INDEX

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                           <C>
Title Page .................................................................. 1

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

PART I - FINANCIAL INFORMATION

   ITEM 1.  Financial Statements

            Condensed Consolidated Balance Sheets - June 30,
            1997 and March 31, 1997 ......................................... 3

            Condensed Consolidated Statements of Operations for the
            Three Months Ended June 30, 1997 and July 1, 1996................ 4

            Condensed Consolidated Statements of Cash Flows for the
            Three Months Ended June 30, 1997 and July 1, 1996 ............... 5

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

   ITEM 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations ............................. 7

PART II - OTHER INFORMATION

   ITEM 1.       Legal Proceedings ......................................... 14

   ITEM 2.       Changes in Securities ..................................... 14

   ITEM 3.       Defaults Upon Senior Securities  .......................... 14

   ITEM 4.       Submission of Matters to a Vote of Security-Holders ....... 14

   ITEM 5.       Other Information ......................................... 15

   ITEM 6.       Exhibits and Reports on Form 8-K .......................... 15

SIGNATURES  ................................................................ 16
</TABLE>




                                      -2-
<PAGE>   3
PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                JUNE 30,     MARCH 31,
                                                                                  1997         1997
                                                                                ---------    ---------
                                                                               (UNAUDITED)
<S>                                                                             <C>          <C>      
ASSETS
Current assets:
  Cash and cash equivalents .................................................   $   7,591    $   2,811
  Trade accounts receivable, net allowance of $1,675 and $1,555, respectively       7,439       11,297
  Receivable from Fujitsu ...................................................       1,937        3,320
  Inventory .................................................................      15,285       16,308
  Prepaid expenses and other assets .........................................       4,142        3,331
                                                                                ---------    ---------

          Total current assets ..............................................      36,394       37,067

Property and equipment, net .................................................      14,184       17,752
                                                                                ---------    ---------

Total assets ................................................................   $  50,578    $  54,819
                                                                                =========    =========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Trade accounts payable ....................................................   $  15,247    $  19,194
  Accrued liabilities .......................................................       4,238        8,307
  Payable to Fujitsu ........................................................       6,477        4,043
  Notes payable .............................................................      50,000       43,500
                                                                                ---------    ---------

          Total current liabilities .........................................      75,962       75,044

Stockholders' deficit:
  Common stock ..............................................................          23           23
  Additional paid-in capital ................................................      82,564       82,564
  Accumulated deficit .......................................................    (106,720)    (101,561)
                                                                                ---------    ---------

                                                                                  (24,133)     (18,974)

  Less: treasury stock ......................................................      (1,251)      (1,251)
                                                                                ---------    ---------

          Total stockholders' deficit .......................................     (25,384)     (20,225)
                                                                                ---------    ---------

Total liabilities and stockholder' deficit ..................................   $  50,578    $  54,819
                                                                                =========    =========
</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)




<TABLE>
<CAPTION>
                                            THREE          THREE
                                            MONTHS         MONTHS
                                            ENDED          ENDED
                                           JUNE 30,        JULY 1,
                                             1997          1996
                                          ----------    ----------
                                          (UNAUDITED)   (UNAUDITED)
<S>                                       <C>           <C>       
Net sales .............................   $   11,813    $   30,912
Cost of sales .........................       11,175        16,730
                                          ----------    ----------

  Gross profit ........................          638        14,182
                                          ----------    ----------

Operating expenses:
  Research and development, net .......        1,546         4,399
  Selling, general and administrative .        3,600         3,490
  Amortization of goodwill ............         --             272
                                          ----------    ----------

      Total operating expenses ........        5,146         8,161
                                          ----------    ----------

      Income (loss) from operations ...       (4,508)        6,021

Interest income (expense), net ........         (651)          107
                                          ----------    ----------
      Income (loss) before income taxes       (5,159)        6,128
Income tax expense (benefit) ..........         --           2,145
                                          ----------    ----------

      Net income (loss) ...............   $   (5,159)   $    3,983
                                          ==========    ==========


Net income (loss) applicable to
      common shareholders .............   $   (5,159)   $    3,983
                                          ==========    ==========

Net income (loss) per share ...........   $    (0.22)   $     0.17
                                          ==========    ==========

Weighted average common and common
      equivalent shares outstanding ...       23,525        23,387
                                          ==========    ==========
</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)

<TABLE>
<CAPTION>
                                                            THREE MONTHS  THREE MONTHS
                                                               ENDED        ENDED
                                                              JUNE 30,      JULY 1,
                                                                1997         1996
                                                             ---------    ---------
                                                            (Unaudited)   (Unaudited)
<S>                                                          <C>          <C>      
Cash flows from operating activities:
  Net income (loss) ......................................   $  (5,159)   $   3,983
  Adjustments to reconcile net income (loss) to
    cash used in operating activities:
    Depreciation and amortization ........................       1,490        1,484
    Change in assets and liabilities:
      Trade accounts receivable ..........................       3,858       (5,740)
      Receivable from Fujitsu ............................       1,383        2,016
      Inventory ..........................................       1,023      (15,887)
      Prepaid expenses ...................................       1,353       (1,974)
      Trade accounts payable .............................      (3,947)       5,596
      Payable to Fujitsu .................................       2,434       (1,815)
      Accrued liabilities ................................      (4,069)         264
                                                             ---------    ---------
        Net cash used in operating activities ............      (1,634)     (12,073)
                                                             ---------    ---------

Cash flows from investing activities:
  Capital expenditures ...................................         (86)      (2,264)
                                                             ---------    ---------

Cash flows from financing activities:
  Proceeds from issuance of common stock .................        --             62
  Proceeds from borrowings on notes payable ..............       6,500         --
                                                             ---------    ---------

      Net cash provided by financing activities ..........       6,500           62
                                                             ---------    ---------

      Net increase (decrease) in cash and cash equivalents       4,780      (14,275)

Cash and cash equivalents at beginning of period .........       2,811       17,941
                                                             ---------    ---------

Cash and cash equivalents at end of period ...............   $   7,591    $   3,666
                                                             =========    =========
</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 financial statements of ROSS Technology, Inc. and subsidiary (the
"Company") included herein 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. 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 31, 1997, included in the Company's filing with the
SEC on Form 10-K. The results for interim periods are not necessarily
indicative of the results for the respective fiscal years.

(2)      INVENTORIES

<TABLE>
<CAPTION>
                                                        June 30,       March 31,
                                                          1997           1997
                                                       ----------     ----------
<S>                                                    <C>            <C>       
Die bank                                               $    4,235     $    4,496
Work-in-process                                             6,080          6,236
Finished goods                                              4,970          5,576
                                                       ----------     ----------
                                                       $   15,285     $   16,308
                                                       ==========     ==========
</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.





                                      -6-
<PAGE>   7

(3) NOTES PAYABLE

         In November 1996, the Company established a new credit facility (the
"DKB Facility") with The Dai-Ichi Kangyo Bank, Limited ("DKB"). The DKB
Facility was subsequently modified to a maximum $50 million unsecured line of
credit. The Company's majority stockholder, Fujitsu Limited, has provided a
guaranty to DKB with respect to the DKB Facility. The interest rate payable on
the DKB Facility is at DKB's stated rate, which at June 30, 1997, was 6.3125%,
and principal and interest are payable in full in a lump sum on December 31,
1997. As of June 30, 1997, the Company's outstanding unpaid principal balance
under the DKB Facility was $50 million, the maximum permitted thereunder.

(4) NET INCOME (LOSS) PER COMMON SHARE

         Net income (loss) per common share is computed using the weighted
average number of outstanding common stock and common stock equivalent shares,
when dilutive. Common equivalent shares include shares issuable pursuant to
outstanding options under the Company's stock option plan as determined by the
treasury stock method.

ITEM 2. MANAGEMENT'S 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, the
Company's dependence on the timely development, pre-production qualification,
manufacture, introduction and customer acceptance of new higher speed,
higher-margin products, the ability of the Company to successfully implement
its strategy of diversifying into the system products business, the various
effects on revenue, margins, inventories and operation expenses of
repositioning the Company's product lines and overall business, the effects of
building and maintaining product inventories in the Company's hands and in its
distribution channels, product return and credit risks with distributors,
resellers and other customers, the Company's dependence on distributors and
resellers for certain product sales to end-users, the impact on revenue,
margins and inventories of rapidly changing technology, competition, downward
pricing pressures and allocations of product among different distribution
channels, the effects of routine price degradation over time in each of the
Company's product lines, varying customer demand for the Company's products,
supply and manufacturing constraints and costs, the Company's dependence on
outside suppliers for wafer fabrication and raw materials, components and
certain 




                                      -7-
<PAGE>   8

manufacturing services, changes in plans, programs or expenses for research,
development, sales or marketing, the Company's ability to build and maintain
adequate staff infrastructures in the areas of microprocessor design, product
engineering and development, sales and marketing, finance, accounting and
administration, supplier disputes, customer warranty claims, 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 Form S-1 and Final Prospectus filed in November 1995 and the
Company's Current, Quarterly, and Annual Reports on Forms 8-K, 10-Q, and 10-K,
respectively. The Company cautions that the foregoing list of important factors
is not exclusive. 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 31, 1997,
and in the Final Prospectus, as supplemented by the information contained in
the Quarterly Reports on Forms 10-Q, and in this Quarterly Report.

RESULTS OF OPERATIONS

         Net Sales. Net sales in the three-month period ended June 30, 1997
(the "first quarter") of the fiscal year ending March 30, 1998 ("fiscal 1998")
decreased 62% to $11.8 million from $30.9 million in the corresponding period
of the fiscal year ended March 31, 1997 ("fiscal 1997"). This was due primarily
to a significant decline in sales to the Company's primary OEM microprocessor
chip customers, reflecting movement by those customers to competitors' 64-bit
products as compared to the Company's 32-bit products. Upgrade and systems
sales also declined in the first quarter of fiscal 1998 as compared to the
first quarter of fiscal 1997. Upgrade sales during the first quarter of fiscal
1997 were affected positively by the introduction of the Company's 150 MHz
upgrade product.

         Gross Profit. Gross profit as a percentage of net sales for the
quarter ended June 30, 1997, decreased to 5.4% as compared with 45.9% of net
sales for the comparable period in fiscal 1997. This decrease is primarily
attributable to the Company's relatively high cost of production, which in turn
is primarily attributable to overhead distributed over fewer units in fiscal
1998 compared to the similar period in fiscal 1997, and the usual erosion in
price of the Company's products over their life cycles. In addition, gross
profit was adversely affected by the Company's lack of new, higher-margin
microprocessor and upgrade subsystem module products.

         Research and Development Expense. Net research and development ("R&D")
expenses were 13.1% of net sales for the quarter ended June 30, 1997, compared
with 14.2% of net sales for the comparable period in fiscal 1997. Absolute R&D
expenses decreased $2.9 million in the quarter ended June 30, 1997, from the
comparable period in the prior fiscal 






                                      -8-
<PAGE>   9

year. This decrease was primarily attributable to reimbursement by Fujitsu of
$4.5 million in expenses relating to the development of the Company's 64-bit
Viper project pursuant to a Development Agreement between Fujitsu and the
Company. This decrease was partially offset by increases due to the addition of
new personnel and related overhead and outside contractor expenses in the areas
of new product design and new product development related to the Company's
Colorado 4 and Colorado 5 hyperSPARC(TM) and next generation Viper
microprocessor designs.

         Selling, General and Administrative Expense. Selling, general and
administrative ("SG&A") expenses were 30.5% of net sales for the quarter ended
June 30, 1997, compared with 11.3% of net sales for the comparable period in
fiscal 1997. Absolute SG&A expenses increased $.1 million in the quarter ended
June 30, 1997, from the comparable period in the prior year. The increase in
SG&A expense is primarily attributable to an increase in sales expenses as the
Company has added sales-related personnel and overhead, and by compensation
expenses related to the engagement of the Company's newly-hired President and
Chief Executive Officer partially offset by a decrease in marketing and
advertising - related expenses.

         Net Interest Expense. The Company had net interest expense of $.7
million for the quarter ended June 30, 1997, versus interest income of $.1
million in the quarter ended July 1, 1996, reflecting the costs of the
Company's $50 million credit facility with The Dai-Ichi Kangyo Bank, Limited
("DKB"). See "Liquidity and Capital Resources."

         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.

         Future Operating Results. The Company's financial condition
deteriorated significantly during fiscal 1997, and at the end of the first
quarter of fiscal 1998, the Company was continuing to experience significant
losses from operations. Subsequent to the end of fiscal 1997, the Company made
significant changes to the senior management team to assess the Company's
business and to implement changes necessary to restore the Company to a sound
financial condition. The Company depends solely upon its parent, Fujitsu
Limited, for additions to capital necessary to continue its operations. While
Fujitsu has stated that, "In accordance with our plan for ROSS Technology, we
(Fujitsu) are ready to provide the necessary funding through debt guarantees or
other types of financing for ROSS Technology not to incur cash flow shortages
through April 1, 1998", there can be no assurances that the Company will not in
the future require financing in addition to that committed by Fujitsu. See
"Liquidity and Capital Resources."

         The Company's operating results have in the past and may in the future
vary due to a number of factors, including availability and market acceptance
of new or enhanced versions of the Company's products, the Company's success in
entering new markets, the timing and extent 




                                      -9-
<PAGE>   10

of product development costs, changes in the mix of products sold and in the
mix of sales by distribution channel, competitive pricing pressures,
anticipated decreases in unit average selling prices of the Company's products,
availability and cost of products (particularly silicon wafers) from the
Company's suppliers, fluctuations in manufacturing yields, the gain or loss of
significant customers, new product introductions by the Company or the
Company's competitors, the competitiveness of the SPARC architecture and the
timing of significant orders, order cancellations or rescheduling, all as more
fully described in the Company's Registration Statement on Form S-1 which
became effective November 6, 1995, and the Final Prospectus of the same date,
and in the Company's subsequent SEC reports, including the Annual Report on
Form 10-K for Fiscal 1997. Any unfavorable change in the foregoing or other
factors could have a material adverse effect on the Company's business,
operating results and financial condition.

         The Company operates in an industry characterized by increasing
competition, rapidly changing technology, and increasingly aggressive pricing.
As a result, the Company's future operating results will depend to a
considerable extent on its ability to rapidly and continuously, develop and
introduce new microprocessor technologies that offer its customers enhanced
performance at competitive prices. The development of new high-performance
computer products is a complex and uncertain process requiring high levels of
innovation from the Company's designers and suppliers, as well as accurate
anticipation of customers' requirements and technological trends. The Company
is also increasingly dependent on the ability of its suppliers to design,
manufacture, and deliver advanced components required for the timely
introduction of new products. The failure of any of these suppliers to deliver
components on time or in sufficient quantities, or the failure of any of the
Company's designers to develop advanced innovative products on a timely basis,
could result in significant adverse impact on the Company's operating results.

         Once a hardware product is developed, the Company must rapidly bring
it to volume manufacturing, a process that requires accurate forecasting of
both volumes and configurations, among other things, in order to achieve
competitive yields and costs. Upon introduction of new products, the Company
must also manage the transition from older, displaced products to minimize
disruptions in customer ordering patterns, reduce levels of existing product
inventory, and ensure that adequate supplies of new products can be delivered
to meet customer demand.

         Historically, average selling prices for microprocessors in general,
and for the Company's products in the time period during which they have been
commercially available, have decreased over the life of each specific product.
The Company expects that the average selling prices of its products will
continue to be subject to significant downward pressure in the future. If the
Company is unable to introduce and gain market acceptance of new products with
higher average selling prices or reduce its costs sufficiently to offset
decreases in prices of existing products, the Company's gross profits and
operating results would be adversely affected. In addition, because the Company
is continuing to increase its operating expenses for new product development in
anticipation of increasing sales levels, the Company's business and operating
results would be adversely affected if such sales levels were not achieved.





                                     -10-
<PAGE>   11
         The Company intends to emphasize its upgrade business, in which the
Company's modules and motherboards are used to provide enhanced performance for
existing systems. In addition the Company will focus on sales to OEM customers,
which incorporate the Company's products into their products. The Company
intends to continue to explore the systems business in selling workstation and
server components together with SPARCplug(TM) systems which provide customers
with a unique form factor solution to their systems requirements.

         The Company believes that continued development of its systems
business will provide additional engines for future revenues and profits. There
can be no assurance, however, that this business segment will be successful.
The Company anticipates that the gross profit margins of these systems product
lines will be lower than those it has historically experienced in the OEM
microprocessor chip and upgrade subsystem module businesses. Also, for sales of
certain products through distributors, the Company is able to recognize revenue
from such sales only upon resale to end-users.

         As noted above, the Company has recently experienced lower than
expected demand for a number of its products, especially its lower speed
microprocessor chips and associated semiconductors and MBus modules, as well as
routine price degradation on older products. These trends are continuing and
are expected to continue for the foreseeable future.

         In addition, operating results could be adversely affected by general
economic and other conditions affecting the timing of customer orders and
capital spending or a downturn in the markets for microprocessors or
high-performance computer workstations.

Sales to Sun Microsystems, Inc. ("Sun"), historically the Company's largest OEM
customer, have varied substantially on a year-to-year and quarter-to-quarter
basis over the periods since fiscal 1991. As previously advised, the Company
anticipates that sales to Sun will continue to fluctuate significantly in the
future. The Company continues to pursue sales to Sun of its current and future
microprocessor products, but there can be no assurance that the Company will
achieve any future design wins with Sun.

         During the recent past, the Company's revenues and gross profit
margins have been substantially impacted by the mix of OEM, system and upgrade
subsystem module customers, as well as by the mix of high-end and low-end
products sold and the availability of new, higher-priced and higher-margin
microprocessor and upgrade subsystem module products. In addition, because the
Company is continuing to incur substantial operating expenses for new product
development in anticipation of increasing sales levels and to remain
competitive, the Company's business and results of operations would be
materially and adversely affected if such sales levels were not achieved.

         Although the Company is taking specific actions to improve gross
profit margins, it is anticipated that gross profit will continue to remain
under pressure for the foreseeable future





                                     -11-
<PAGE>   12

due to a variety of factors, including lower margins for system products,
continued industry-wide pricing pressures, relatively low unit volumes
processed by the Company's test and assembly facilities, increased competition,
and compressed product life cycles.

         R&D expenses are expected to increase, reflecting pre-production
qualification of the Colorado 5 hyperSPARC microprocessor and new product
design and development related to the Viper generation of microprocessors that
the Company expects to introduce in 1999. The Company expects that the level of
SG&A expenses will vary depending upon the overall sales effort undertaken and
the Company's distribution strategies. Although R&D and SG&A expenses can be
reduced over time if the Company's revenues are less than anticipated, the
Company believes that it is building an infrastructure that is critical to the
Company's future success and that represents a long-term investment in the
Company's future. Therefore, as in the recent past, the Company may decide to
undertake such expenses even if the result would be an increase in such
categories of expense as a percentage of net sales in a given fiscal quarter or
for a fiscal year as a whole.

         The Company expects interest expenses to be substantially higher on a
quarterly basis for the foreseeable future (as compared to fiscal 1997) as a
result of the Company's increased borrowing requirements. See "Liquidity and
Capital Resources."

         The Company has lost a number of executives, engineers and other
employees due to voluntary resignations. The loss of executives and other key
employees has negatively affected the overall quality and depth of the
Company's staff infrastructure and its management and accounting controls. The
Company is seeking to remedy these shortcomings as a priority matter through
new hiring and the use of consultants and outside contractors. However, the
impaired infrastructure and controls may have a material adverse effect on the
Company's business, results of operations and financial condition. The Company
has recently filled key management positions, including a Chief Executive
Officer and President, a Chief Financial Officer, a Vice President of Sales and
other key positions in sales, product engineering, finance and accounting.
Given the Company's recent performance and financial condition, hiring staff is
difficult.

         Although no decisions have been made, the Company anticipates that it
may need to implement additional incentive compensation programs in order to
attract and retain key employees and to motivate employees.

LIQUIDITY AND CAPITAL RESOURCES

         The Company experienced negative cash flows during the first quarter
of fiscal 1998 and at the end of the quarter had negative working capital and
negative stockholders' equity. The Company is dependent on its parent company,
Fujitsu, for its capital requirements. In November 1996 the Company established
a "New Credit Facility" with DKB for a maximum principal amount of $25 million;
in February 1997 such New Credit Facility was increased to a maximum





                                     -12-
<PAGE>   13

of $50 million. The New Credit Facility expires on March 31, 1998, and is
guaranteed by Fujitsu. At June 30, 1997, the principal amount outstanding under
the New Credit Facility was $50.0 million, due December 31, 1997. On June 18,
1997, the Company received a commitment from Fujitsu that, "In accordance with
our plan for ROSS Technology, we (Fujitsu) are ready to provide the necessary
funding through debt guarantees or other types of financing for ROSS Technology
not to incur cash flow shortages through April 1, 1998." Accordingly, the
Company believes that it will have adequate capital for its business through
April 1, 1998, and the Company is currently in discussions with Fujitsu
concerning additional capital requirements. However, there can be no assurance
that the Company will not experience negative cash flow from operations and the
Company may in the future be required to seek additional external sources of
financing for its operating needs. There can be no assurance that additional
capital, including capital from bank borrowings, will be available on terms
favorable to the Company, if at all, or that Fujitsu would be willing to
provide additional loan guarantees, equity infusions or other financial
assistance to the Company in the future. To the extent that additional capital
is raised through the sale of additional equity or convertible debt securities,
the issuance of such securities would likely result in substantial dilution to
the Company's then existing stockholders. In view of its position as the
Company's controlling stockholder, Fujitsu's concurrence is necessary for the
issuance of any additional debt or equity financing by the Company. The
Company's failure to obtain sufficient additional financing could make it
impossible for it to continue operations, force the Company to seek protection
under Federal bankruptcy law and/or affect the Company's listing on the Nasdaq
National Market (see "Item 5, Other Information").

         The Company's principal source of liquidity as of June 30, 1997,
consisted of $7.6 million of cash and cash equivalents. As of June 30, 1997,
the Company had negative working capital of $39.6 million, an accumulated
deficit of $106.7 million, and stockholders' deficit of $25.4 million.

         During fiscal 1997 and during the first quarter of fiscal 1998 the
Company extended payment terms with many suppliers in order to increase the
availability of on-hand cash. As a result the Company experienced difficulty in
procuring inventory and subcontract manufacturing services from some suppliers.
At the present time the Company is not in compliance with the agreed payment
terms with many of its suppliers and there can be no assurance that such
suppliers will continue to ship supplies to the Company if the Company does not
comply with such terms.

         During the first quarter of fiscal 1998, operating activities used
cash of $1.6 million, compared with using $12.1 million of cash in the first
quarter of fiscal 1997, due primarily to a net loss of $5.2 million in fiscal
1998 compared with net income of $4.0 million in the comparable period in
fiscal 1997. In the first quarter of fiscal 1997 the Company's inventories
increased $15.9 million, which was the primary cause of the use of cash during
that quarter.

         Cash generated by financing activities increased by $6.5 million in
the first quarter of fiscal 1998 due to borrowings under the New Credit
Facility from DKB.




                                     -13-
<PAGE>   14
         The Company's payment terms with Fujitsu for purchases of silicon
wafers and MDPs are longer than those generally available from other suppliers.
Although the Company believes that such payment terms will not change in the
near future, there can be no assurance that Fujitsu will continue to extend
such favorable payment terms to the Company. Shorter payment terms would
increase the Company's cash requirements.

         The Company intends to incur additional capital expenditures of
approximately $8 million during the next 12 months, principally for computer
hardware and software, lab equipment and general office equipment and
furnishings.

         Because the Company must order raw materials, silicon wafers and
components and build finished goods inventory substantially in advance of
product shipments, there is continued risk that the Company will forecast
quantity and product mix incorrectly and, therefore, produce excess or
insufficient inventories. Because the markets for the Company's microprocessor,
module and system products are subject to rapid technological and price
changes, inventory may be subject to rapid obsolescence. The inventory risk is
heightened because the Company's customers usually place orders with short lead
times. If the Company forecasts incorrectly and produces insufficient inventory
of particular products, the Company may face order cancellations from or loss
of customers, who may seek to satisfy their needs from other suppliers. In
general, the Company's customers may change delivery schedules or cancel orders
without penalty. To the extent that the Company produces excess or insufficient
inventories of particular products, or inventory becomes obsolete, the
Company's results of operations and financial condition could be materially and
adversely affected.

         Based on the commitment from Fujitsu and the Company's current
operating plan, the Company believes that its cash requirements will be met
through April 1, 1998. Beyond that time, the Company may require additional
equity or debt financing. There can be no assurance that additional capital,
including capital from bank borrowings, will be available on terms favorable to
the Company, if at all. To the extent that additional capital is raised through
the sale of additional equity or convertible debt securities, the issuance of
such securities would likely result in additional substantial dilution to the
Company's stockholders. Moreover, the Company's cash requirements may vary
materially from those now planned because of changes in the Company's business
or capital expenditure plans, product plans or technology roadmap, changes in
the Company's level of product and manufacturing integration, results of
research and development, relationships with suppliers and customers, changes
in the focus and direction of the Company's research and development programs,
competitive and technological advances, the level of working capital required
to sustain planned growth, operating results (including the extent and duration
of operating losses), facilities, employment matters, and other factors.




                                     -14-
<PAGE>   15

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         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

         On July 14, 1997, the Company received notification from the Nasdaq
         Stock Market, Inc. ("Nasdaq") that the Company does not comply with
         the net tangible asset requirement for continued listing on the Nasdaq
         National Market. Nasdaq has requested that the Company provide it with
         plans for complying with the net tangible asset requirement ($4
         million in the Company's case). In the event the Company cannot meet
         the net tangible asset requirement, the Company's stock will likely be
         delisted from the Nasdaq National Market. The Company is pursuing
         alternatives to comply with the requirement, however, there can be no
         assurance that it can achieve compliance or that the Company's common
         stock will not be delisted from the Nasdaq National Market.




                                     -15-
<PAGE>   16

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits

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

                  3.2      -                Restated Bylaws of Company

                  27       -                Financial Data Schedule

    (b)  Reports on Form 8-K

    None



                                     -16-
<PAGE>   17
                                   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:  August 8, 1997        /s/ JACK W. SIMPSON, SR.
                             --------------------------------------------------
                             JACK W. SIMPSON, SR.
                             President and Chief Executive Officer


                             /s/ F. S. (KIT) WEBSTER III
                             --------------------------------------------------
                             F. S. (KIT) WEBSTER III
                             Chief Financial Officer

                             /s/ CARTER L. GODWIN
                             --------------------------------------------------
                             CARTER L. GODWIN
                             Chief Accounting Officer and Corporate Controller





                                     -17-
<PAGE>   18
                              INDEX TO EXHIBITS



<TABLE>
<CAPTION>
EXHIBIT
NUMBER                   DESCRIPTION
-------                  -----------
<S>           <C>
   3.2        -  Restated Bylaws of the Company

  27          -  Financial Data Schedule

</TABLE>