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


                                    FORM 10-Q

(Mark One)

[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the Quarterly Period Ended March 31, 1999
                                       or
[ ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the Transition Period From _______________ to
      ________________.

                         Commission file number 0-27074

                          SECURE COMPUTING CORPORATION
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)


                 Delaware                               52-1637226
   -----------------------------------              -------------------
     (State or other jurisdiction of                 (I.R.S. employer
      incorporation or organization)                identification no.)


      One Almaden Blvd., Suite 400
               San Jose, CA                                95113
   -----------------------------------              -------------------
(Address of principal executive offices)                (Zip code)


                                 (408) 918-6100
              ----------------------------------------------------
               Registrant's telephone number, including area code


                                 Not Applicable
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. 
      Yes [X]     No [ ]

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date: Common Stock, $.01 par value -
17,435,571 issued and outstanding as of May 6, 1999, which number includes
743,636 Exchangeable Shares that have the same voting and other rights as Common
Stock and are immediately exercisable for shares of Common Stock.


                                       1
<PAGE>


                          SECURE COMPUTING CORPORATION

                                      INDEX
<TABLE>
<S>                                                                                     <C>
PART I   FINANCIAL INFORMATION                                                          PAGE NO.
                                                                                        --------
Item 1.  Condensed Consolidated Financial Statements:

         Condensed Consolidated Balance Sheets as of March 31, 1999 (Unaudited) and
            December 31, 1998...........................................................      3

         Condensed Consolidated Statements of Operations (Unaudited) for the three
            months ended March 31, 1999 and 1998........................................      4

         Condensed Consolidated Statements of Cash Flows (Unaudited) for the three
            months ended March 31, 1999 and 1998........................................      5

         Notes to the Condensed Consolidated Financial Statements (Unaudited)...........      6

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
            Operations.................................................................. 7 - 10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.....................     10



PART II  OTHER INFORMATION

Item 1.  Legal Proceedings..............................................................     11

Item 2.  Changes in Securities..........................................................     11

Item 3.  Defaults upon Senior Securities................................................     11

Item 4.  Submission of Matters to a Vote of Security Holders............................     11

Item 5.  Other Information..............................................................     12

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

         Signatures.....................................................................     13
</TABLE>


                                       2
<PAGE>


                          PART 1. Financial Information

                          SECURE COMPUTING CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      March 31, 1999 and December 31, 1998

                       (In thousands except share amounts)
<TABLE>
<CAPTION>
                                                                 March 31,    December 31,
                                                                   1999           1998
                                                                 --------       --------
                                                               (Unaudited)
<S>                                                              <C>            <C>     
ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                     $  8,596       $  9,992
   Investments                                                      8,894         10,886
   Accounts receivable, net                                        16,867         19,712
   Inventories                                                      3,521          2,361
   Other current assets                                             2,376          2,361
                                                                 --------       --------
      Total current assets                                         40,254         45,312

PROPERTY AND EQUIPMENT, NET                                         3,793          3,794

OTHER ASSETS                                                        5,483          5,242
                                                                 --------       --------
                                                                 $ 49,531       $ 54,348
                                                                 ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable and other accrued liabilities                $  6,144       $  8,742
   Deferred revenue                                                 2,399          2,553
                                                                 --------       --------
      Total current liabilities                                     8,543         11,295

STOCKHOLDERS' EQUITY
   Preferred stock, par value $.01; 2,000,000 shares
      authorized, none issued and outstanding                          --             --

   Common Stock, par value $.01; 25,000,000 shares
      authorized; issued and outstanding - March 31, 1999--
      16,975,353 and December 31, 1998--16,545,987                    170            165
   Additional paid-in capital                                      97,362         89,730
   Accumulated deficit                                            (56,374)       (46,640)
   Foreign currency translation                                      (170)          (202)
                                                                 --------       --------
      Total stockholders' equity                                   40,988         43,053
                                                                 --------       --------
                                                                 $ 49,531       $ 54,348
                                                                 ========       ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>


                          SECURE COMPUTING CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997

               (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


                                              Three months ended March 31,
                                                 1999              1998
                                               --------------------------
Revenue:
   Products and Services                       $  6,567          $ 10,265
   Advanced Technology contracts                  1,663             2,510
                                               --------          --------

                                                  8,230            12,775
Cost of revenue                                   4,656             4,251
                                               --------          --------
Gross profit                                      3,574             8,524

Operating expenses:
   Selling and marketing                          5,360             5,811
   Research and development                       2,219             1,902
   General and administrative                     1,162               775
   Restructure costs                                 --             7,800
   Stock option expense                           4,740                --
                                               --------          --------
                                                 13,481            16,288
                                               --------          --------
Operating loss                                   (9,734)           (7,764)

Net interest income                                 173                42
                                               --------          --------
Loss before income taxes                         (9,734)           (7,722)

Income tax benefit                                   --               357
                                               --------          --------
Net loss                                       $ (9,734)         $ (7,365)
                                               ========          ========

Net loss per share - basic and diluted         $   (.58)         $   (.46)
                                               ========          ========

Weighted average shares outstanding              16,680            15,883
                                               ========          ========


     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>


                          SECURE COMPUTING CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998

                            (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                 Three months ended March 31,
                                                                    1999             1998
                                                                  -------------------------
<S>                                                               <C>              <C>     
NET CASH USED IN OPERATING ACTIVITIES                             $(5,572)         $(1,368)

INVESTING ACTIVITIES
   Proceeds from sales of investments                               1,992               --
   Purchase of property and equipment                                (365)            (575)
   Increase in intangibles and other assets                          (380)            (472)
                                                                  -------          -------
      Net cash provided by (used in) investing activities           1,247           (1,047)

FINANCING ACTIVITIES
   Proceeds from sales lease back transaction                          --              730
   Proceeds from issuance of Common Stock                           2,897              889
                                                                  -------          -------
      Net cash provided by financing activities                     2,897            1,619

EFFECT OF  FOREIGN CURRENCY TRANSLATION                                32               97
                                                                  -------          -------
   Decrease in cash and cash equivalents                           (1,396)            (699)
   Cash and cash equivalents beginning of period                    9,992            4,880
                                                                  -------          -------
   Cash and cash equivalents at end of period                     $ 8,596          $ 4,181
                                                                  =======          =======
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>


                          SECURE COMPUTING CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

1. ORGANIZATION

            Secure Computing Corporation ("Secure Computing" or the "Company")
designs, develops, markets and sells a comprehensive offering of interoperable,
standards-based products for end-to-end network solutions, including firewalls,
Web filters, authentication, extranet access control and security related
professional services. Today, the Company enables business security solutions
through its advanced technologies, professional services and partner programs.
The Company's goal is to provide a complete portfolio of integrated enterprise
security solutions for corporate networks. The Company's principal markets are
the United States government and commercial companies for its network security
products and the United States government under development contracts.

2. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

            The accompanying condensed consolidated financial statements have
been prepared by Secure Computing without audit and reflect all adjustments
(consisting only of normal and recurring adjustments and accruals) which are, in
the opinion of management, necessary to present a fair statement of the results
for the interim periods presented. The consolidated financial statements include
the accounts of the Company and its subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation. The statements have been
prepared in accordance with the regulations of the Securities and Exchange
Commission, but omit certain information and footnote disclosures necessary to
present the statements in accordance with generally accepted accounting
principles. The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full fiscal year.
These condensed financial statements should be read in conjunction with the
Consolidated Financial Statements and footnotes thereto included in the
Company's Annual 10-K Report for the year ended December 31, 1998, as filed with
the Securities and Exchange Commission.

3. SIGNIFICANT ACCOUNTING POLICIES

            As of January 1, 1998, the Company adopted Financial Accounting
Standards No. 130 ("Statement 130"), "Reporting Comprehensive Income". Statement
130 establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement had no impact on the
Company's net income or shareholders equity. Statement 130 requires foreign
currency translation adjustments, which prior to adoption were reported
separately in shareholders' equity, to be included in other comprehensive
income. Prior year financial statements have been reclassified to conform to the
requirements of Statement 130. During the first quarter of 1999 and 1998, total
comprehensive income amounted to ($9,702) and ($7,268) respectively.

4. STOCK OPTION EXPENSE

            The Company has an Executive Stock Option program under which
1,110,000 options are subject to accelerated vesting based on the performance of
the Company's stock price over a period ranging from one to three years. As of
March 31, 1999, the number of options exercisable under this program was 860,000
of which 380,000 have an exercise price of $6.125 and 480,000 have an exercise
price of $10.25. For the quarter ended March 31, 1999 the Company recognized
$4,740 of compensation expense related to the accelerated vesting of options
under this program.


                                       6
<PAGE>


                          SECURE COMPUTING CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

            The following Management's Discussion and Analysis of Financial
Condition and Results of Operations contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future.
Forward-looking statements include, without limitation, statements regarding the
extend and timing of future revenues and expenses and customer demand.

            All forward-looking statements included in this document are based
on information available to the Company as of the date hereof, and the Company
assumes no obligation to update any such forward-looking statements. Actual
results could differ materially from those projected in the forward-looking
statements as a result of a number of factors, including the risk factors
detailed in the Company's Annual Report on Form 10-K for the year ended December
31, 1998 filed with the Securities and Exchange Commission, as well as the
factors identified in Forward Looking Statements below.


RESULTS OF OPERATIONS

            REVENUE. The Company's revenue decreased 35.6 percent to $8,230,000
for the first quarter of 1999 down from $12,775,000 in the same period of 1998.
Products and services revenue was $6,567,000 for the quarter, a decrease of 36.0
percent over 1998, and reflects the slippage in timing of several large
transactions. The Company expects quarterly revenue from products and services
for the remainder of 1999 to increase from the first quarter of 1999. Advanced
Technology contract revenue was $1,663,000 for the quarter, a decrease of 33.7
percent from 1998, which reflects a reduced focus on government contract
business that does not complement the Company's products and services offerings.
The Company expects quarterly revenue from government contracts for the
remainder of 1999 to increase slightly from the first quarter of 1999. This
increase is primarily the result of expected contract awards.

            GROSS PROFIT. Gross profit as a percentage of revenue decreased from
66.7 percent in the first quarter of 1998 to 43.4 percent in 1999. The decrease
resulted mainly from reduced volumes and relatively fixed manufacturing and
amortization costs. The Company believes that gross profit will trend higher for
the remainder of the year as revenues increase.

            SELLING AND MARKETING. Selling and marketing expense decreased 7.8
percent to $5,360,000 in the first quarter of 1999, a decrease from $5,811,000
in the same period of 1998. As a percentage of revenue, selling and marketing
expense was 65.1 percent for the quarter compared to 45.5 percent in the same
period of 1998. The decreased spending levels resulted primarily from reduced
commissions from reduced sales. The Company expects selling and marketing
expense levels to increase in proportion to the increase in revenues for the
rest of 1999.

            RESEARCH AND DEVELOPMENT. Research and development expense increased
by 16.7 percent to $2,219,000 in the first quarter of 1999 from $1,902,000 in
the same period of 1998. As a percentage of revenue, research and development
expense was 27.0 percent for the quarter compared to 14.9 percent in 1998. The
increase resulted primarily from increased investment in quality assurance
activities. The Company expects that research and development expenses for the
rest of 1999 will remain at levels comparable to those of the first quarter of
1999.

            GENERAL AND ADMINISTRATIVE. General and administrative expense
increased 49.9 percent to $1,162,000 in the first quarter of 1999, from $775,000
in the same period of 1998. As a percentage of revenue, general and
administrative expenses were 14.1 percent for the first quarter of 1999 compared
to 6.1 percent for the first quarter of 1998. The Company expects the quarterly
general and administrative expenses for the rest of 1999 to remain at levels
comparable to those of the first quarter of 1999.


                                       7
<PAGE>


            RESTRUCTURE COSTS. In the first quarter of 1998, the Company
recorded a pre-tax expense of $7.8 million to account for restructuring
activities which included streamlining its product offerings and reducing the
unit's cost structure and the closing of certain facilities. The Company
completed these efforts in early 1999.

            NET INTEREST INCOME. Net interest income was $173,000 in the first
quarter of 1999, an increase from $42,000 in the same period of 1998. The
increase reflects higher cash and investment balances in 1999 as compared to
1998.

            INCOME TAXES. The Company did not recognize an income tax benefit in
the first quarter of 1999 compared to an income tax benefit of $357,000 in 1998.
Management believes it is more likely than not that deferred tax assets, which
total $3,600,000 at March 31, 1999, will be realized. The computation of the
Company's deferred tax assets and valuation allowance are based in part on
taxable income expected to be earned on government contracts and projected
interest income. The amount of the deferred tax assets considered realizable
could be reduced in the near term if estimates of future taxable income are
reduced.


LIQUIDITY AND CAPITAL RESOURCES

            The Company's cash, cash equivalents and short term investments
decreased by $3,388,000 from December 31, 1998 to March 31, 1999. The decrease
resulted primarily from the use of cash to fund operations and purchase capital
equipment, which was partially offset by proceeds from stock option exercises.
As of March 31, 1999, the Company had working capital of $31.7 million as well
as an unused $5 million line of credit. The Company anticipates using available
cash to fund growth in operations, invest in capital equipment, acquire
businesses or license technology or products related to the Company's line of
business, and provide for restructuring activities.

            Capital additions in the first three months of 1999 were $365,000
and were primarily made up of computer equipment, office furniture and leasehold
improvements. The Company expects to invest another $1,200,000 throughout the
remainder of 1999 mainly for computer equipment and facilities upgrades.

            At its current level of operations, the Company believes that its
existing cash and cash equivalents are sufficient to meet the Company's current
working capital and capital expenditure requirements through at least the next
12 months.


YEAR 2000 COMPLIANCE

            The Company has completed testing of its products and systems and
believes that its products and systems sold after December 31, 1998 are and will
be Year 2000 compliant. For non-compliant products introduced prior to this
date, we have provided customers with a migration path in the form of an
update/upgrade option. The Company has also verified compliance of third party
computer software and hardware utilized by the Company. The Company has not
verified Year 2000 compliance of certain semiconductors embedded in other
third-party equipment used by the Company, nor has the Company established the
costs and risks associated with such third party equipment.

            Since the Company's Year 2000 compliance verification efforts are
virtually complete, the estimated future expenditures for compliance activities
are insignificant. The Company does not have any contingency plans nor does it
plan on developing one at this time.


FORWARD LOOKING STATEMENTS

            Certain statements made above, which are summarized below, are
forward-looking statements that involve risks and uncertainties, and actual
results may be materially different. Factors that could cause actual results to
differ include those identified below:


                                       8
<PAGE>


o     THE COMPANY EXPECTS QUARTERLY REVENUE FROM PRODUCTS AND SERVICES FOR THE
      REMAINDER OF 1999 TO INCREASE FROM THE FIRST QUARTER OF 1999. Meeting this
      expectation depends upon the Company's ability to achieve a higher level
      of products and services revenue, which may not occur for a variety of
      reasons, including general market conditions for the Company's products
      and services, delays or difficulties in the development and inability to
      obtain market acceptance of new products offered by the Company, and
      introduction of products by competitors.

o     THE COMPANY EXPECTS QUARTERLY REVENUE FROM GOVERNMENT CONTRACTS FOR THE
      REMAINDER OF 1999 TO INCREASE SLIGHTLY FROM THE FIRST QUARTER OF 1999.
      THIS INCREASE IS PRIMARILY THE RESULT OF EXPECTED CONTRACT AWARDS. Meeting
      this expectation depends upon the Company's ability to achieve a higher
      level of government contract revenue, which may not occur for a variety of
      reasons, including an inability to staff engineers to its current contract
      requirements or customer delays or cancellations of contract awards.

o     THE COMPANY BELIEVES THAT GROSS PROFIT WILL TREND HIGHER FOR THE REMAINDER
      OF THE YEAR AS REVENUES INCREASE. Meeting this expectation depends upon
      the Company's ability to achieve a higher level of products and services
      revenue, which may not occur for a variety of reasons, including general
      market conditions for the Company's products and services, delays or
      difficulties in the development and inability to obtain market acceptance
      of new products offered by the Company, and introduction of products by
      competitors.

o     THE COMPANY EXPECTS SELLING AND MARKETING EXPENSE LEVELS TO INCREASE IN
      PROPORTION TO THE INCREASE IN REVENUES FOR THE REST OF 1999. This
      expectation depends on the Company maintaining the current anticipated
      level of selling and marketing expenses, which may not occur due to
      unexpected increases in such costs or because of a need to accelerate a
      full scale product marketing and branding campaign, or decreased products
      and services revenue resulting in lower selling expense. Fluctuations in
      revenue from quarter to quarter will likely have an increasingly
      significant impact on the Company's results of operations. Additionally,
      meeting this expectation depends upon the Company's ability to control
      costs and achieve a higher level of revenue, which may not occur for a
      variety of reasons, including general market conditions for the Company's
      products and services, development and acceptance of new products offered
      by the Company, and introduction of products by competitors.

o     THE COMPANY EXPECTS THAT RESEARCH AND DEVELOPMENT EXPENSES FOR THE REST OF
      1999 WILL REMAIN AT LEVELS COMPARABLE TO THOSE OF THE FIRST QUARTER OF
      1999. This expectation depends on the Company maintaining the current
      anticipated level of product development, which may not occur due to
      unexpected increases in such costs or because of a need to accelerate or
      begin new product development and also may be affected by current plans
      for a full scale product marketing and branding campaign being curtailed
      or delayed or decreased products and services revenue resulting in lower
      selling expense. Fluctuations in revenue from quarter to quarter will
      likely have an increasingly significant impact on the Company's results of
      operations. Additionally, meeting this expectation depends upon the
      Company's ability to control costs and achieve a higher level of revenue,
      which may not occur for a variety of reasons, including general market
      conditions for the company's products and services, development and
      acceptance of new products offered by the Company, and introduction of
      products by competitors.

o     THE COMPANY EXPECTS THE QUARTERLY GENERAL AND ADMINISTRATIVE EXPENSES FOR
      THE REST OF 1999 TO REMAIN AT LEVELS COMPARABLE TO THOSE OF THE FIRST
      QUARTER OF 1999. This expectation depends on the Company maintaining the
      current anticipated level of spending which may not occur due to
      unexpected increases in such costs.

o     MANAGEMENT BELIEVES IT IS MORE LIKELY THAN NOT THAT DEFERRED TAX ASSETS,
      WHICH TOTAL $3,600,000 AT MARCH 31, 1999, WILL BE REALIZED. This
      expectation depends primarily on the Company maintaining, at current
      levels, its existing government contract business. If these contracts are
      lost or adjusted downward, deferred tax assets would be expected to be
      written down with a corresponding charge to income tax expense recorded.


                                       9
<PAGE>


o     AT ITS CURRENT LEVEL OF OPERATIONS, THE COMPANY BELIEVES THAT ITS EXISTING
      CASH AND CASH EQUIVALENTS ARE SUFFICIENT TO MEET THE COMPANY'S CURRENT
      WORKING CAPITAL AND CAPITAL EXPENDITURE REQUIREMENTS THROUGH AT LEAST THE
      NEXT 12 MONTHS. The Company's ability to generate revenue as currently
      expected, unexpected expenses and the need for additional funds to react
      to changes in the marketplace, including unexpected increases in personnel
      costs and selling and marketing expenses or currently unplanned
      acquisitions may impact whether the Company has sufficient cash resources
      to fund its product development and marketing and sales plans for the
      remainder of 1999.

o     SINCE THE COMPANY'S YEAR 2000 COMPLIANCE VERIFICATION EFFORTS ARE
      VIRTUALLY COMPLETE, THE ESTIMATED FUTURE EXPENDITURES FOR COMPLIANCE
      ACTIVITIES ARE INSIGNIFICANT. Failure of third-party equipment to operate
      properly in the Year 2000 and thereafter could require the Company to
      incur unanticipated expenses to remedy any problems, which could have a
      material adverse effect on the Company's business, operating results and
      financial condition. The company has verified Year 2000 compliance with
      third party suppliers of the components used in its products, however, the
      company has limited or no control over the actions of these third-party
      suppliers. The failure of these suppliers to properly address their
      internal systems and components could cause a material disruption to the
      Company's business.

      The business, operating results and financial condition of the Company's
      customers could be adversely affected to the extent they utilize
      third-party software and other products that are not Year 2000 compliant.
      The Company does not have nor is it possible to obtain any insurance
      policy providing material coverage for potential injuries or damages
      related to or caused by the Year 2000 issue.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            The Company does not have material exposure to quantitative and
qualitative market risks because it does not own any risk sensitive financial
instruments.


                                       10
<PAGE>


                          SECURE COMPUTING CORPORATION
                                     PART II
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

            On April 2, 9, 12, 14 and 20, 1999, purported class action
complaints were filed in the United States District Court for the Northern
District of California by Myron Goldstein, Herbert Silverberg, William Preiner,
Charles McInnis, and George H. Rosenquist and Melvin Freedenberg, respectively,
against the Company, and certain of its officers and directors. Each complaint
alleges that defendants made false and misleading statements about the Company's
business condition and prospects during a purported class period of November 10,
1998 - March 31, 1999, and asserts claims for violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. Each complaint
seeks damages of an unspecified amount.

            There has been no discovery to date and no trial is scheduled in any
of these actions. The Company believes that it has meritorious defenses to these
actions and intends to defend them vigorously. Failure by the Company to obtain
a favorable resolution of the claims set forth in the actions could have a
material adverse effect on the Company's business, results of operations and
financial condition. Currently, the amount of such material adverse effect
cannot be reasonably estimated.

            There has been no discovery to date and no trial is scheduled in any
of these actions. The Company believes that it has meritorious defenses to these
actions and intends to defend them vigorously. Failure by the Company to obtain
a favorable resolution of the claims set forth in the actions could have a
material adverse effect on the Company's business, results of operations and
financial condition. Currently, the amount of such material adverse effect
cannot be reasonably estimated.

            On August 26, 1998, a purported class action complaint was filed in
the Delaware Chancery Court in and for New Castle County by Rosalyn Golaine
against the Company, certain of its present officers, present directors, and
former directors (the "Golaine Action"), alleging that the provisions of the
July 24, 1997 shareholder rights plan (the "Plan") permitting only those
directors who voted for the Plan (or their designated successors) to redeem the
Rights granted therein, violated Delaware law. The complaint in the Golaine
Action seeks injunctive relief and damages of an unspecified amount.

            The Company has amended the Plan which will render moot the
injunctive relief requested. In November, 1998, the defendants moved to dismiss
the Golaine Action. On March 22, 1999, the parties submitted a proposed
settlement of the Golaine Action for court approval. The proposed settlement
would require the Company to pay up to $100,000 in attorney fees and the costs
of notifying the class of the proposed settlement. A hearing on the proposed
settlement has been scheduled for June 8, 1999.

ITEM 2.  CHANGES IN SECURITIES

            None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

            Not applicable

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

            See proxy statement of the Company dated April 14, 1999, as filed
with the Commission on April 15, 1999.


                                       11
<PAGE>


ITEM 5.  OTHER INFORMATION

     On May 3, 1999, the Company announced that John McNulty has joined the
company as President and Chief Operating Officer and has been appointed to serve
on the Board of Directors. Mr. McNulty, 52, has over thirty years experience in
the hi-tech industry, most recently serving as Senior Vice President Sales,
Services, and Business Development at Genesys Telecommunications Labs, a leading
independent software company in the computer telephony integration environment.
Previously, Mr. McNulty was with Intel Corporation, where in his latest position
he was Director of Marketing and Business Development for the Enterprise Server
Group, which he launched. He also served as General Manager of Intel's
Commercial Memory and Micro Systems division. Mr. McNulty has also been
President and CEO of Integrated Solutions, Inc. and Rose Communications.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)         EXHIBITS

            The following exhibits are filed as part of this Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1999:
            10.1        Employment Agreement between Secure Computing
                        Corporation and John E. McNulty dated May 3, 1999.
            27          Financial Data Schedule

            Copies of Exhibits will be furnished upon request and payment of the
Company's reasonable expenses in furnishing the Exhibits.

(b)         REPORTS ON FORM 8-K

            None


                                       12
<PAGE>


                          SECURE COMPUTING CORPORATION

                                   SIGNATURES

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



                                     SECURE COMPUTING CORPORATION


DATE: May 12, 1999                   By: /s/ Timothy P. McGurran
                                         --------------------------------------
                                         Timothy P. McGurran,
                                            Senior Vice President of Operations
                                               and Chief Financial Officer
                                            (Duly authorized officer and
                                            Principal Financial Officer)


                                       13
<PAGE>


                                INDEX TO EXHIBITS


EXHIBIT                    DESCRIPTION                             PAGE
-------                    -----------                             ----

 10.1     Employment Agreement between Secure Computing
          Corporation and John E. McNulty dated
          May 3, 1999.                                      FILED ELECTRONICALLY

 27       Financial Data Schedule                           FILED ELECTRONICALLY